Contemporary Demands on Business and IT Alignment: How Can Enterprise Modeling Help?

1. Introduction

Today’s dynamic business environment – entwined as it is with rapidly advancing IT capability through digital innovation, internet of things (IoT), cyber physical systems (CPS) etc. – presents enterprises that wish to stay competitive with a great challenge. This is further complicated by the special role that IT now plays in most enterprises, i.e. as a communication backbone for realizing visions, goals, and business models. Indeed, IT can be used to change the way enterprises organize their business processes, how they communicate with their customers and the means by which they deliver their services (Silvius, 2009). However while it is undeniable that suitable IT solutions are required in order to achieve organizational goals, the effective support of business operations with appropriate IT is complicated due to the dynamic nature of business and IT (Luftman, 2003). In early studies Business and IT Alignment (BITA) implied linking the business plan and the IT plan, or alternatively the business strategy and the IT strategy. Later, considerations of BITA started to require consideration of the fit between business needs and information system priorities. These expanded over time and current research recognizes many dimensions of alignment between business and IT (Schlosser, Wagner, & Coltman, 2012). This has also been manifested in other contexts through development of concepts like European Interoperability Framework (European Commission, 2010) and the socio-technical Systems Stack (STS) (Baxter & Sommerville, 2011).

In general, it is possible to differentiate between the strategic, structural, social and cultural dimensions of BITA (Chan & Reich, 2007a). The strategic dimension refers to the degree to which the business strategy and plans, and the IT strategy and plans, complement each other. The structural dimension refers to the degree of structural fit between IT and the business that is influenced by the location of IT decision-making rights, reporting relationships, decentralization of IT, and the deployment of IT personnel. The social dimension refers to how much business and IT executives within an organizational unit understand and are committed to the business and IT mission, objectives, and plans. The cultural dimension refers to the need of IT planning to be aligned with cultural elements such as the business planning style and the top management communication style. Of these, the strategic dimension currently receives significantly more attention (ibid). However, both strategic alignment and structural alignment influence organization performance. In addition, BITA is closely linked to many of the social and cultural aspects of an organization. Improving alignment within these four dimensions permits the increase of IS effectiveness and efficiency, the enhancement of business and IT flexibility, the improvement of business performance and other positive effects (Vargas, 2011; Schlosser et al., 2012). Given that these significant benefits are matched by a number of unresolved issues, it is no surprise that attention to BITA continues to grow (Silvius, 2009).

BITA is often tightly linked to enterprise transformation, i.e. the action of taking an enterprise from one state to an improved state (Seigerroth, 2011). Some enterprises need to deal with transformation reactively while others have the possibility to be more proactive in the planning, design and implementation of changes. Regardless of type of change (reactive or proactive) there appears to be a need to agree on future vision and strategy among the stakeholders and to have a common understanding about the current praxis in the enterprise (Seigerroth, 2015). Therefore, if BITA is to be achieved, there needs to be a clear and up-to-date representation of the enterprise AS-IS and TO-BE states that accurately reflects – for the different stakeholders within the enterprise – the various aspects that these states imply.