Aligning Business and It: The Process-Driven Architecture Model

Abstract

Due to the fact that the corporate IT function is tightly coupled to enterprise processes and the organization's information needs, today's IT investments and processes are driven by the same dynamics as the enterprise itself. This article describes a model of a four-layer process-driven architecture (PDA) that can be used as a framework for addressing the alignment of business and IT.     

Alignment within the corporate IT unit: an analysis of software testing and development

Strategic alignment between an organization's business strategy/capabilities and those of its information technology (IT) unit is an extensively researched subject that addresses the issue of fit between business and technology strategies. A key gap in the literature is lack of recognition that underlying this macro level of alignment are other, more granular levels of alignment involving the interdependent subunits within the corporate IT unit. Given the critical interdependencies between development and testing subunits in software engineering, this paper focuses on an alignment model for ensuring that these two functions work together effectively. A development-testing alignment (DTA) model is described, and a case study investigating its value and application is presented. This DTA is decomposed into distinct components for the purposes of theoretical clarity and pragmatic application. The case study analysis uses the model to understand and interpret development-testing alignment in a Fortune 500 company. We found that the development and testing functions were significantly misaligned, and our model identified close to twenty specific aspects that needed to be considered to enhance alignment. These included changes in specificity of scope, governance, resource availability, competencies, and processes. Our analysis shows that the DTA model can be usefully applied for the purpose of understanding tactical alignment between subunits within a corporate IT unit. It also demonstrates that there is value in considering alignment as a dynamic, context-driven, social phenomenon as well as a useful interpretative lens for exploring organizational interactions and interdependencies.     

CEO/CIO mutual understanding,strategic alignment,and the contribution of IS to the organization

Mutual understanding between the CEO and CIO is thought to facilitate the alignment of an organization's IS with its business strategy, and thereby enhance the contribution of the IS to business performance. A survey of 202 pairs of CEOs and CIOs was taken to investigate the relationships between them. Mutual understanding was measured as the role of IS in the organization, using the perspectives of both executives. Strategic alignment was measured as the fit between the CEO's assessment of eight STROBE dimensions and the CIO's assessment of the analogous STROEPIS dimensions; both the CEO and CIO evaluated IS contribution. Mutual understanding of the role of IT led to seven alignment dimensions whereas six alignment dimensions led to IS contributions. Our study extended the theory of IT strategic alignment and provided direction for CEOs and CIOs interested in improving the IS contribution of their organization.     

A methodology of constructing a decision path for IT investment

Information Technology (IT) may be used for organizational efficiency, but should also be flexible to adapt to the rapidly changing competitive business environment. In competitive business circumstances, management continually asks: (1) How flexible must the firm be in investing in IT in order to meet unknown business needs in the future? At the same time, how efficient must the firm be in order to meet current business needs?; (2) How well must the firm align its business strategy with IT investment in order for it to support its strategic goals?; (3) how to construct a decision path for IT investments with respect to flexibility, efficiency and alignment between business strategy and IT investments?Although many researchers have struggled to answer these questions, they generally provide no means for incorporating these factors into the IT investment decision process.This paper suggests a method that identifies the degree of flexibility required (α-value), and accounts for and incorporates the α-value in making IT investments. The proposed method is based on a product development method called Quality Function Deployment (QFD). It will be applied to a real case of the “H-company” in Korea to validate and evaluate the proposed methodology.     

A Simple Instrument to Measure IT-Business Alignment Maturity

Abstract

The challenge of aligning Information Technology (IT) to business has often been cited as a key issue by IT executives. This paper presents a simple, flexible, and easy-to-use instrument that measures the alignment maturity between business and IT and identifies major gaps. The proposed instrument is based on Luftman's “Strategy Alignment Maturity Model” (SAMM); it directly encodes all attributes of SAMM alignment areas using a unidimensional framework. The instrument supports multiple levels of analysis with minimum assumptions about data using non-parametric statistical tools. In addition, the instrument provides an aggregation procedure to summarize the alignment maturity level for high-level executives. The instrument can also be customized to incorporate the contextual parameters of a company. In addition to the development of the instrument, this paper also shows how this instrument was applied to assess the alignment maturity level between IT and business in a rapidly growing company that had recently been publicly listed. The instrument was successful in identifying six major gaps for the company across the various alignment areas. These gaps were benchmarking, business metrics, strategic business planning, inter / intra organizational learning, architectural integration, and the impact of IT on business processes.     

Integrating B-SCP and MAP to manage the evolution of strategic IT requirements

This paper presents the first steps in a research project that integrates two requirements engineering methodologies, B-SCP and MAP, in order to manage the evolution of strategic IT. Our integration approach presents a mechanism to validate and verify MAP requirements against B-SCP requirements and vice versa. MAP has an inbuilt Gap Analysis process which saves the overhead of inventing a new approach to deal with requirements evolution. In addition, MAP extends B-SCP’s capability by the addition of non-deterministic process modelling. Our solution is evaluated on an exemplar case study which looks at a system built for Seven Eleven Japan.     

Investigating business-IT alignment through multi-disciplinary goal concepts

The alignment of information technology (IT) with business strategies is optimal when harmony exists between organizational and system goals. Empirical evidence reveals that effective strategic alignment leads to superior financial performance for organizations. This observation has spurred extensive research into business-IT alignment. Yet, the issue of alignment remains a top concern for CIOs. We argue that the parochial view undertaken by past research into business-IT alignment is a probable cause for continuing system failures. Furthermore, strategic alignment research is limited and devoid within the requirements engineering discipline. In this paper, we highlight existing shortfalls of research in business-IT alignment, and bring to light insights that may be offered by other disciplines to augment this field. Subscribing to a multi-disciplinary perspective, we develop a goal-based framework that incorporates goals from various literatures in investigating business-IT alignment. One of the novelties of our proposed framework lies in its delineation between goals that have been originally assigned to stakeholders versus those interpreted by stakeholders. Additionally, the framework includes constructs at the strategic level for supporting the rationale of strategic level goals. We tested the usefulness and usability of this methodology in an organization with a newly developed information system founded on strategic business goals and reported lessons learnt from both researchers’ and practitioners’ perspectives.     

Rapid business and IT change: drivers for strategic information systems planning?

Today's organizations increasingly plan new information systems (IS) to better compete. Through such planning, they attempt to align their IS strategy and their business strategy. This study tested the impact of business and information technology (IT) change on strategic information systems planning (SISP) horizon, of horizon on the planning itself, and of the planning on the alignment of IS strategy and business strategy. A questionnaire defined business change, IT change, and alignment as multi-item scaled questions, and planning horizon as a single, nonscaled one. It defined a multi-item scaled SISP measure as both a second-order construct and as single-order constructs for its individual phases. A postal survey collected data from 161 IS executives. Constructs were extensively validated. The analysis used structural equation modeling, and surprisingly found that business change predicted longer SISP horizons, but IT change predicted neither longer nor shorter ones. Planning horizon predicted SISP itself (as a second-order construct and as all of its phases), and such planning (as a second-order construct, and as strategic awareness and strategy conception phases) predicted alignment of IS strategy and business strategy. These findings suggest that practitioners more carefully assess their own degree of caution in setting planning horizons in response to business and IT change. In fact, the findings suggest it may not be necessary for practitioners to shorten planning horizons in a rapidly changing environment.     

Strategic IT alignment Projects. Towards Good Governance

The senior management of organisations frequently perceive IT Projects as merely technological in nature. They fail to realise that in reality, the mission of IT is to provide technology-based support to business processes that can be key to the organisation. This lack of understanding means that these IT projects are not aligned with the business objectives and that investments in resources and personnel are not adequately prioritised. This can lead to an opportunity loss: a mere computerising of the business is sought, and processes that could turn out to be transformative, generating added value, driving a true digital transformation of the business are overlooked. This article proposes a model for implementing and operating a portfolio of strategic IT projects. Based on Good Governance principles, these latter projects move strategic decision-making up to an organisation's senior management, succeeding in gradually implicating these managers into the IT strategy. But above all, the model succeeds in achieving the targeted strategic alignment of IT projects with the organisation's business objectives and interests. The model has already been implemented in fourteen medium and large size public universities. The follow-up through interviews of the nine longest-standing experiences—some are nearly a decade old—revealed that the portfolio implementation strategy had helped to markedly improve the following elements: the institutions’ state of maturity of Good Governance; senior management's involvement in IT projects; and the identification of the most interesting IT projects for the business. To conclude, based on our experience, we can affirm that the strategic IT alignment projects is an effective IT Governance tool and, by extension, an example of Good Governance practice.     

Effects of strategic alignment on IS success: the mediation role of IS investment in Korea

The purpose of this research is to develop a comprehensive information system (IS) evaluation model for IS success linked to organizational performance. The primary focus of this research is to investigate the role of IT investment in business values by means of a group survey of about 300 business executives in Korea. We used the contingency theory to discover the mediation effect of IS investment on strategic alignment and IS success. In contrast to previous research, this study expanded the test scope to IS architecture and organizational structure at the operational level. The results from 273 business executives in Korea indicated that strategy integration with IT is positively related to IT investment, and IT investment is a critical antecedent of IS success. Thus, the implications of the findings are that right-directional IT investment has played an important role in the success of IT companies in Korea.     

IT alignment in small firms

This study focused on the alignment of business strategy and IT strategy among 256 small UK manufacturing firms. An instrument was developed and used to measure IT alignment in small firms. Evidence was gained of high IT alignment in some firms. The study also indicated that IT alignment was related to the firm's level of IT maturity and the level of the CEO's software knowledge, but did not seem to be linked to the CEO's involvement or the firm's sources of external IT expertise.     

Technical Briefing: Business Continuity Management

Abstract

This article discusses business continuity management as a risk management activity that extends well beyond the realm of IT Disaster Recovery Planning. It describes a rational, iterative process for assessing the risks, selecting appropriate risk treatments, and implementing various mitigating controls including resilience, recovery and contingency measures. While the IT Department undoubtedly has an important part to play in business continuity management, the article emphasizes that the process should be driven by senior managers since they are ultimately accountable for the organization's health and survival. As such, they have an obvious interest in balancing business risks against business opportunities.     

Value-based requirements engineering: exploring innovative e-commerce ideas

Innovative e-commerce ideas are characterised by commercial products yet unknown to the market, enabled by information technology such as the Internet and technologies on top of it. How to develop such products is hardly known. We propose an interdisciplinary approach, e ³ -value, to explore an innovative e-commerce idea with the aim of understanding such an idea thoroughly and evaluating it for potential profitability. Our methodology exploits a requirements engineering way of working, but employs concepts and terminology from business science, marketing and axiology. It shows how to model business requirements and improve business–IT alignment, in sophisticated multi-actor value constellations that are common in electronic commerce. In addition to the e ³ -value approach methodology, we also present the action research-based development of our methodology, by using one of the longitudinal projects we carried out in the field of online news article provisioning.     

Innovative IT climates: CIO perspectives

In many organizations the CIO is a key driver of business innovation. This research investigates innovative CIOs in the context of their organizational climate theory. We explore the concept of innovative IT climates through qualitative analyses of interviews with 36 innovative CIO's. We identify and characterize four dimensions of innovative IT climates using a theoretical model based on the climate literature. Inductive grounded-theoretic methods are then utilized to develop two additional dimensions of innovative IT climates - reality-checking and promoting credibility. Findings expand our theoretical and empirical understanding of innovative IT climates and provide practitioners with specific examples of how CIO's are actively working to create innovative IT climates.     

The procurement alignment framework construction and application

Procurement has become increasingly important for organizations acting in dynamic supply chains and competitive markets. In practice however, companies struggle with adapting and improving their procurement business function. In line with the general trend in management and organization studies, both scholars and practitioners aim to define an integrated procurement policy that is truly aligned on all organizational and IT aspects. The central aim of this paper is to present a framework that supports the definition and application of such an integrative procurement approach. The framework is developed upon insights from IT business alignment (more specifically IT Procurement alignment), procurement maturity measurement and segmentation. It facilitates organizations in monitoring the maturity and alignment of their procurement on five different business/IT perspectives. In addition, the framework enables specific procurement improvements by taking the situational aspect of procurement segmentation into account. The framework was validated twice: through interview expert consulting and through a questionnaire using scale analysis. In a case study it was found suitable for assessing procurement maturity and identifying concrete procurement improvements.     

Die Bedeutung des Alignment von IT und Fachressourcen in Finanzprozessen Eine empirische Untersuchung

Importance of the Alignment of IT and Business Resources in Financial Processes — An Empirical Study How do firms realize business value from deploying IT in business processes? Based on the Resource-based View and insights from recent literature on IT/business alignment, we argue that actual usage and the alignment of IT and business units are important prerequisites for a superior performance of IT-intensive business processes. In this paper, a causal model on the joint impact of IT usage, IT/business alignment and business resources on business process performance is proposed and empirically validated using data from Germany’s 1.000 largest banks. It turns out that the perceived performance of the focal business process, as predicted in the theoretical model, strongly depends on IT/business alignment. The empirical analysis also shows that business resources have a large impact and that even a superior IT cannot compensate business resource deficiencies. The results thereby provide support for important propositions of the literature on alignment from a process perspective and contribute to common knowledge that the business value of IT should not be assessed without evaluating and controlling for business resources as a complementary factor.     

Knowledge management through multi-perspective modelling: representing and distributing organizational memory

Full and accurate representation of an organization's knowledge assets, which together constitute “organizational memory”, requires multi-perspective modelling at a number of levels of detail. We propose that the perspectives which need to be represented can be characterized as who, what, how, when, where and why knowledge; these perspectives, and necessary levels of abstraction, are captured by the Zachman framework for Information Systems Architecture. We suggest modelling techniques that might be appropriate for different perspectives and levels of abstraction, and illustrate using examples from a medical domain. We also describe how an individual perspective can become the user interface of a knowledge distribution system, and illustrate this by describing the protocol assistant, a Web-based knowledge-based system capable of representing and reasoning with best practice guidelines (“protocols”) in the medical domain.     

The synergistic effects of IT-enabled resources on organizational capabilities and firm performance

Computing the value of IT investments and clarifying how the portfolio of IT/IS resources affect a firm's performance and sustainable competitive advantage are critical issues today. We attempted to develop an effective measurement technique and use organizational theory to discover the strategic role of IT-enabled resources in the firm's competitive agenda. Based on a resource-based view of the firm, we proposed a way to evaluate the synergistic effect of such resources on the firm's capabilities, as they, influence the firms’ strategic objectives and improve its financial performance. The technological, human, and organizational resources work together to generate sub-additive cost and super-additive value synergies. Operations, R&D, and marketing capabilities allow firms to implement a business strategy that reflects its customer needs. A survey was conducted to check our framework. Our findings should provide valuable decision guides for practitioners when choosing a portfolio of IT/IS resources for implementing business strategies.     

Can ITIL contribute to IT/business alignment? An initial investigation

Strategic alignment has been viewed as one of the main concerns of management and IT executives. Organizations have realized that in order to achieve competitive advantage, IT needs to be strategically aligned with business objectives. Strategic alignment enables organizations to choose IT applications that meet their needs and as a result, to enhance their profitability and reduce costs. Despite the importance of this matter and a large body of literature written on this subject, it has not yet been identified how it can be successfully achieved and maintained. This paper attempts to provide insight on this matter by investigating an initiative called Information Technology Infrastructure Library (ITIL), which ensures the effective and efficient delivery of IT services. The intention of this research was to identify how effective ITIL was in improving alignment between IT and business objectives. The Strategic Alignment Model (SAM) developed by Henderson and Venkatraman was used for this research. This consists of four parts: IT strategy; business strategy; organizational infrastructure and processes; and IS infrastructure and processes. By placing ITIL in the internal domain of the model as a substitute for the IS infrastructure and processes it has been identified that it has the ability to impact the other three main areas of the model and as result enables alignment between all the four parts of model to be achieved. In addition to the above an empirical study has been conducted in order to further investigate the ability of ITIL in achieving alignment between IT and business objectives. Four participants have been interviewed from three organizations ranging from education and banking to the IT sector. The results of the research indicate that ITIL has potential as an effective approach in achieving alignment.     

Dynamic information technology capability: Concept definition and framework development

In a digital world, information technology (IT) units routinely update their capabilities to cope with changing business requirements and frequent technology releases. Extending the dynamic capabilities literature, this article presents the concept of dynamic IT capability, a multidimensional first-order dynamic capability that enables IT units to assist firms in appropriating business value from IT resources by influencing a set of IT-related ordinary capabilities. Scholars currently lack a dynamic capabilities framework that explains, from an IT unit’s perspective, how IT resources can be acquired, deployed, integrated, and reconfigured to fulfill business objectives. To bridge this research gap, we develop a high-level framework that highlights three constituent components of dynamic IT capability: dynamic digital platform capability, dynamic IT management capability, and dynamic IT knowledge management capability. Through an extensive literature review, we identify and summarize the set of ordinary capabilities that each dynamic IT capability component creates and reconfigures. We then offer guidance on future instrument development. To encourage further exploration of this critical construct, we close by highlighting future avenues for dynamic IT capability research.