Alignment of IT projects with business strategy: An analysis of the interrelationships between the factors affecting IS alignment at strategic, tactical and operational levels

Abstract

Despite numerous efforts to integrate business and IS strategic plans, organisations are not delivering the expected benefits from IS investment. To address this issue, IS alignment research has discussed extensively the idea of establishing two-way commitment between business and IS managers. This commitment, however, has proved to be difficult to achieve at strategic level and consequently difficult to transmit to lower levels within organisations. Given that current literature has identified the main factors affecting IS alignment, this research extends the analysis of those factors to tactical and operational levels to develop a model that depicts the dynamic interrelationships between the factors affecting IS alignment. Through an interpretative approach that combines quantitative and qualitative methods, the model was developed, tested and evaluated in three phases. During the exploratory phase the factors IT governance, communication, partnership, IT value, scope & architecture and human resources skills were scrutinised using a pilot case study and a survey. The results aided the selection of relevant variables that could be used in the model to assess alignment across different levels, and therefore, to develop a preliminary model that included the initial relationships between the factors. For the testing phase, a case study approach was selected. An IS alignment assessment process was designed and applied in one SME and one large organisation. Although the assessment process did not prove appropriate in an SME context, the application of the assessment process in the large organisation allowed the identification of the root causes of high or low levels of IS alignment of five strategic IT projects. For the evaluation phase further analysis was conducted to modify the preliminary model in the light of the outcomes from the large organisation. The findings from the evaluation phase helped in the identification of two categories of factors (structural and dynamic) and how they interrelate, and these are incorporated into the final model. Structural factors refer to those cultural and structural forces that determine whether the information systems function is valued or not as a partner in delivering business value from IT investments. On the other hand, the dynamic factors refer to those aspects that impact on IS alignment as a result of the dynamic interaction between the people involved in the strategy formulation and implementation. The model and the assessment process represent a contribution towards a better understanding of the nature of IS alignment.