Why is IT important to align information systems with organizational processes culture and strategy?

Download the PDF: IS Alignment Curation
Download the Infographic: IS Alignment Infographic
Download the References: IS Alignment References

1.  Focus of the Research Curation

The alignment of Information Systems (IS) with the business (i.e., hereafter IS alignment) has been a top managerial concern for over 30 years and remains an ongoing research stream of key interest to the IS discipline. IS alignment[1] represents an emergent process of dynamic interactions and continual adjustments between business and IS across multiple organizational dimensions (e.g., strategic, operational and social) and also organizational levels (e.g., the organization itself, group level, and the individual level) that collectively can potentially result in greater organizational performance (Benbya and McKelvey 2006) (See Figure 1). The goal of this curation is to provide a state of the art perspective on IS alignment research published in MIS Quarterly in order to offer a reference point and platform for future research on IS alignment.

Given the established plurality of meanings embedded in the term ‘alignment’ and multiple ways in which researchers have employed this term to date, in this curation we apply a general selection requirement for our initial pool of research studies.  In order to maximize the inclusion of all potentially relevant studies, we used multiple keywords to identify relevant articles for inclusion including: alignment, misfit/fit, linkage/linking, gestalt, congruence, and harmony.  This inclusive approach for the search process resulted in 46 articles. The researchers then reviewed the abstracts of each paper for relevance in order to distinguish between articles that focus on “IS alignment” from articles that merely mention the word “alignment” or “fit” in what would be considered a colloquial fashion.  For papers where there was some question whether the paper fell under of the umbrella of the IS alignment research stream, the authors collectively made the judgment to reach a decision about inclusion/exclusion of the papers.  We sought to include all papers where IS alignment plays an essential role in the study, even if alignment was not necessarily the primary focal point, provided alignment was either a key component of the overall model (e.g., independent, dependent, mediating or moderating variable) or the study clearly suggested a proposition/hypothesis or implications related to IS alignment (please refer to Table 1). Upon conclusion of the screening process, there were 29 articles from the relevant literature base that were determined to be related to the IS alignment research stream published in MISQ from the journal’s inception through November 2018, inclusive.  

For the coding process, each researcher proceeded with a detailed examination and coding of approximately 10 of the 29 articles. Beyond collecting basic article information (e.g., author, year, title), we coded for type of alignment, level of analysis, perspective or theory used, research method applied, and key findings/insights (please see Table 2). To ensure consistency in the coding process, each researcher began by coding a common set of 3 papers with a discussion of results among the research team. Any deviations in coding were discussed and assessed among the coders, with the coding heuristics updated to address any such inconsistencies. After this step, consistencies in the coding process were fine-tuned and an inter-coder reliability of 0.95 was achieved. Each researcher subsequently proceeded with coding a designated set of approximately 10 papers.  

Of the 29 articles reviewed, we observed the following: a) the vast majority of the papers (22) examined alignment at the organizational level; b) four papers examined alignment at the business unit level (e.g., Reich and Benbasat 2000); c) two papers examined alignment at the group level (e.g., Kane and Borgatti 2011); and d) one study examined multiple units and entities (Leonardi et al. 2016). We note that there is a diversity of IS alignment research that is reflected both in the methodologies used to study IS alignment as well as the perspectives/theories used to investigate different forms of alignment. As Table 2 outlines, researchers have drawn from a wide spectrum of methodologies: quantitative, including industry surveys (13), qualitative case studies (12), multi-method mixed-studies (2), conceptual studies (2) and a meta-analysis (1).

Figure 1: The Alignment Process

2.  Progression of Research in MISQ

The researchers evaluated the temporal progression of IS alignment research in MISQ via three time periods: 1) Prior to 2000, 2) 2000-2010, and 3) 2011-to November 2018.

The earliest research on IS alignment in MISQ appeared in the early to mid-1980s and was largely based on industry reports and surveys.  A key finding from the early alignment research was the discovery that alignment was considered by IS executives to not just be merely a relevant concern, but to be among the leading issues facing IS executives (e.g., Cartog and Herbert 1986). The importance of IS alignment to practitioners would remain a perennial issue in later industry studies (e.g., Niederman, Brancheau and Wetherbe 1991). Researchers initially focused on the relationship of strategic IS planning to IS strategic alignment and investigated multiple dimensions of planning success (e.g., Segars and Grover, 1998). The recognition that IS strategy alone did not create effective alignment subsequently prompted researchers to advocate a shift in focus from exclusively examining the IS strategic dimension to also integrating IS structure (e.g., Tavakolian 1989, Brown and Magill 1994) and culture (Reich and Benbasat, 1996). To accommodate this shift and investigate different IS structures, strategies, and social dimensions, researchers relied both on quantitative matched pair samples of questionnaires from IS and top business managers, as well as qualitative case studies, starting a trend that would continue to the present.

The study of IS alignment in MISQ has evolved appreciably between 2000-2010. Three main shifts characterize this development of the IS alignment literature in this time frame. First, there was a shift in focus from alignment drivers into the business-IT performance implications of alignment which was demonstrated theoretically (Chen et al. 2011), empirically (Oh and Pinsonneault 2007), and through case studies (Davidson and Chismar 2007). Second, there was recognition that the misalignment of IT capabilities and social structures can result in a failure to realize expected organizational outcomes (Strong and Volkoff 2010). Third, researchers questioned the conception of IS alignment as a linear relationship in which alignment links a set of antecedents to organizational consequences (i.e., Antecedents à Alignment à Consequences) thus recognizing the necessity to embrace a more complex perspective on IS alignment.  

Starting 2011, researchers have gradually devised ways to account for the complexity of IS alignment in both their theoretical and empirical work. For numerous years, researchers have tended to emphasize the strategic dimension of alignment (i.e., as an outcome or state), relying mostly on contingency theories in which IS strategy profiles are developed to conform to a particular business strategy type from which a stable alignment state is derived. However, this view can lead to excessive rigidity and conditions of misalignment, because it does not substantially account for the possibility of a complex, dynamic and unpredictable competitive environment (e.g., Tallon and Pinsonneault 2011; Chen et al. 2010; Gerow et al. 2014). To account for this increased awareness, IS alignment researchers gradually started to include contextual factors in their studies, including environmental characteristics (e.g., environmental volatility, dynamism, munificence and complexity) (Xue, Ray and Sambamurthy, 2012), and the firm’s ability to adapt and respond to environmental change (e.g., IT flexibility, agility) (Tallon and Pinsonneault 2011). This recognition has also resulted in the adoption of a richer application of theories (e.g., typological theory, configurational theory, and complex adaptive systems) to help explain the development of IS alignment and other related outcomes such as IS appropriation and IT business value (e.g., Banker, Pavlou and Luftman, 2011; Guillemette and Paré 2012; McMaren, Yuan and Chan 2011; Leonardi et al. 2016).

3. Thematic Advances in Knowledge

Three main themes emerge from our analysis of the articles: (1) IS alignment conceptualization, (2) IS alignment antecedents, and (3) IS alignment/misalignment consequences. We note that alignment has been defined via various terms such as: the degree of fit and integration, linking IT and business, etc. (see table 1). This breadth of definitions pertaining to alignment implies that alignment can assume multiple forms.  Researchers have gradually converged toward three main dimensions: a) strategic, b) operational, and c) social.

Research on strategic alignment is overall the most dominant perspective and focuses on how to align IS strategy with the organization’s business strategy to derive a greater strategic use from IS and thereby generate greater organizational performance (e.g., Oh and Pinsonneault 2000; Gerow et al. 2014; Wu et al. 2015). This sub-theme has advanced knowledge with regard to the role of strategic planning styles (e.g., Pyburn, 1983, Cartog and Herbert, 1986), the dimensions of planning success (Segars and Grover, 1998), and the development of different IS strategy profiles, typologies and configurations to better align IS and business strategy (e.g., Chen et al. 2010). Despite the progress made within this research theme, it has been critiqued based on several issues. First, the assumption that IS strategy should have to conform to the organization’s business strategy has been questioned and has since gradually given way to a bidirectional and co-evolutionary perspective between IS and business strategy in which both strategies develop iteratively and reciprocally over time. Second, the conception of IS strategy as a planned or intended strategy has evolved towards that of a realized strategy or an assessment of both planned and realized strategies (e.g., McLaren et al. 2011). Third, the conception of IS alignment as a static outcome has gradually shifted towards that of a dynamic emergent process (See Figure 1 above).  

Research on operational alignment has focused on the ability of management to integrate IS infrastructures with the business processes within the organization. Research within this sub-theme has specifically examined the way to best align different IS structures with specific organizational contexts (e.g., Brown and Magill 1994), the interplay between structural change and alignment (e.g., Majchrzak et al. 2000), and the formal organizational structural mechanisms that need to be incorporated in order to reduce cases of misalignment (e.g., Wu et al. 2015).

Finally, the social alignment sub-theme focuses on values, communications, and shared understanding among business and IT executives (Reich and Benbasat, 1996). The few existing studies in MISQ in this domain have advanced knowledge relevant to the effects of shared domain knowledge on communication between IS and business executives and its influence on short and long term social alignment (Reich and Benbasat 2000). The studies on social alignment, however, have not investigated the impact of social alignment on downstream performance.

These advances in construct conceptualization – as we move from planned to actual strategies for a range of different strategies and dimensions (operational and social) – have been accompanied by the development of theories to account for the complexity of IS alignment, whether at a single level of analysis (e.g., at the individual, group, or organizational level) or across-levels of analysis. Research has also recognized the necessity to move from a single or dyadic relationship towards multi-level research to understand the non-linear interactions between alignment dimensions that might be operating simultaneously over time.

The IS alignment/misalignment antecedents theme has contributed a myriad of factors believed to influence alignment. For instance, Wu et al. (2014)’s study proposes a series of governance mechanisms (e.g., decision-making structures, formal processes, and communication approaches) that act as antecedents to the intellectual dimension of alignment and also mediate the relationship between alignment and organizational performance. In addition, Banker et al. (2011) demonstrate that the alignment between the firm’s CIO reporting structure and its strategic positioning affects firm performance. Furthermore, Leonardi et al. (2016) found that social and financial rewards encouraged actors to appropriate system elements allowing for local alignment in multiple settings. Other studies have focused instead on misalignment between an organization’s social structures with its technology capabilities. Such studies document discrepant events and show how changes to structures reduce misalignment over time (Majchrzak et al. 2000, Davidson and Chismar 2007).

Finally, research on the consequences of IS alignment/misalignment have advanced knowledge regarding how to cultivate alignment between business and IT dimensions resulting in such key organizational outcomes as competitive advantage, business performance, quality improvement, cost reduction, and revenue growth (e.g., Daniel et al. 2010; Oh and Pinsonneault, 2007; Rai et al. 2015). Findings within this stream have extended our understanding of how misalignment occurs and in turn shapes a variety of other IT related phenomena such as IT organizational awareness (Spears and Barki, 2010) and outsourcing performance (Mani, Barua and Whinston, 2010). Despite these advances in the literature, no universal evidence concludes to date that alignment has direct or positive performance implications. To help flesh out the alignment-performance ‘paradox’, Gerow et al. (2014) conducted a meta-analysis of empirical papers on the IS alignment-performance relationships. This research concluded that the alignment—performance relationship is positive across studies; however, the relationship between strategic alignment and firm performance was found to be negative in some situations. This may occur, for example, when an organization diverts such extensive resources into the strategic planning process that it inadvertently loses focuses on actual performance or when an organization only aligns strategy at the highest managerial level and fails to engage middle and operational managers in the strategy. These results suggest that a complex relationship exists between alignment dimensions and business value.

Conclusion

The alignment research has converged to suggest three major conclusions – that there are various forms of alignment, that alignment is dynamic, and that periods of misalignment are beneficial on account of adjustments made.  Alignment is of practical importance for organizations wishing to achieve superior performance with IS.  Alignment is also becoming a theory in its own right, with the potential to serve as a useful lens through which to view manifold IS phenomenon in the digital age. 

Please cite this curation as follows: Benbya, H., Leidner, D. and Preston, D. “Information Systems Alignment,” in MIS Quarterly Research Curations, Ashley Bush and Arun Rai, Eds., http://misq.org/research-curations, March, 2019. doi: 10.2530003152019

References

Banker, R. D., Hu, N., Pavlou, P. A., and Luftman, J. 2011. “CIO Reporting Structure, Strategic Positioning, and Firm Performance,” MIS Quarterly (35:2), pp. 487–504. Also available at https://aisel.aisnet.org/misq/vol35/iss2/13/.

Benbasat, I. 2000. “Factors That Influence the Social Dimension of Alignment Between Business and Information Technology Objectives,” MIS Quarterly (24:1), pp. 81–113. Also available at https://aisel.aisnet.org/misq/vol24/iss1/4/.

Brown, C. V, and Magill, S. L. 1994. “Alignment of the IS Functions With the Enterprise : Toward a Model of Antecedents,” MIS Quarterly (18:4), pp. 371–403. Also available at https://aisel.aisnet.org/misq/vol18/iss4/4/.

Chen, D. Q., Mocker, M., Preston, D. S., and Teubner, A. 2010. “Information Systems Strategy: Reconceptualization, Measurement and Implications,” MIS Quarterly (34:2), pp. 233–259. Also available at https://aisel.aisnet.org/misq/vol34/iss2/4/.

Davidson, E. J., and Chismar, W. G. 2007. “The Interaction of Institutionally Triggered and Technology-Triggered Social Structure Change: An Investigation of Computerized Physician Order Entry,” MIS Quarterly (31:4), pp. 739–758. Also available at https://aisel.aisnet.org/misq/vol31/iss4/6/.

Francalanci, C., and Galal, H. 1998. “Information Technology and Worker Composition : Determinants of Productivity in the Life Insurance Industry,” MIS Quarterly (22:2), pp. 227–241. Also available at https://aisel.aisnet.org/misq/vol22/iss2/5/.

Gerow, J. E., Grover, V., Thatcher, J., and Roth, P. L. 2014. “Looking Toward the Future of IT-Business Strategic Alignment through the Past: A Meta-Analysis,” MIS Quarterly (38:4), pp. 1159–1185. Also available at https://aisel.aisnet.org/misq/vol38/iss4/12/.

Guillemette, M. G., and Paré, G. 2012. “Toward a New Theory of the Contribution of the IT Function in Organizations,” MIS Quarterly (36:2), pp. 529–551. Also available at https://aisel.aisnet.org/misq/vol36/iss2/11/.

Hartog, C., and Herbert, M. 1986. “1985 Opinion Survey of MIS Managers: Key Issues,” MIS Quarterly (10:4), pp. 351–361. Also available at https://aisel.aisnet.org/misq/vol10/iss4/4/.

Kane, G. C., and Borgatti, S. P. 2011. “Centrality–IS Proficiency Alignment and Workgroup Performance,” MIS Quarterly (35:4), pp. 1063–1078. Also available at https://aisel.aisnet.org/misq/vol35/iss4/14/.

Leifer, R. 1988. “Matching Information Systems with Organizational Structures Categorizing Computer-Based,” MIS Quarterly (12:1), pp. 63–73. Also available at https://aisel.aisnet.org/misq/vol12/iss1/5/.

Leonardi, P. M., Bailey, D. E., Diniz, E. H., Sholler, D., and Nardi, B. 2016. “Multiplex Appropriation in Complex Systems Implementation: The Case of Brazil’s Correspondent Banking System,” MIS Quarterly (40:2), pp. 461–473. Also available at https://aisel.aisnet.org/misq/vol40/iss2/13/.

Majchrzak, A., Rice, R. E., Malhotra, A., King, N., and Ba, S. 2000. “Technology Adaption: The Case of a Computer-Supported Inter-Organizational Virtual Team,” MIS Quarterly (24:4), pp. 569–600. Also available at https://aisel.aisnet.org/misq/vol24/iss4/2/.

Mani, D., Barua, A., and Whinston, A. 2010. “An Empirical Analysis of the Impact of Information Capabilities Design on Business Process Outsourcing Performance,” MIS Quarterly (34:1), pp. 39–62. Also available at https://aisel.aisnet.org/misq/vol34/iss1/5/.

Mclaren, T. S., Head, M. M., Yuan, Y., and Chan, Y. E. 2011. “A Multilevel Model for Measuring Fit Between a Firm’s Competitive Strategies and Information Systems Capabilities,” MIS Quarterly (35:4), pp. 909–929. Also available at https://aisel.aisnet.org/misq/vol35/iss4/7/.

Niederman, F., Brancheau, J. C., and Wetherbe, J. C. 1991. “Information Systems Management Issues for the 1990s,” MIS Quarterly (15:4), pp. 475–501. Also available at https://aisel.aisnet.org/misq/vol15/iss4/4/.

Oh, W., and Pinsonneault, A. 2007. “On the Assessment of the Strategic Value of Information Technologies: Conceptual and Analytical Approaches,” MIS Quarterly (31:2), pp. 239–265. Also available at https://aisel.aisnet.org/misq/vol31/iss2/3/.

Pyburn, P. J. 1983. “Linking the MIS Plan with Corporate Strategy: An Exploratory Study,” MIS Quarterly (7:2), pp. 1–14. Also available at https://aisel.aisnet.org/misq/vol7/iss2/1/.

Rai, A., Arikan, I., Pye, J., and Tiwana, A. 2015. “Fit and Misfit of Plural Sourcing Strategies and IT-Enabled Process Integration Capabilities: Consequences of Firm Performance in the U.S. Electric Utility Industry,” MIS Quarterly (39:4), pp. 865–885. Also available at https://aisel.aisnet.org/misq/vol39/iss4/8/

Reich, B. H., and Benbasat, I. 1996. “Measuring the Linkage Between Business and Information Technology Objectives,” MIS Quarterly (20:1), pp. 55–81. Also available at https://aisel.aisnet.org/misq/vol20/iss1/3/.

Segars, A. H., and Grover, V. 1998. “Strategic Information Systems Planning Success : An Investigation of the Construct and Its Measurement,” MIS Quarterly (22:2), pp. 139–163. Also available at https://aisel.aisnet.org/misq/vol22/iss2/2/.

Slaughter, S. A., Levine, L., Ramesh, B., Pries-heje, J., and Baskerville, R. 2006. “Aligning Software Processes with Strategy,” MIS Quarterly (30:4), pp. 891–918. Also available at https://aisel.aisnet.org/misq/vol30/iss4/7/.

Soh, C., Markus, M. L., and Goh, K. H. 2006. “Electronic Marketplaces and Price Transparency: Strategy, Information Technology, and Success,” MIS Quarterly (30:3), pp. 705–723. Also available at https://aisel.aisnet.org/misq/vol30/iss3/9/.

Spears, J. L., and Barki, H. 2010. “User Participation in Information Systems Security Risk Management,” MIS Quarterly (34:3), pp. 503–522. Also available at https://aisel.aisnet.org/misq/vol34/iss3/8/.

Strong, D. M., and Volkoff, O. 2010. “Understanding Organization–Enterprise System Fit: A Path to Theorizing the Information Technology Artifact,” MIS Quarterly (34:4), pp. 731–756. Also available at https://aisel.aisnet.org/misq/vol34/iss4/8/.

Tallon, P. P., and Pinsonneault, A. 2011. “Competing Perspectives on the Link Between Strategic Information Technology Alignment and Organizational Agility: Insights from a Mediation Model,” MIS Quarterly (35:2), pp. 463–486. Also available at https://aisel.aisnet.org/misq/vol35/iss2/12/.

Tavakolian, H. 1989. “Linking the Information Technology Structure With Organizational Competitive Strategy: A Survey,” MIS Quarterly (13:3), pp. 309–317. Also available at https://aisel.aisnet.org/misq/vol13/iss3/5/.

Wu, S. P.-J., Straub, D. W., and Liang, T.-P. 2015. “How Information Technology Governance Mechanisms and Strategic Alignment Influence Organizational Performance: Insights from a Matched Survey of Business and IT Managers,” MIS Quarterly (39:2), pp. 497–518. Also available at https://aisel.aisnet.org/misq/vol39/iss2/12/.

Xue, L., Ray, G., and Sambamurthy, V. 2012. “Efficiency or Innovation: How Do Industry Environments Moderate the Effects of Firms’ IT Asset Portfolios,” MIS Quarterly (36:2), pp. 509–528. Also available at https://aisel.aisnet.org/misq/vol36/iss2/10/.

 Table 1. MIS Quarterly Papers on IS Alignment

Table 2. Coding Results for MISQ IS Alignment papers  

Figure 2. IS Alignment Infographic

 [1] We draw on diverse IS research in conceptualizing and defining IS alignment including Benbya, H. and McKelvey, B. 2006. “Using Coevolutionary and Complexity Theory to improve IS Alignment: A multi-level Approach,” Journal of information technology (21:4), pp. 284-298 and Benbya, H. and Leidner, D. 2018. “How Allianz UK Used an Idea Management Platform to Harness Employee Innovation,” MIS Quarterly Executive (17:2), pp. 141-157.

Why should information systems be aligned to an Organisation's strategic plan?

Why is IT important to align strategy business processes and ICT in an Organisation?

Why is alignment so important in the strategy development process?

What are the three main goals of an organization when aligning its information technology with business objectives?