What is Business-IS “Strategic Alignment”?

20 Oct

Strategic alignment constitutes a vital part of strategic planning and its function is to ensure that the personnel, products, processes and systems within a business line up correctly and support the organisation in achieving its goals and performing to its maximum capability. However, when we talk about strategic alignment in terms of a business and how it relates to information systems, it is clear that there is a need to be more specific in our discussion. This particular area deals with how organisations can best use and leverage IS and IT in order to achieve greater business results, because ‘Strategic alignment or “fit” is a notion that is deemed crucial in understanding how organisations can translate their deployment of information technology into actual increases in performance’ [Bergerson et. al 2004].

In his article Ideal Patterns of Strategic Alignment and Business Performance, Bergerson writes that the ‘fundamental view of fit propounded by strategic management researchers and organisational theorists is that it involves a search for aligning the organisation with its environment and arranging resources to support that alignment’ [Bergerson et al. 2004]. One of the key resources of modern businesses is Information Systems so it only stands to reason that it is vitally important that organisations arrange this resource correctly to improve performance. Bergerson continues by stating that firms ‘whose strategy and structure are aligned should be less vulnerable to external change and internal inefficiencies and should thus perform better… Strategic change creates the need for more information and greater information gathering, interpreting, and synthesis capabilities’ [Bergerson et al. 2004]. Consequently, the need to utilise more information than ever before makes IS essential to business.

Y.E. Chan makes specific reference to ‘Business-IS strategic alignment’ when he writes, ‘Information Systems strategic alignment- the fit between business strategic orientation and information systems strategic orientation- is an important concept’ [Chan et al. 1997]. From barely scratching the surface of some of the literature that deal with this topic it is clear that it is a concept that has been the subject of much debate between researchers due to its complicated nature and importance to modern business. A recent study states that after ‘two decades of extensive research and debate, strategic IT alignment, defined as the extent of fit between information technology and business strategy, remains a top priority for information systems researchers and practitioners’ [Tallon and Pinsonneault 2011]. These same writers go on to say that the extent of alignment between IT and business strategy is positively associated with firm performance, thus making it clear why this topic is of such interest and value to businesses. Nowadays, with information systems becoming more important and pervasive in the world of business than ever before, the alignment of a business and its information systems is paramount for success. However, this alignment is complicated as organisations, information and technologies change and evolve constantly, and ‘to acquire and sustain strategic alignment is frustrating and difficult’ [Bergerson et al. 2004].

Thus, from my initial research it has quickly become apparent that the topic of ’Business-IS Strategic Alignment’ is one that holds extreme value to the world of modern business and has caused much debate and argument amongst researchers and analysts to date. Join us for future blogs in which we will delve deeper into this intriguing subject.

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