Business-Information Technology Alignment Theories

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
The Concept of IT Alignment
Key Theories
Key Antecedents and Outcomes
The Necessity of Research
Conclusion
References

Introduction

Today the world is changing rapidly, and the organizations need to implement various changes to remain competitive and enhance their financial performance. The ways in which these objectives can be achieved altered with the course of time. Today the world depends on technologies greatly and even the operations in the sphere of business cannot be efficiently maintained without them. Informational technology (IT) can be successfully used by the professionals to produce business value. The connection between these two spheres is seen as business-IT alignment.

The Concept of IT Alignment

Different organizations regularly invest in their IT departments to improve the outcomes of their operations. Still, their executives do not see the sense in such actions rather often. These may happen because they do not maintain the alignment, which reduces the benefit that can be gained from this investment. Alignment is not the thing that can be reached without any efforts. It is one of the main concerns that the chief information officers (CIOs) and the chief executive officers (CEOs) have.

To achieve it, the company should consider the connection between its IT and business strategies instead of treating them as two different things. The most advantage is usually seen when the managers who work with them cooperate and exchange information. In this way, the realization that the information systems (IS) play a vital role in the performance of the organization is critical.

As a rule, business professionals and those that work in the IT department cannot bridge the gap that exists between them due to the alterations in their operations, which often leads to the usage of IT systems that do not meet the expectations of the executives and are very expensive. To achieve IT alignment, several steps should be managed. The superiors should realize that IT is the tool that can be used to transform their business.

Different facets can be combined to achieve mutual success. It is possible to use general data storage to allow the partners to share their knowledge. The customer service can be also improved, as IT provides an opportunity to communicate with them and receive their feedback without any difficulties. Thus, the organization can build its business strategy in regard to the interactions with the help of IT. The professionals of the mentioned spheres should improve their knowledge of various operations constantly because such approach allows them to understand what is really needed by the organization and to cooperate.

On the basis of the gained information, IT and business professionals can gain personal goals targeted at the achievement of the common one. In this way, CEOs will not question the effectiveness of the investments in IT and claim that the money is wasted. Finally, different departments will treat themselves as a whole but not as the elements that exist in diverse environments (Preston & Karahanna, 2009).

Key Theories

Resource-based theory can be considered as the main one when discussing IT alignment because it reveals the way, in which the understanding of how knowledge sharing can uncover IT-based opportunities and produce superior strategies (Kearns & Lederer, 2003, p. 2).

In other words, the communication of information between CEO and CIO is investigated. Their participation in the processes managed by other departments ensures that the strategies they develop consider various dimensions and will bring benefit. According to this theory, the financial performance of the company depends mainly on its internal resources of the organization. Thus, if the market advantage that is gained due to the unique firms resources, competitive advantage can be expected. In the framework of the traditional theory, the situation is seen in another way, and external environment is considered to be the predictor of superior profitability.

Upper Echelons theory is also connected with IT alignment, but it mainly focuses on the connection between strategic choices and the way CEOs treat the alignment. Preston and Karahanna (2009) claim that shared understanding of the situation by business and IT professionals influences alignment. It is mentioned in their research that shared understanding allows the CIO to influence the business strategy, prompts the CIO and TMT to reach common organizational goals and objectives through better organizational planning, and facilitates the alignment of the organizations IS strategy with its business strategy (Preston & Karahanna, 2009, p. 163).

Uncertainty reduction theory, in its turn, proves that when the degree of mutual understanding between CEO and CIO is low, their uncertainty regarding the operations and problems faced by the company increases. However, Johnson and Lederer (2010) also underline that there is a positive side of this, as when obtaining less information, the professionals tend to experience less stress and manage their duties efficiently.

Key Antecedents and Outcomes

There are several antecedents of IT alignment. First of all, it deals with the relationship between CIO and CEO. Their cooperation ensures that the strategies are implemented will be beneficial for the organization and that its investments will not be wasted. Communication between these professionals is also likely to turn into the creation of a shared knowledge system and educational mechanisms. This knowledge, in its turn, will ensure the understanding between the departments. The professionals will gain an opportunity to take into consideration the goals of their colleagues and reduce the number of issues, which will increase the profits.

CIO characteristics and abilities are also very influential, as they affect the way the employees work, accept changes and work in a team, etc. The record of the department should be tracked to make sure that the amount of the revenue is decent and increases. In this way, it will be proved that the investment in IT was a right choice and that the alignment is successfully managed. If some drawbacks are seen, the professionals gain a chance to find a solution before the outcomes influence the company adversely (Preston & Karahanna, 2009).

IT alignment can be seen in several perspectives. It should be maintained when the increase of customer satisfaction is needed because it is the priority of both CIOs and CEOs. As a rule, the reason for investment in IT is seen as the opportunity to influence sales revenue. An extended share of the market can be also achieved with the help of IT alignment. It also has a great impact on the return of investment and operating efficiency.

The existence of IT alignment in the organization is likely to make its decision-making process more sufficient. It will also lead to the creation of the flexible business plan and make sure that the best return on investment is gained. The costs will be allocated effectively, which will reduce the expenditures. Due to the cooperation between business and IT professionals, the first ones will also receive a chance to enhance their knowledge of the most recent technical capabilities available on the market and the way they can increase the profit of the company.

The Necessity of Research

As it can be concluded from the information mentioned earlier, many executives fail to realize that they can gain an enormous advantage from the investment in IT. The alignment is unknown to them, which proves that they cannot communicate effectively. The professionals may be involved in conflicts rather often because they do not realize that a little change can improve the situation. They fail to cooperate successfully and achieve mutual understanding. As a result, the effectiveness of the decision-making process occurs to be not good enough to allow the company to reach its goals and enhance its competitive advantage.

Of course, IT alignment was already discussed by different researchers, but the fact that the businesses still face the same problems and that there are only few studies that investigate the issue proves that we should conduct research on IT alignment. Moreover, the researches that exist often perform the results that refute one another. It is necessary to find out some peculiarities of IT alignment that were not considered previously.

It should be investigated if the cooperation between CEO and CIO really entails the creation of the superior organizational knowledge that makes the company benefit, and whether this theory can be generally applied. The antecedents of IT alignment should also be deeply discussed. It might be advantageous to assess educational mechanisms. The organization of arrangements targeted at the cooperation can be considered as well as their frequency. Finally, the things that facilitate alignment should be closely considered.

Conclusion

Thus, IT alignment plays an important role in the life of any organization as it deals with the interactions between CEO and CIO. It affects decision-making and various operations that affect the profit gained by the company. To maintain IT alignment, the professionals should implement a range of changes taking into consideration their influence on the day-to-day activities and overall performance.

References

Johnson, A., & Lederer, A. (2010). CEO/CIO mutual understanding, strategic alignment, and the contribution of IS to the organization. Information & Management, 47(1), 138-149. Web.

Kearns, G., & Lederer, A. (2003). A resource-based view of strategic IT alignment: How knowledge sharing creates decision science. Decision Sciences, 34(1), 1-29. Web.

Preston, D., & Karahanna, E. (2009). Antecedents of IS strategic alignment: A nomological network. Information Systems Research, 20(2), 159-179. Web.

Click Here To Order Now!