Army Institute of Business Administration

Savar Cantonment, Savar, Dhaka.

Army IBA
Topic Name : Term Paper Report On IT Business Alignment
Course Name : Information Technology for Business Value
Course Code : BUS 5103

Submitted To :
Name : Afzal Hossain
Designation : Assistant Professor

Submitted By :
Name : Md. Dalim Hossain
Roll No : M9200B023
Batch : MBA-9

Date of submission : 08 / 10 /2020

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5th October, 2020
Afzal Hossain
Assistant Professor
AIBA, Savar, Dhaka.

Subject: Term Paper Submission on “ IT Business Alignment”

Dear Sir,
It is to cordially to inform you that, I have completed writing a term paper, which topic is-
“IT Business Alignment”. This is a great pleasure for me to be able to present you with this
report. For preparing this report I have collected essential data using primary and secondary
sources. I have learnt a lot of new and unique fact of business expansion during preparing the
paper. It was a challenging experience for me to prepare a theoretical as well as practical
knowledge based coordinated report based on my work and the studies. I tried my best to use
the guidelines and counselling provided by you to make this report as informative as possible.
Without your inspiration this report would have been an incomplete one. Though we are in
learning curve, this report has enabled us to gain insight into the core fact of Business
Expansion.

I express my heartiest gratitude for providing me with the opportunity to complete this report
as a term paper. I would be greatly obliged if you call me for any explanation or any query
about the report as and when deemed necessary.

Sincerely,

Md. Dalim Hossain

ID-M9200B023
MBA-09
Army IBA Savar, Dhaka.

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 Declaration

I hereby declare that the Term Paper entitled “IT Business Alignment” submitted by me to
Army Institute of Business Administration, Savar in partial fulfillment of the requirement
for the award of the degree of MBA is a record of Term Paper work carried out by me under
the guidance of Afzal Hossain, Assistant Professor, Department of CSE, and I am the sole
author of the Term Paper.

I am declaring to the best of my knowledge my term paper does not infringe upon anyone’s
copyright nor violate any proprietary rights any ideas. Techniques, quotations or any other
materials from the work of other people included in my paper, published or otherwise are
fully acknowledged in accordance with the standard referencing practices. I certify that this is
the true copy of my term paper.

I further declare that the work reported in this project has not been submitted and will not be
submitted, either in part or in full, for the award of any other degree in this institute or any
other institute or university.

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 Acknowledgement
First and foremost, praises and thanks to the God, the Almighty, for His showers of blessings
throughout my work to complete the Term Paper successfully.

I would like to express my deep and sincere gratitude to various people, organizations for
their support, contributions and my supervisor, Afzal Hossain, Assistant Professor,
Department of CSE, Army Institute of Business Administration, Savar for giving me the
opportunity to do the paper and providing invaluable guidance throughout this term paper
report work. Now that I have reached this top level stage in my academic career, I would like
to say thank you and muchas gracias to my supervisor. His dynamism, vision, sincerity and
motivation have deeply inspired me. He has taught me the methodology to carry out the work
and to present the paper works as clearly as possible. It was a great privilege and honor to
work and study under his guidance. I am extremely grateful for what he has offered me. I
would also like to thank him for his friendship, empathy and great sense of humor.

I am extremely grateful to my boss for their love, prayers, caring and sacrifices for educating
and preparing me for my future. I am very much thankful to my brother, for their support and
valuable prayers. My Special thanks goes to my friend shamim Chowdhury for the keen
interest shown to complete this Term paper successfully.

I am extending my thanks to my colleague and the Head of IT at Bashundhara Group, Mr.

Rubayet Hasan, for helping me a lot about this topic with his professional expertise and
excellence to complete the term paper. I feel really grateful for his immense guidelines to
enrich the information regarding the topic of the paper.

Finally, my thanks go to all the people who have supported me to complete the term paper
report work directly or indirectly.

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 Abstract

Strategic business and IT alignment assessment is growing in importance. Different

assessment methods have been used to try to pursue the complexity of this dynamic and
evolutionary alignment. Despite the fact that alignment is a real problem and a challenge of
utmost importance, no consensus can be found on what alignment really is, how it should be
measured in the organization in practice or what measures should be taken to maintain and
improve it. Consequently the key question about how to assess and accomplish (define,
identify, measure, maintain and improve) the strategic business and IT alignment is still a
great unanswered challenge for many enterprises.

The business- IT alignment has become an important term paper report work that has been
widely investigated by different areas and with different viewpoints. Since the interest in the
business –IT term paper report work has grown it has become important to monitor how it
has been developed and what are the directions of ongoing term paper report within the work.
This paper reports the performing of an extensive systematic literature review whose main
contribution is to provide an overview of the current status of development and possible
further directions for the business –IT alignment term paper report work from the viewpoint
covered by six issues: term paper topics, alignment dimensions, business and IT domains,
term paper goals, types of term paper results and term paper methods.

In this term paper work, three main term paper report questions were formulated: how can the
validity and reliability of an alignment assessment method be improved what are the
dominant topics in the area of alignment and how to facilitate the analysis of the business and
IT governance alignment based on business process simulation and balanced scorecard
methods.

This is a composite term paper report work that includes an introduction and six papers. The
main contributions and results of this term paper report are described and included technical
papers. In papers an alternative organization-wide approach and meta-model for assessing
strategic business and IT alignment are proposed. Two case studies were performed applying
the proposed approach. In paper a prioritized diagram of the most widely accepted strategic
alignment model with the purpose of categorizing the most important topics in the term paper
report area of strategic business and IT alignment is presented. One of the relevant topics that
were identified is governance. In papers, there are presented a business process simulation
approach and a balanced scorecard method in order to facilitate the assessment of the
business and IT governance alignment. An illustrative example of the simulation approach is
presented in an appendix of this term paper report.

This term paper report work aims to improve the decision-making process for business and IT
man-agers at different levels in an enterprise by means of increasing the level of
understanding and knowledge as well as by enhancing existing models and methods for
evaluating strategic business and IT alignment.

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 Table of Contents

Title Page No
CHAPTER- 1
1.1 Introduction 01
1.2 Objectives 02
1.3 Justification Of the study(Why or reason of your work) 03
1.1.3 03
1.2.1 04
1.2.2 04
1.2.3 04
1.2.4 05
1.3 05
1.4.1 06
1.4.2 06
1.4.3 07
1.4.4 07
1.4.5 09
1.4.6 09
1.4.7 09
1.4.8 09
1.4.9 09
1.4.10 09
1.4.11 09
1.4.12 10
1.5.1 10
1.5.2 10
1.5.3 10
1.5.4 11
1.6 11
CHAPTER-2
2.1 13
2.2 13
2.3 13
2.4 13
2.5 14
CHAPTER-3
3.1 PROJECT 16
3.1.1 OBJECTIVES OF THE STUDY 16
3.1.2 THE REPORT HAS SOME BROAD OBJECTIVES: 16
3.1.3 METHODOLOGY OF THE STUDY: 16
3.1.4 TIME LINE 16

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 Chapter-01
Introduction
1.1 Introduction

The business value of Information Technology (BVIT) systems has been, and will be one of
the term paper topics in the field of MIS. The basic foundation strategy that any type of
business should follow is to align Information Technology with business goals. The should
have clear business goals employees its IT system to exactly achieve these goals. The
company can build a state of the art IT system or a website that cost a fortune but if this

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system is not representative of the original business goals, it will not be effective if not
completely useless.
Baina et al. (2008) stated that “Interoperability of enterprise systems can be seen as the
Alignment”. During several years, information technologies have been seen as a
technological means to implement business objectives. However, information and
communication technologies growth implies creation of dedicated teams and departments
working exclusively on the lead of IT projects inside the enterprise. IT strategy intends to
contribute positively to the creation of new business strategies or better support existing
business strategy. This aim is often ensured by prospecting types and range of IT systems and
capabilities potentially available to the organization. Linking business and IT more tightly
offers many benefits, including improved decision-making and corporate agility. In current
times, IT plays an important role in implementing the strategic plans of the companies. It has
become vital for the organizations to provide the services in improved and efficient way.
Business strategy and IT strategy should work in uniformity for the business user to
understand the enterprises' system alignment with business information integration. IT and IS
are very important in the processes of business planning, design, analysis, operations
management, and strategic decision making. Alignment is described as the appropriate and
timely application of IT, in harmony with business objective, strategies, and requirements.
Business and IT alignment occurs when the respective strategies are interwoven in such a
way that the right things are done. And things are done right, to deliver greater value to the
organization. This implies successful alignment is a two way relationship, a give and take
between IT and business. Strategic alignment of IT with business means that the objective of
the IT department of a company should be set in line with the company objectives. Business-
IT alignment refers to applying Information Technology (IT) in an appropriate and timely
way in harmony with business strategies, goals and needs. (Sarhandiet al. 2011)

Instead, many factors play an intermediating or moderating role between the relationship of
IT investments and the business value of IT.This study tries to propose a research model that
assesses the impact of the business-IT alignment on the business value of IT by including two
constructs which measure the IT alignment preconditions and IT alignment processes.
Furthermore, this term paper provides a response and aims to start the discussion on some
remarkable findings in the current IS alignment literature. A better understanding of the
impact of IT alignment on the business value of IT supports managers to address the
importance of IT alignment and makes it easier for IT management to show the business side
of the organization the added value of a good business-IT alignment within the organization.

1.2 Objectives

Any business-IT alignment model or strategy must ultimately pursue one goal—continually optimize
returns to the business from IT investments, including investments in projects, capital, service,
support maintenance, and any other IT effort or expenditure. The key success factor for aligning IT
spending and efforts with business needs is mutual leadership and accountability. Business leaders
must lead IT and CIOs must become business leaders. CIOs certainly need to increase their own
accountability for IT results, but they must also help hold the business accountable for IT as well.
(Growthwave 2010)

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Regardless of its role, every IT activity, project, or service must play a part in creating business value.
Also, an IT agenda must work must work towards achieving business-related and not IT-related
metrics in order to improve alignment. Furthermore, businesses should be aware of their IT resources,
which is something they often neglect to do. This is important because their business’ competitiveness
depends a lot on the quality of their technology resources and whether these resources nimble or
efficient enough to meet changing market needs.

According to Haydamack and Johnson (2008), integrating the strategic planning process into the Intel
IT Management Systems, the overarching activities used to manage the organization (planning,
decision making, and evaluation activities) flow naturally from one step to the next. The two- to five-
year plan is communicated throughout IT to provide an understanding of our environment and enlist
support for the strategic directions.

The Intel strategy aimed at integrating the strategic planning calendar with the Intel corporate
planning cycle, keeping Intel IT activities synchronized with the company’s direction. It consolidates
expertise and ideas from across Intel IT, bringing together a variety of perspectives in an efficient
manner. Responds to changes in the industry by evaluating and adjusting the plan on a regular basis,
helping to ensure it is always up to date.

According to Lochan and Shah (2010), a survey of more than 500 senior executives found that
despite devoting enormous resources and energy trying to align IT investments with their most
important business needs, fewer than one in five felt their efforts were succeeding. Trouble typically
starts when business units hand off their strategy to IT at too high a level. The broad goals are
not concrete enough to be converted into well-informed IT decisions. In response, the
proposals IT develops are defined at too low a level—often as a one-year operating plan
rather than a comprehensive program to reach a strategic destination. Effective alignment can
occur only when IT and business strategy are anchored in clearly articulated business
capabilities. Capabilities are the specific skills needed to achieve competitive leadership.
They are dynamic and give the organization an ability to adapt to changing market
conditions. Supporting business capabilities permits IT to respond flexibly to essential
business needs.

Leading companies follow a five-step process for unlocking IT’s full potential to deliver
business value: 1. Define business imperatives and the capabilities that underpin them, 2.
Identify IT capabilities that support business capabilities and plug gaps, 3. Design the
operations and technology architecture. Rather than develop IT features on demand,
managers need to establish principles to guide IT architecture and the way new features are
built and operated, 4. Develop the IT-strategy roadmap. Aligning IT with business objectives
requires a commitment and a roadmap. Managers must identify key IT investment needs that
will close the alignment gaps, then group them into IT investment themes, and 5. Reallocate
IT spending as business priorities evolve. Periodically, companies need to re-apply a business
lens to IT costs to ensure alignment.

1.3 Justification of the study (Why or reason of your works)

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Information Technology enables business and business drives IT. Globally successful
organizations are those that create one unified team from these seemingly disparate silos.
Business and IT alignment melds knowledge, skills, and resources.

Information Technology is continuing to challenge the way companies organize their

business processes, communicate with customers and potential customers, and deliver their
services. Although there is no single dominant re-organization strategy, common company
structures all lean towards decentralizing IT, shifting it closer to end-users and melding the
knowledge-base to business strategy. Business and IT alignment is vital for market impact
and growth.

This tactic means as business goals pivot, IT can more readily respond with necessary
solutions to support and maintain enterprise momentum. In turn, technological advances and
improvements are hardwired into current and future strategies and initiatives. This continuous
strategic loop means enterprises function better, make more profit, and see better ROI
because they hit their goals with less effort. And while there may be no standard way to align
successfully, an organization where IT and business strategy are in lock-step can improve
agility and operational efficiencies.

In fact, such is the importance of this synergy, successful companies are those that dive
deeper. Amazon and Apple are prime examples—of course technology is integrated and
aligned within their operational structure. In several cases, they created the integral
technology and business strategies themselves. Simply put, business and IT alignment
integrates technology with the strategy, mission, and goals of an organization

1.4 Scope of study

The scope of this research is divided into domain, geographical and time frame.

Domain Scope

In regard to the domain, this study assesses the effect of IT Business Alignment to the
business development in the company.

Geographical Scope

Much depends on the geographical location where the organization will be located. The
organization should be done in a place where all kinds of opportunities are available and
research study can be done on various aspects of the organization.Time Scope: As for the
time, the focus of this research is relatively to 5 years (2013–2018
Chapter-02
Literature Review
2.1 Background Study
There are many conceptualization for the business –IT alignment presented in the literature.
According to Henderson and venkatraman(1993), business-IT alignment refers to strategic fit
and functional integration among four domains: business strategy, IT strategy, business
infrastructure and IT infrastructure. Conforming to Reich and Benbasat (2000), it is the

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degree to which the IT mission, objectives and plans support and are supported by
definitions, history, challenges, phases, measurements approaches the importance of business
industries and contributions of software engineering to business-IT alignment. Previous
literature reviews that have a rather narrows focus on definitions and characteristics of the
business –IT alignment. Like them we also provide an overview of alignment issues in
special dimension and domain but the main concern is verify the coverage of the term paper
issues. Business-IT alignment field using a strictly systematic process of literature riview.
This chapter concentrates on the overview of existing literature review and the explanation of
key words. It focuses on available literature in the field of study by different authors. The
classical theory of concepts, also referred to as the empiricist theory of concepts, the classical
theory of concepts says that concepts have a definitional structure. Adequate definitions of
the kind required by this theory usually take the form of a list of features. Features entailed by
the definition of a concept must be both necessary and sufficient for membership in the class
of things covered by a particular concept. Then this chapter presents the critical review and
research gap identification of the study.

2.2 Literature Review

The idea of IT-business alignment has been expressed using multiple terms such as fit and
integration. This study considers all of these terms as synonymous and views alignment to
convey the idea of jointly coordinating the firm’s activities across IT and non IT domains in
ways that are likely to provide new services, improve business processes and decision making
and increase ultimately the business value of the firm. Furthermore, alignment is not a
questions of being aligned or not being aligned, rather it is how the relationship between IT
and non IT activities need to be altered based on business contingencies.

For over three decades, surveys have consistently ranked the lack of alignment as one of the
top organizational challenges with IT. Consequently many researchers view alignment a
persistent problem. In the quest for addressing IT business alignment, these studies have been
investigating multiple aspects of this relationship including:

What is IT –business alignment how to identify alignment improvement opportunities what

antecedents can explain this outcome what the consequences of the level of alignment
maturity. Nevertheless, the alignment challenge remains, largely because studies of IT –
business alignment have been often too conceptual and lacked good measure.

Chapter-03
Methodology
3.1 Methodology
In order to assess the effectiveness of the IT business alignment the majority of the
research would be conducted through the secondary sources. The impact of the IT business
alignment in the contemporary business environment is a very important subject in the
current environment and there exists a significant amount of term paper report which have

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been conducted in this area. In order to develop the conclusions for this term paper report,
the prior term paper report would be critically analyzed. These term papers have been
developed for various applications of the IT business alignment in the business
environment and they would provide with a significant amount of relevant information.
This termpaper for this study was primary conducted through the secondary sources, where
the information was attained using the various platforms.

3.2 Description of the Methodology

To test the hypotheses, this research performed an extensive psychometric survey among
executives. The data collection and statistical analysis applied in this research follows.

The data used in this study obtained from 1,051 IT and non-IT executives and consultants
from 395 “Global Fortune 1,000” organizations represent 16 different industries. The data
collected covered a 13-year period. Of the 1,051 individual executive responses, 55% came
from IT (CIOs and Chief Technology Officers), and 45% responses came from business
(CEOs, CFOs, COOs, and other business unit executives). The data was collected largely
(80%) via interviews and group discussion. Through the interviews, participants were asked
to rate their organization’s behavior in each of the model’s 41 items using a questionnaire
(see Appendix). The reason for using the questionnaire as an interview guide was/is to ensure
the accuracy and completeness of the responses, especially from executives who might not
always understand the intent of the questions. It also provided the ability to dig deeper into
the executives’ perspective of the opportunities to improve alignment in their organizations.
These interviews were effective at collecting the data (and assigning a 5 point Likert scale)
while also serving as a vehicle to facilitate the discussion necessary to elicit the executives
more candid and complete position on these important factors.

A questionnaire (see Appendix), similar to the questionnaire used as an interview guide, was
used to collect the remaining 20% of the research data. This approach provided a response
rate of greater than 90%. As with the interviews, the survey data used a 5-point Likert scale.
The reasons for using the 5-point Likert scale are: this is the most common universal method
for data collection and easily understood by participants it allows participants to respond in a
degree of agreement or disagreement, rather than take an actual stand on a certain issue the
results are easily quantifiable and thus easy to analyze. Nevertheless, it should be noted that
this scale often constrains participants to the given options and thus, may not identify what
could be described as the true attitude of the respondents; hence, the value of the interview. In
addition, participants may be influenced by their answers to previous questions, or
concentrate their responses on one response column. Last, undesirable social responses are
occasionally compromise. For example, even when the data are anonymized, participants
tend to avoid choosing the “extreme” options on the scale (1 or 5) because of the negative
connotation of being an “extremist”, even if that choice would be the most accurate one. This
research did not analyze differences between the two data collection methods, as this is not the
focus of this study, and the merit of such comparison does not carry much practical significance.

To articulate a valid measurement model, the research conducted a multi-collinearity analysis

between items to demonstrate the distinct role of each of the six dimensions. The research applied
two procedures to assess multicollinearity: (1) Correlation Analysis; and (2) Variance Inflation
Factor (VIF). High correlations between variables hint at substantial collinearity.

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.

Chapter-04
Description of Work

Business Alignment:

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Business alignment is a common way to describe a technology strategy that aims to support
business strategy. The term is commonly criticized as being weak, uninspiring passive
sounding, non-specific, vague and essentially meaningless.

IT Business:

Business it alignment is a process in which a business organization uses information

technology to achieve business objectives typically improved financial performance or
marketplace competitiveness. Some definitions focus more on outcomes (the ability of IT to
produce business value) than means (the harmony between IT and business decision-makers
within the organization). For examples-
Alignment is the capacity to demonstrate a positive relationship between information
technologies and the accepted financial measures of performance.
This alignment is in contrast to what is often experienced in organization: IT and business
professionals unable to bridge the gap between themselves because of differences in
objectives, culture, incentives and a mutual ignorance for the other group’s body of
knowledge. This rift generally results in expensive IT system that do not provide adequate
return on investment.

Steps Of IT Alignment Business:

Digital transformation continues to transform the businesses landscape, affecting business

strategies, operations and the development of products and services. Emmanuel Tita Sama,
Global Account Director, West & Central Africa, Orange Business services, explains the
importance of aligning IT strategies with business operations.

Business IT alignment is an ongoing process, and certainly, one that is worth pursuing in the
modern business environment and remains one of the fundamental challenges of today CIOs.
Every organization operates in an environment that is affected by evolving forces such as the
economy, industry and competitors. Similarly, the knowledge and tools of IT are also
continuously changing and evolving. To maintain differentiation and relevance, businesses
need to adapt in response to their operating environments, or risk losing their competitive
advantage.

Today, there are about 4.9 billion connected objects, and by 2020 it is estimated that there
will be more than 25 billion. It is important to note that IT is not merely about connecting
objects and businesses anymore; IT is treated as an enabler and leader of change that delivers
flexibility and agility that business needs in today’s fast-changing commercial landscape.
In order to create maximum strategic value over time, it is important to achieve alignment
between IT and business strategies. The seven steps outlined below are critical to the
alignment process regardless of organization size, management style or existing perceptions
of IT across the business.

Step 1 – Plan:

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The planning step entails interpreting business objectives into measurable IT services. This
phase assists in closing the gap between what business managers need and expect, and what
IT delivers. IT management can translate service levels into underlying rules and priorities in
a way that measures, tracks and empowers and guides at the same time.

You might start by compiling a list of all the strategic goals of the company from the CEO.
The list should be short, about (3-5 items), below are some examples:
 Increase Revenue and Profit 25% within the next 2 years
 Increase customer based by 10 million new customers by the end of 2018
 Improve brand awareness by 20% with by the end of 2018

Step 2 – Model:

The modelling stage identifies resources needed to deliver IT services at committed service
levels. This step involves mapping IT assets, processes, and resources back to IT services,
then prioritizing and planning resources that support those business-critical services. It may
be worth asking Business Unit leaders to talk about what they want to do to achieve the
business’s strategic goals.

Banks in Africa, for example, are looking to accelerate their pace of growth and development
– by thinking big, acting big and delivering big. The question becomes: do they want more
branches, more Apps, more ATMs or more smartphones to reach out to the mass market.
Traditional banking models are fast becoming obsolete as there is clear move from “Brick
and Mortar” to “Click and Mortar”. Branches are being closed and branch managers are now
moving to play a relationship management role while some are moving to the back office

The bottom line in measuring the success of alignment is the degree to which IT is working
on the things that business managers care about. This means that IT must have processes in
place for prioritizing projects, tasks, and support. Cooperation and teamwork is extremely
important in this stage to achieve the overall business agenda.

Step 3 - Create IT Vision:

We know our business needs, how can IT help? This step identifies the IT help capability
strategy, process, infrastructure and organization –required to meet business priorities. The
starting point a vision for IT. This vision lays the general guidelines or policy that drive the
creation of this IT capability. Remember two people might react differently to the same
requirements depending on their underlying beliefs. It is very important to articulate these

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underlying attitudes and beliefs into a vision before attempting to answer the IT capability
questions.

Step 4 – Assess Current Alignment:

This step answers the questions: How does the current IT capability compare to the
envisioned IT capability. There are three dimensions of alignment – investment, asset and
organization. By answering this question for all three, this step assesses the alignment along
these three dimensions.

Step 5 – Evaluate Implementation:

The evaluation step is a critical phase to ensuring success. Very often, organizations under-
plan for implementation and pay the price in terms of over budget, delayed or failed projects.
Step 3 takes the list of initiatives and creates a roadmap for IT, as a result of careful planning
driven by one primary consideration. Business managers and leaders can brainstorm the
hidden opportunities that will help IT to build solutions that will directly or indirectly help
accomplish the strategic goals identified for the business. The next stage is then to work to
identify multi-faceted opportunities that are not currently pursued.
For example, in this phase, banks would be looking to think big in their digitalization strategy
and evaluate an approach that captures opportunities that are derived from mass market
adoptions and that, typically, accelerate financial inclusion. One strategy to achieve this is to
partner with big ICT players with the necessary experience in complex ICT solutions delivery
to ensure the maximum value is understood and delivered, and that is fully aligned with their
business.

Step 6 – Manage:

The management step enables the IT staff to deliver on agreed levels of service. A single
location for submission of all service requests is essential, as is prioritization of those
requests based on pre-defined business priorities. One can priorities and select the best ideas
by ranking them according to projected returns They can also carry out the proper assessment
of the tangible and intangible benefits, to avoid ending up with tactical projects rather than
strategic projects. Also, businesses will need to pick top three benefits based on IRR from the
list and figure out which ones will be resourced.

For example, Merck prioritized and signed a contract with Orange Business Services to
deploy a 200-site, next-generation network that will support its digital transformation
initiatives. Orange Business redesigned Merck’s global network and incorporated
optimization technologies delivered via Enterprise Application Management Riverbed. It uses
Riverbed’s Steel Head CX to enhance the performance of all applications, including on-
premise, cloud and across multiple networks (MPLS, private VPN and public Internet).

Step 7 – Measure:

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Taking steps to define and implement measurement improves cross organization visibility of
operations and service level commitments. Traditional IT management tools operate in
functional silos that confine data collection and operational metrics to focused areas of
functionality. They typically relate more to technology than to business objectives.
Businesses can plan for and institute a serious post project Audit Policy and define
measurement matrices to determine if the set objectives were actually met. They can also be
accountable and showcase how business success is achieved.

Reporting on the benefits and aligning on IT governance increases accountability. An audit

process will also help the organization adjust the plan midway if expected results are in
question. This helps IT articulate value to the business and can achieve agreement on
necessary funding for new projects. Outside of a business context, isolated functional groups
can’t get a holistic view of IT services that support business objectives.
By committing to and integrating these steps businesses can deliver can find a common
ground for advancing towards overall business and IT alignment to support strategic
ambitions.
Business–IT alignment integrates the information technology to the strategy, mission, and
goals of the organization. Key characteristics in order to achieve this alignment are:
The organization must view information technology as an instrument to transform the
business. This includes exploring other revenue streams and integrating other facets of their
business into each other. For example, using one central data warehouse to combine two
separate, but partnering businesses.
An organization must hold customer service, both externally and internally, at the utmost
importance. Communication between the organization and their customers must not be lost.
An organization must rotate both IT and business professionals across different departments
and job functions. They must have the knowledge and experience of both sides of the
business so that understanding and communication is achieved. Once those three
characteristics are achieved,
An organization must provide clear and specific goals to both the IT and business employees.
This will create the integration of both entities to achieve a common goal.
Ensure that IT and business employees understand how the company makes or loses money.
This is important so that money is not carelessly poured into the IT department and there is
no return on that investment.
Organizations must create a vibrant and inclusive company culture. There must not only be
informational unity, but a company as whole.
It is not unusual for business and IT professionals within an organization to experience
conflict and in-fighting as lack of mutual understanding and the failure to produce desired
results leads to blaming and mistrust. The search for B/I alignment often includes efforts to
establish trust between these two groups and a mechanism for consensus decision.

Types of Business Alignment:

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Business-IT alignment research field to discover what types of alignment need to be covered
the papers can be classified in one or more of the following dimensions:

 Strategic: the papers address mainly issues related to goals, plans, objectives, strategies,
prioritization, investments, governance, projects, quality and performance;
 Structural: the papers address mainly issues related to organizational structure, IS
applications and IT infrastructure;
 Social: the papers address mainly issues related to communication, involvement,
interaction and collaboration;
 Cultural: the papers address mainly issues related to styles, behaviour, values and
beliefs.
Business-IT alignment research field. Based on the definition for the business-IT alignment
by the papers can be classified in one or more of the following domains:

 Business strategy: the paper addresses mainly issues related to business scope, business
governance and business competences.
 IT strategy: the paper addresses mainly issues related to technology scope, IT
governance and systemic competences.
 Business structure: the paper addresses mainly issues related to administrative structure,
organizational process and skills.
 IT structure: the paper addresses mainly issues related to IT architecture, IT process and
skills.

Business-IT alignment research goals. An analysis along these goals allows the
determination of where most/least of the research interest lies. Based on the classification
presented by the papers can be classified in one of the following research goals:
 Understanding: the paper investigates business-IT alignment issues, without proposing a
solution approach.
 Proposal: the paper describes a proposal or approach for addressing business-IT
alignment issues.
 Evaluation: the paper applies an existing approach for addressing business-IT alignment
issues in the organizations,
 Improvement: the paper examines how to improve or extend an existing approach for
addressing business-IT alignment issues.

Business-IT alignment research, assessing the state of the field. The papers can be classified
according to one or more of the following types of outcomes:
 Knowledge: the papers provide intangible results related to knowledge, for example,
theoretical definitions, information collected by questionnaires and results of the
evaluating business-IT alignment in the organizations.

 Model: the paper provides a model as result, that is, a set of characteristics, and of
relationships between them, which provides a framework for specifying and evaluating
requirements of business-IT alignment.

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 Method: the paper provides a method as result, that is, a finite sequence of instructions
used to address deficiencies in models and business-IT alignment issues. Methodology,
technique, process, guidelines and strategy are considered as method in our SLR.

 Tool: the paper provides a tool as result, that is, an instrumental item that gives automatic
support to the evaluation or assurance of business-IT alignment considering different
methods.

Business-IT alignment research area and thereby evaluate the extension of the scientific
validation of their results. The papers can be classified in one of the following research
methods:
 Literature review: the paper describes a literature review, that is, a non-empirical
method that consists of the review of prior research to propose general solutions.

 Speculation: the paper describes a proposal or approach for addressing business IT

alignment issues without presenting any study or example that would indicate the
feasibility of the proposal and the usefulness of the research results in practice

 Example: the paper describes a proposal or approach for addressing business IT

alignment

Chapter-05
Conclusion

5.1 Conclusion

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 Business-IT strategic alignment is one of the most popular modern management concepts in
business and IT management particularly in academia and industry. It refers to the degree of
congruence between business and IT strategies. In today’s turbulent and competitive
business environment, survival not even success has become a major challenge. The basic
foundation strategy that any type of business should have is to align Information Technology
(IT) with business goals. The company should have clear business goals and employs its IT
system to exactly achieve these goals. IT and IS are very important in the processes of
business planning, design, analysis, operations management, and strategic decision making.
Alignment is described as the appropriate and timely application of IT, in harmony with
business objective, strategies, and requirements. Business and IT alignment occurs when the
respective strategies are interwoven in such a way that the right things are done. Any
business-IT alignment model or strategy must ultimately pursue one goal—continually
optimize returns to the business from IT investments, including investments in projects,
capital, service, support, maintenance, and any other IT effort or expenditure. The key
success factor for aligning IT spending and efforts with business needs is mutual leadership
and accountability. Regardless of its role, every IT activity, project, or service must play a
part in creating business value. Also, an IT agenda must work must work towards achieving
business-related and not IT-related metrics in order to improve alignment. Furthermore,
businesses should be aware of their IT resources, which is something they often neglect to
do. Fenwick (2012) advised to think beyond alignment and create a business strategy based
on technology. In order to do that, he suggested a framework that involves several steps: 1.
Tackle Goals And Objectives First, 2. Model Business Differentiators, 3. Feed Strategy
Discussions With Data-Driven Insights, 4. Develop Multiple Business Technology
Strategies, 5. Develop A Living Technology Road Map, 6. Create IT To Support The BT
Strategic Plans.

The paper reviewed leading theoretical models about alignment of IT with business strategy
including the strategic alignment model (Venkatraman et al. 1999), the Alignment Maturity
Criteria Model (Luftman J. N 2000), the Business Technology Optimization Model (HP
Corporation 2010). This paper also reviewed the 2002 McLean and DeLone Information
Systems Success Model. After reviewing all the above models about alignment of IT with
business objectives and integrating the well-established DeLone and McLean information
systems success model, we introduced a new theoretical framework for IT/business alignment
(Figure 5). This new model assumes that the organization’s business infrastructure and IT
infrastructure will affect each other and will affect the business strategy and the IT strategy.
Both the business strategy and the IT strategy will affect the actual IT system implemented in
the organization as well as the service quality of that system and the information quality
produced by that system (which is the basis for decision making). System quality,
information quality and service quality will affect the behavioral/intention to use the system
as well as the user satisfaction with the system. These two will affect the actual use of the
system, which will affect the net business benefits/objectives.

5.2. Findings and Recommendations

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Summaries of the interviews are attached in appendix. In this section, the findings of the
interviews are described for all four hypotheses. The process of implementing and integrating
an international operating SAP platform is complex. Business needs differ across country and
often change over time. In this specific project it is of major importance that the dedicated IT
and business staff have a certain level of mutual recognition. For example, when a business
manager wants a specific change in the SAP platform to obtain new of adapted financial
reports, he or she must have a general understanding whether the IT capabilities are available
to complete his request. The other way around, IT staff should understand why the business
wants the request in order to make the right valuation. In this setting the interviewees
commented on the implications of the business-IT alignment.

The findings of the thesis propose a number of recommendations for business and IT
managers of the participating financial organization and other managers interested in
understanding the business-IT alignment and its impact on the business value of IT.

First, business and IT staff at the local level value the business value of IT more in terms of
functionality, whereas the central unit uses cost saving measures to assess business value of
IT. Hence, managers should be aware of the different views, as business and IT staff do not
use cost saving measures, as they often do not see the global impact of improvements of a
SAP platform.

Second, managers should be aware of the difference between business needs at the local level
and business needs at the central level. Where, IT staff at the local level works very close
with the local business, the business staff at the central level is more reactive and is not really
committed to IT plans and initiatives.

5.3. Limitations

This thesis is subject to some important limitation.

First, the case study was done at one organization. Organizations differ in organizational
structure, business model and culture amongst others. First, organizations with a flat
organization structure would have resulted in a whole different scenario than an organization
with hierarchical organizational structure. Hence, emphasis should be put on all the
participating employees, whereas in a hierarchical organizational structure there is generally
more emphasis on one group of employees, which are the decision makers. Next, business
models of organization often vary also within the same industry. For example, the business
model of commercial banks is entirely different than the hotel industry. Furthermore, within
the hotel industry there are companies which are also the owners of the hotels. At the last, a
different company culture might impact the business-IT alignment. The way in which
business and IT staff, at different organizational layers relate to each varies across
organizations.

Second, the SAP platform in this thesis is tailored to the company’s structure and needs.
Hence, the implications of this thesis cannot be seen as a blue print for different SAP

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platform. Moreover, the implications of this thesis should not exceed the SAP environment of
this organization, as it is merely a component of the larger and complex organization. Hence,
the thesis findings should not be used to make an assessment of the organization wide
business-IT alignment. Indings should not be used to make an assessment of the organization
wide business-IT alignment.

Third, the results of the questionnaire depend on the interpretation of the interviewee.
Different interpretations between interviewees can lead to misguided questionnaire results.
This impact is mitigated by the interviewer and the second reader of the participating
financial organization by always providing explanation to the interviewee when needed.

Fourth, taking the role of the outside observer in the case study also has its drawbacks. The
researcher is fully depended on the interview results of the four employees of the
participating financial organization. There is no guarantee that these interview findings will
correspond with the global view on the business-IT alignment and business value of IT in the
participating financial organization.

At last, one should be careful for using the descriptive statistics of the questionnaire as
statistical evidence for different hypotheses in the research model. They are an indication of
the satisfaction gaps of business and IT staff, but by no means provide strong evidence for the
four hypotheses in the research model

References:
1. https://www.itnewsafrica.com
2. Bird, M.(2010). Modern Management Guide to Information Technology. Archived from
original on 2010-10-14. Retrieved 2010-08-29.
3. IT Governance [ISACA. Retrieved] 2019-04-11.
4. https://cioindex.com

5. Al-Mashsari, M., Zairi and M., Creating a Fit Between BPR and IT Infrastructure: A
Proposed Framework for Effective Implementation, The International Journal of Flexible
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6. Andersson, J. (2002), Enterprise Information Systems Management: An Engineering
Perspective on the Aspects of Time and Modifiability, Ph.D. Thesis, Royal Institute of
Technology (KTH), 2002.
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