to the business dynamics and complexities, aligning information systems to the
organizational strategy has appeared to be a concern for researchers and
practitioners over the last decade; and in recent years, with the rapid
development in technologies, the role of information system(IS) playing in the
corporate strategy is getting more and more significant and not ignorable;
combined with the increasingly competitive business environment, achieving this alignment becomes even more
demanding and critical day after day. However, the challenge is getting more
and more severe at the same time. Therefore, in this paper, a thorough analyse
and discussion about the need of alignment between IS and corporate strategies in IS planning phrase will be made, then the paper
reviewed and discussed one alignment model to
deliver a comprehensive understanding of the alignment concept and various
alignment in an organization, with the focus on alignment between IS and
corporate strategy; furthermore, based on the alignment model, the paper summarized
what top management or CIOs should do to make this alignment better applied
into the management
concept, so that the IS can fully realize its function in corporate
Words: Information system, IS planning,
corporate strategy, alignment, technology development, management,
In modern turbulent and competitive business environment, the
major challenge for an organization is no longer success, but survival; on the
one hand, corporate strategies have become the most vital one above all other
factors, which can save or either ruin an organization over night; on the other
hand, IS has developed to be not neglected for a business to survive and
paper starts with the important position of information systems in an
organization, then elaborated the definition of alignment, followed by deeply discussing
the necessity and significance of aligning IT with business objective corporate
strategies; afterwards, this paper reviewed an popular alignment model,
proposed by Pijpers V, to help
understand comprehensively the alignment concept and various alignments in an
organization, focusing on alignment between IS and corporate strategy; furthermore, based on
the alignment model, the paper summarized what top management or CIOs
should do to make this alignment better applied into the management concept, so
that the IS can fully realize its function in corporate strategy.
corporate strategy and information systems
Corporate strategy, as defined in business dictionary, is
the overall scope and direction of a corporation and the way in which its
various business operations work together to achieve particular goals.
Michael E. Raynor ever explained corporate strategy with 2
parts (Raynor, 2007): (1) capturing inter-divisional synergies; and (2)
how the organization identifies and manages strategic uncertainty
“Information systems, as Laudon
& Traver ever elaborated in the article, are technological components
in an organization, which are interconnected and work together to gather,
process, store, and disseminate information to support decision making,
coordination, control, analysis, and visualization in an organization.” (Laudon
& Traver, 2012)
These two seemingly unconnected terms have presented us
their tight relationship during last 2 decades in this agile business world,
people has become increasingly realized the significant function that IS plays
in corporate strategy and decision making; later in this paper, the link
between IS and corporate strategy will be explained and further studied to make
the connection massively contribute to business.
Numerous definitions of alignment can be found in the literature,
and as early as in 1993, Henderson and
Venkatraman were among the first to introduce this term for business, and they (Henderson
& Venkatraman, 1993) described alignment as the degree of fit
and integration among the following four components: business and strategy,
business and IS infrastructure
According to Ola (El-Telbanya & Elragalb, 2014),
the term alignment was defined as the extent to which information systems
support and have a positive relationship with the organization’s objectives and
strategies as defined in the business plan in an appropriate and timely way
In an easy way to explain alignment,
that is application of information systems should be in harmony with business strategies, while
this alignment is not only i
Role of Information systems in an
With the rapid development of technologies, information
systems has developed into powerful technological tools which can collect,
process, store, and disseminate information from a simply data depository in
the very beginning; information system has come to play a crucial role in supporting
decision making, coordination, control, analysis, and visualization in an
organization, which largely affects the sustainability and growth of
Information systems, as Arwa said in his article (Altameem, et al., 2014), have interposed into almost all
daily work: meeting, communication, information gathering, reporting etc, to
help corporate operate activities and functions properly, accurately,
effectively and timely in the means of software, he also
said information systems have become a source of competitive advantage, it is of great benefits in making right
decisions, improving productivity and performance, creating new ways of
managing and organizing, and developing new business,
Jos (Trienekens, et al., 2014) also expressed
the overwhelming importance of information system in an organization: IS has
become the backbone in almost every industry, for instance education, finance,
government, health care, manufacturing, and almost all large and small
businesses, organisations that have successfully applied IS and used them in
the right way outperform organisations without IS.
Ahmed ever stated in his article (Elmorshidy, 2013):
information systems, as a effective technological tool to implement
business goals, contribute positively to the creation of new business
strategies or better support existing business strategy.
As above, a lot articles have mentioned the vital role of
information system in an organization,
however, seldom researchers talked about information system without
emphasizing the importance of alignment between the information system and
corporate objectives, requirements and strategies.
Arwa (Altameem, et al., 2014) emphasized
the alignment like this: the usage of modern information technologies in the
organization management will be successful only when information system
development is aligned with the organization system development strategy.
et al., 2014) also highlighted that IT projects should be tightly
connected with business side so as to achieve organization goals and realize
corporate values, and the way to manage and improve the link is alignment of IT
and business strategies.
Business strategy and IS should work in uniformity for the
business user to understand the enterprises’ system alignment with business
information integration. (Sarhandi, et al., 2011)
Over the last decade we have seen an increase in recognition
of IT and the more integrated role IT has begun to play in the strategy of
organizations, more and more researchers and practitioners are pursuing the
effective alignment between IS and corporate strategies.
Importance of aligning IS with
At the end of 20th century, some people had
already realized the importance of aligning IS with corporate strategy, as early as in 1991, Das (Das,
et al., 1991) ever stated in his article that alignment is
crucial because it assists organizations in ensuring that the areas which are
needed for improved organizational performance are targeted by information
Teo and King (1997) also pointed that alignment ensures that
IS planning and business planning activities are in sync in order to ensure
seamless integration so that organizational goals and objectives can be
achieved. (Teo & King, 1997)
After 2 decades practice, more and more people now are
getting realized the significance of aligning the IS and corporate strategies
in improving organization performance, accomplishing the business objectives
and corporate value.
David Cotgreave said when IS and business strategy are
aligned and interwoven, IS cannot only make great contribution in driving
growth, accelerating market share, improving productivity and efficiency,
But also help corporations reduce risks when facing
turbulent and dynamic business world, when IT really understands the
business strategy, the value it adds is way beyond the capability of ANY other
with aligned IT feel dynamic and agile, they feel current, connected and one
step ahead of their own needs. Meanwhile, the ones who have not aligned the two
are increasingly getting left behind. (Cotgreave,
Trienekens expressed the same opinion in his article, the proper alignment can make sure the
return value from IT investment be maximised, and it provide management the
correct guidance and great flexibility to react to changes, , through this
alignment, organization can gain a better competitive position. (Trienekens,
et al., 2014)
Aligning the two key perspectives in an organization provide
a chance for business management to better understand IS, so that CEOs can
apply the right system to organization,
and make better use of these systems when forecast trend and make decisions; and
at the same time, alignment enhance the understanding of business strategies
and objectives by CIOs or IS managers, in order that IT activities can work for
business goals, and be powerful support in making business strategies.
IS now is a source of competitive
advantage, and the alignment can largely enhance the strategic role of IS, so this expanding role has forced strategic
systems planners and IS planners to change the scope, objectives, style and
sources of expertise in planning. (Altameem, et al., 2014)
is important to take into consideration of this tight linking during IS
planning phases, so that the alignment
can be sustained during the whole
lifecycle. Many researchers have studied
the alignment and worked out models for people to better understand and apply the
alignment in practice.
Alignment model and framework
One model introduced by V. Pijipers is selected for us to
better understand the concept and learn how to align the IS with corporate
strategies. (Pijpers, et al., 2008)
Alignment model by Pijpers, V; Gordijn, J;
In V. Pijipers’s model, there are four different perspective,
which are all essential for an organization: (1)the corporate Strategy perspective, (2) the Value
Creation perspective, (3)the Processes perspective, (4) the IS perspective. The framework of alignments
present us a comprehensive vision of the alignments among the four
perspectives, which could help management level understand the holistic
situation, and then know what to do from strategic level. As known that in a
system each perspective should be properly aligned with
the others, but two perspectives
were of most interest and considered most relevant: the business strategy
perspective and the IS perspective, since the stakeholders sought an IS design which “matched” their
business strategy. So the focus of this part is aligning the organization’s
strategy and IS.
As many business ideas stem from technological innovations,
so the development of information system
serves as the starting point of this frame; however before actually
implementing information systems it must be understood – on a high level – what
the system will do and how this will impact the organization. and to do this managers
or CIOs should have a clear understanding of corporate strategies, according to
the model, information systems lay the foundation of business, and IT serves as
the source of strategies; thus, this is vital, because any mistake made in the early phases of information
system design can have large consequences later on, Therefore, it should be the biggest concern of top management
and managers how to align the IS and corporate strategies in IS planning phase.
As seen from the model, information system have interactions
with all other 3 perspective, the information from IS delivering to the other 2
perspectives should be in accordance with strategies,
What management and CIOs should do to
contribute to this alignment
It has been widely recognised the importance of IS and the alignment
between IS and business strategies; as a manager or CIO, they should understand the significant role that IS
plays in an organization; IT leaders must
have the ability to work with people in the business to make the alignment a
reality(CIO Executive Council, 2009); and to fully understand
information systems, a managers must understand the broader organisation,
management, information systems dimensions of systems and their power to
provide solutions to challenges and problems in the business environment (Issa-Salwe, 2011), which also can be seen
form the above model.
In a more detailed way, CIOs must make sure that every IT
activity, project, or service play a part in realizing business goals, and IT
agenda work towards achieving business-related and not IT-related metrics in
order to improve alignment; and on the other hand, businesses should be aware
of their IT resources, which is something they often neglect to do, 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, as top management, they are responsible for this
Growthwave expressed the same opinion in: 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.
According a survey of
more than 500 senior executives (Lochan & Shah, 2010), it was found
that in spite of massive resources and energy devoting in aligning information
systems with corporate strategy and business requirements, fewer than one in
five felt their efforts were achieving good results. 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
Effective alignment can occur only when IT and business
strategy are fastened in clearly articulated business capabilities, while this
can be ensured during IS planning phase, in the model, it is also highlighted
the significance of the proper IS planning before implementation about proper
alignment of IS and corporate strategies during planning phase.
Another point that shouldn’t be neglected by management and
CIOs is continuous
communication and close partnerships between IS and business managers, because
this ensures that the parties understand each other’s goals and objectives, and
can recognize challenges in each other’s field of expertise; and to guarantee
the communication, they can establish formal communication structures that are
created and maintained between the business and the IS units; through this
continuous effort, it can make sure the corporate strategy are carried out by
IS throughout their lifecycle, can find any mistake to change accordingly in a timely way. (Kekwaletswe & Mathebula, 2014)
ever mentioned a five-step process for unlocking IT’s full potential to deliver
business value, which many leading companies are using: 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.
Technologies development has made information systems a must
in an organization, they are no longer just tools that can collect, process,
store, and disseminate information, IS are playing unneglected role in the
process of business planning, design,
analysis, operation management and strategic decision making. Alignment of IS
and corporate strategy make sure that the application of information systems
are in harmony with business objectives, strategies and requirements, in order
to massively realize the function and effect of IS, and to make IS better work
IS and corporate strategic alignment has been one of the
most popular modern management concepts in business and IT management
particularly in academia and industry, any 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 main factor for the
success of the alignment, except the information system itself, is the people:
how the practitioner view the situation, whether they have the vision and
knowledge to manage the alignment, and how they show the leadership and
accountability; the people should not only be executives, but also CIOs and
This paper elaborated the importance of information system
in organization, and then re-emphasized the significance of aligning IS and
corporate strategies in IS planning, followed by the study of one alignment
framework proposed by V. Pijipers to assist management understand the necessity
of this alignment and gain some ideas on how to obtain the alignment; then
suggestions were made on what management and CIOs should do to pursue the
alignment between IS and corporate strategy and potentially maximize the
benefits of this alignment.
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