This chapter provides the background to why there is a general lack of strategic application of IT among SMEs. It explains how the concept of strategic alignment can be applied to enhance the competitive capability of firms in the context of Porter’s generic strategies. A brief account of Singapore’s 10-year plan for the development of the SME sector forms the basis of emphasizing the need for a strategic use of IT to help SMEs meet new challenges in the knowledge-based economy. This is followed by a brief account of the national IT plan for Singapore’s construction industry known in short as CORENET. The case of a successful implementation of CORENET is illustrated by the electronic building plans submission system. Next in the chapter, focuses on presenting a study of the state of business and IT alignment in Singapore’s construction industry conducted at the firm level. The purpose of the study, as well as its objectives, is to explain the key rationale and directions. From the World Bank’s International Finance Corporation’s classification of SMEs, three classes of SMEs have been used in the study, namely, micro enterprises, small enterprises, and medium enterprises. The chapter describes the methodology designed for the collection of data which covers the source of the questionnaire, sampling approach, reclassification of survey questions, and statistical techniques of analyzing the data. The results of the survey are presented by type of SMEs, namely, designer-SMEs and builder-SMEs, and they relate to the types of software used, extent of use of the Internet, forms of IT strategy, use of developed Singapore Standards relevant to IT, benefits gained from adopting industry IT projects, important reasons for making decisions about IT investments, and advantages and disadvantages of applying IT. The results obtained are mapped onto the four dominant alignment perspectives of the Strategic Alignment Model (SAM) to evaluate the goodness-of-fit (or goodness-of-alignment) of the designer-SMEs and builder-SMEs in four different perspectives – strategy execution, technology potential, competitive potential, and service level. The main findings are discussed in relation to the practices of micro and small enterprises, including those of medium enterprises to reveal the alignment perspectives favored by this group of SMEs for both designers and builders. Appropriate recommendations at the policy level are made to address the main issues facing SMEs in the construction industry that have resulted in the lack of use of IT. The chapter concludes with a summary of the main points covered on the state of business and IT alignment in the Singapore construction industry.
The relationship between it outsourcing and business and it alignment: An explorative study