Aligning Information Technology and Business: The Differential Effects of Alignment During Investment Planning, Delivery, and Change

2020 ◽  
Vol 31 (4) ◽  
pp. 1260-1281
Author(s):  
Terence J. V. Saldanha ◽  
Dongwon Lee ◽  
Sunil Mithas
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Positive Relationship ◽  
Early Stage ◽  
Digital Transformation ◽  
Archival Data ◽  
Investment Planning ◽  
It Investment ◽  
Business Alignment ◽  
Low Levels

Digital transformations often require firms to align and synchronize their information technology (IT) and business initiatives. In this context, one important question that managers face is where they should focus most when aligning IT and business for leveraging IT investment for firm performance. Authors argue that firms that focus on IT–business alignment at the later stages (i.e., IT delivery and IT change) are better able to translate their IT investment into revenue than firms that focus on IT–business alignment at the early stage (i.e., IT investment planning) of the IT lifecycle. They use archival data from more than 120 firms in India and find that the positive relationship between IT investment and firm revenue is stronger for firms that focus on IT delivery–business alignment or IT change–business alignment than for firms that focus on IT investment planning–business alignment. In addition, they find that at higher levels of IT investment, firms that focus on IT change–business alignment or IT delivery–business alignment have higher revenue than firms that focus on IT investment planning–business alignment, whereas at low levels of IT investment, firms that focus on IT investment planning–business alignment outperform firms that focus on IT delivery–business alignment or IT change–business alignment. Taken together, these findings can help managers to improve the success of their digital transformation efforts by tailoring their alignment efforts across planning, delivery, and change stages.

Making an Impact Through Information Technology

2021 ◽  
Vol 3 (2) ◽  
pp. 14-23
Author(s):  
Mostafa Sayyadi Ghasabeh
Keyword(s):  
Information Technology ◽  
Transformational Leadership ◽  
Knowledge Management ◽  
Firm Performance ◽  
Positive Relationship ◽  
Review Of The Literature ◽  
Mediating Role ◽  
The Relationship ◽  
Role Of Information

This research contributes to the fields of knowledge management, transformational leadership, as well as information technology. This article presents the theoretical underpinnings of the framework together with a thorough review of the literature. This research indicates that there is a positive relationship between transformational leadership, knowledge management, and firm performance. The synthesis of the literature also lends support for the mediating role of information technology in the relationship between transformational leadership and knowledge management.

Real Options Analysis in Strategic Information Technology Adoption

2011 ◽  
pp. 3199-3204
Author(s):  
Xiaotong Li
Keyword(s):  
Information Technology ◽  
Technology Adoption ◽  
Real Options ◽  
Real World ◽  
Investment Decision ◽  
Investment Planning ◽  
It Investment ◽  
Real Options Theory ◽  
The Real ◽  
Options Theory

Many information resource managers have learned to be proactive in today’s highly competitive business environment. However, limited financial resources and many uncertainties require them to maximize their shareholders’ equity while controlling the risks incurred at an acceptable level. As the unprecedented development in information technology continuously produces great opportunities that are usually associated with significant uncertainties, technology adoption and planning become more and more crucial to companies in the information era. In this study, we attempt to evaluate IT investment opportunities from a new perspective, namely, the real options theory. Its advantage over other capital budgeting methods like static discounted cash flow analysis has been widely recognized in analyzing the strategic investment decision under uncertainties (Amram & Kulatilaka, 1999; Luehrman, 1998a, 1998b). Smith and McCardle (1998, 1999) further show that option pricing approach can be integrated into standard decision analysis framework to get the best of the both worlds. In fact, some previous IS researches have recognized the fact that many IT investment projects in the uncertain world possess some option-like characteristics (Clemsons, 1991; Dos Santos, 1991; Kumar, 1996). Recently, Benaroth and Kauffman (1999) and Taudes, Feurstein and Mild (2000) have applied the real options theory to real-world business cases and evaluated this approach’s merits as a tool for IT investment planning. As all real options models inevitably depend on some specific assumptions, their appropriateness should be scrutinized under different scenarios. This study aims to provide a framework that will help IS researchers to better understand the real options models and to apply them more rigorously in IT investment evaluation. As the technology changes, the basic economic principles underlying the real options theory do not change. We do need to integrate the IT dimension into the real options based investment decision-making process. Using electronic brokerage’s investment decision in wireless technology as a real-world example, we show the importance of adopting appropriate real options models in IT investment planning. By specifically focusing on the uncertainties caused by IT innovation and competition, our study also gives some intriguing results about the dynamics between IT adoption and the technology standard setting process.

Assessing the Value of Information Technology Investment to Firm Performance

2002 ◽  
pp. 257-278
Author(s):  
Qing Hu ◽  
Robert T. Plant
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Financial Performance ◽  
Capital Investment ◽  
Large Scale ◽  
Performance Data ◽  
It Investment ◽  
Firm Level ◽  
It Investments ◽  
And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

scholarly journals Analisis Tata Kelola Dan Perencanaan Investasi Teknologi Informasi Dengan Metode Cobit Dan Val It

2019 ◽  
Vol 5 (1) ◽  
pp. 105-112
Author(s):  
Yayan Hendrian
Keyword(s):  
Information Technology ◽  
Portfolio Management ◽  
Business Strategy ◽  
Technology Development ◽  
It Governance ◽  
Development Project ◽  
Investment Planning ◽  
Maturity Level ◽  
It Investment ◽  
Technology Governance

Abstract  - IT Governance and the development of appropriate information technology, aligned with business strategy and in accordance with the target is a priority, but often development projects are not expected to match the even, there are many information technology development project  failure or canceled  in the middle of the road. That's because information technology governance and IT investment planning are not good. It is necessary to analysis  IT  governenace and  planning of  IT investment. The selected sample is PT. Candi Malindo Bangkit with five (5) respondents involved. Tools in this study using the COBIT  framework  for data  and  opinions about IT governance and Val IT  for  IT  investment  planning. The  selected  domain from the COBIT  framework are  DS4 (continuous service),  DS5 (information system security) and  DS11 (data management), and  the domain of Val IT are Value Governance (VG), Portfolio Management (PM) and Investment Management (IM) . Then based  on  the analysis can be known maturity level of IT governance and IT investment  planning. The analysis shows  that  the current  PT. Candi Malindo Bangkit still at maturity level 1 (one) or at the level of the initial/Adhoc which means IT governance and IT investment planning has been no standardization  process, yet organized  and  implemented  based  on  the  needs  of  a  sudden.Keywords: Audit, IT  Governance,  COBIT,  Val IT

Strategic and Business-IT Alignment Under Digital Transformation

2021 ◽  
pp. 1737-1749
Author(s):  
Nabyla Daidj
Keyword(s):  
Early Stage ◽  
Digital Transformation ◽  
It Alignment ◽  
Strategic Fit ◽  
Business Alignment ◽  
Business It Alignment

Digital transformation is at a very early stage. Digital transformation has several impacts on business, on organization and process and raises several questions. Over the years, the aims of strategic fit and IT-business alignment have remained constant but the environment in which companies operate has changed significantly becoming more dynamic, very competitive and global. This chapter attempts to analyse how the digital transformation could affect more specifically strategic and IT-business alignment.

Social Learning in Information Technology Investment: The Role of Board Interlocks

2020 ◽  
Author(s):  
Zhuo (June) Cheng ◽  
Arun Rai ◽  
Feng Tian ◽  
Sean Xin Xu
Keyword(s):  
Information Technology ◽  
Social Learning ◽  
Positive Relationship ◽  
Large Data ◽  
Corporate Boards ◽  
It Investment ◽  
Data Set ◽  
It Investments ◽  
Board Interlocks ◽  
Focal Firm

We use a social learning perspective to extend our understanding of information technology (IT) investment and return. Specifically, we investigate social learning in the context of interlocks between corporate boards, which allow firms to share knowledge and experiences with respect to their IT investments. Using a large data set of firm-years from 2001–2008, we find (a) a positive relationship exists between a focal firm’s IT investment and that of its interlocked firms; (b) this positive relationship is amplified by the interlocked firms’ IT capability but only if the focal firm has an active board, which devotes time to allow sufficient communication among directors; and (c) the component of the focal firm’s IT investment that is attributable to board interlock influence is positively related to the firm’s performance but only if the firm has an active board. Collectively, these findings support our central thesis: social learning through board interlocks can play a significant role in influencing a firm’s IT investments and enhancing their payoff. That said, attaining such benefits requires boards to incorporate those firms with high IT management capability and to strengthen board activity so interlocked members can substantively share their knowledge and experiences with IT investments. This paper was accepted by Anandhi Bharadwaj, information systems.

Strategic and Business-IT Alignment Under Digital Transformation

2019 ◽  
pp. 93-105
Author(s):  
Nabyla Daidj
Keyword(s):  
Early Stage ◽  
Digital Transformation ◽  
It Alignment ◽  
Strategic Fit ◽  
Business Alignment ◽  
Business It Alignment

Digital transformation is at a very early stage. Digital transformation has several impacts on business, on organization and process and raises several questions. Over the years, the aims of strategic fit and IT-business alignment have remained constant but the environment in which companies operate has changed significantly becoming more dynamic, very competitive and global. This chapter attempts to analyse how the digital transformation could affect more specifically strategic and IT-business alignment.

IT investment management and information technology portfolio management (ITPM)

2014 ◽  
Vol 27 (6) ◽  
pp. 802-816 ◽  
Author(s):  
Pietro Cunha Dolci ◽  
Antonio Carlos Gastaud Maçada ◽  
Gerald G. Grant
Keyword(s):  
Information Technology ◽  
Portfolio Management ◽  
Investment Management ◽  
Investment Planning ◽  
It Investment ◽  
Economic Sectors ◽  
Content Type ◽  
Implementation Phase ◽  
It Department ◽  
High Level

Purpose – The purpose of this paper is to analyze some Brazilian companies’ use of the information technology portfolio management (ITPM) technique as an aid to their information technology (IT) investments management. Design/methodology/approach – It was carried out in five case studies in different Brazilian companies from several economic sectors which were using ITPM or were in the initial implementation phase. Eight interviews were conducted. The persons interviewed were high-level executives working in the IT department in the studied companies. Findings – Different levels of ITPM use was found with respect to IT investment management (planning, control and evaluation). It was observed, in the analyzed cases, that ITPM is used most frequently in IT investment planning, which is the process most discussed and used in analyzed companies. The ITPM technique is used more frequently in Company 2 than in the other cases because the organization of the IT area in the company is structured according to ITPM dimensions. Research limitations/implications – The ITPM technique has received little attention in IT research and research in this area identifying the use and applicability of ITPM in companies is still very limited in the information systems literature. Originality/value – The paper presents IT investment management in different Brazilian companies and how ITPM was used to help companies in this process compose by planning, control and evaluation.

scholarly journals Information Technology Investment Strategy Planning: Balance Scorecard Approach

2011 ◽  
Vol 5 (1) ◽  
pp. 8
Author(s):  
Henny Hendarti ◽  
Iwan Kurniawan
Keyword(s):  
Information Technology ◽  
Field Studies ◽  
Investment Strategy ◽  
Investment Planning ◽  
Balance Scorecard ◽  
It Investment ◽  
Technology Investment ◽  
Information Technology Investment ◽  
Book Studies ◽  
Analysis System

Purpose of this research are to prepare the IT investment strategy using Balanced Scorecard approach in the company where the appropriate planning of this IT investment strategy can maximize the competitive benefit in the company, and it also to recommended a strategy of IT investment that can be implemented and measure the rate of return from the IT investment in the company. Research Method used book studies, field studies, and analysis system. Book studies from the books and journal. Field studies done by observation, interview, and questioner, and analysis system done by analyzed the ongoing system in the company. The result from this analysis is a recommendation in investment IT such as sales module, payment module, and report module. Then for the conclusion, this information technology investment planning can be develop to another investment implementation such authorized website of the company and using PDA (Personal Digital Assistant)Index Terms - Planning, Information Technology, Investment, Balance Scorecard

Real Options Analysis in Strategic Information Technology Adoption

2005 ◽  
pp. 2397-2402
Author(s):  
Xiaotong Li
Keyword(s):  
Information Technology ◽  
Technology Adoption ◽  
Real Options ◽  
Investment Planning ◽  
It Investment ◽  
Real Options Theory ◽  
The Real ◽  
Resource Managers ◽  
New Perspective ◽  
Options Theory

Many information resource managers have learned to be proactive in today’s highly competitive business environment. However, limited financial resources and many uncertainties require them to maximize their shareholders’ equity while controlling the risks incurred at an acceptable level. As the unprecedented development in information technology continuously produces great opportunities that are usually associated with significant uncertainties, technology adoption and planning become more and more crucial to companies in the information era. In this study, we attempt to evaluate IT investment opportunities from a new perspective, namely, the real options theory. Its advantage over other capital budgeting methods like static discounted cash flow analysis has been widely recognized in analyzing the strategic investment decision under uncertainties (Amram & Kulatilaka, 1999; Luehrman, 1998a, 1998b). Smith and McCardle (1998, 1999) further show that option pricing approach can be integrated into standard decision analysis framework to get the best of the both worlds. In fact, some previous IS researches have recognized the fact that many IT investment projects in the uncertain world possess some option-like characteristics (Clemsons, 1991; Dos Santos, 1991; Kumar, 1996). Recently, Benaroth and Kauffman (1999) and Taudes, Feurstein and Mild (2000) have applied the real options theory to real-world business cases and evaluated this approach’s merits as a tool for IT investment planning.

Sign in / Sign up

Export Citation Format

Share Document