scholarly journals The impact of environmental uncertainty on business–IT alignment: A study in Sri Lanka

2021 ◽  
Author(s):  
◽  
Amitha Padukkage
Keyword(s):  
Sri Lanka ◽  
Conceptual Model ◽  
Business Strategy ◽  
Strategic Alignment ◽  
Environmental Uncertainty ◽  
Managerial Practices ◽  
It Alignment ◽  
Knowledge Based ◽  
Alignment Process ◽  
The Impact

<p>Despite the widely held belief that organisational performance can be enhanced through the alignment of information technology (IT) and business strategy, alignment remains a top concern for IT and business executives. This means that the challenges of attaining strategic alignment have not been overcome. Environmental uncertainty, in particular, is one of the key challenges to achieving strategic alignment.  Organisations continually adapt their strategies due to rapid changes in the market, technology and regulations. Either the business strategy changes and the IT strategy has to adapt to remain in alignment, or new IT emerges and business and IT strategies have to be revised to seize opportunities. Changes in the regulations can also have a significant impact on organisational strategy. Uncertainty increases the difficulty of understanding the environment and places executives in a challenging situation with regard to strategic decision making. It is thus important for executives to develop an understanding of the effect of environmental uncertainty on strategic alignment.  This issue has received little attention in the alignment literature. The literature presents mixed arguments on the effect of environmental uncertainty on strategic alignment. There is literature which explain the implications of the antecedents of strategic alignment; however, it does not consider these antecedents in the context of a highly uncertain environment. Hence, the objective of this research is to identify the extent of the impact of environmental uncertainty on strategic alignment and to determine how this affects the impact of other antecedents.  This research adopts a post-positivist approach. Using the perspectives of the resource-based theory and the knowledge-based view of the firm, a conceptual model is presented which examines the impact of antecedents and environmental uncertainty on strategic alignment. Three antecedents – shared domain knowledge, relationship management, and prior IS success – were selected as key antecedents. Environmental uncertainty was also proposed as an antecedent. This research assumes that the effect of these antecedents on strategic alignment is mediated by two managerial practices: communication and planning connection. Based on data collected from 212 organisations in Sri Lanka, the conceptual model is tested against the research objective. As a developing country, Sri Lanka has a highly turbulent environment and thus provides a suitable setting in which to examine the impact of environmental uncertainty on strategic alignment. Partial Least Squares structural equation modelling is used to test the conceptual model.  The results reveal that environmental uncertainty has a positive impact on strategic alignment and that it is mediated by managerial practices. All the antecedents were also found to have a positive effect on managerial practices. As a managerial practice, planning connection has the stronger influence on strategic alignment, while communication plays a contingent role in the alignment process. Moreover, organisation size also has an influence on the alignment process. The relative influence of antecedents and environmental uncertainty differs between SMEs and large organisations. This suggests that the mechanisms used to attain strategic alignment vary by organisational size.  The findings contribute to the literature and practice of strategic alignment in several ways. One of the contributions is the introduction of environmental uncertainty as an antecedent to strategic alignment and the identification of the influence of three sources of uncertainty: market uncertainty, technological uncertainty and regulatory uncertainty. Another contribution is a theoretical explanation of the strategic alignment process using the resource-based theory and the knowledge-based view of the firm. Further, this research extends the validity of the alignment process to a developing country context. From the practitioners’ point of view, this research provides valuable guidance about aligning IT strategy with business strategies in an uncertain environment. Moreover, this research provides prescriptive insights for attaining business–IT alignment for both SMEs and large organisations.</p>

scholarly journals The impact of environmental uncertainty on business–IT alignment: A study in Sri Lanka

2021 ◽  
Author(s):  
◽  
Amitha Padukkage
Keyword(s):  
Sri Lanka ◽  
Conceptual Model ◽  
Business Strategy ◽  
Strategic Alignment ◽  
Environmental Uncertainty ◽  
Managerial Practices ◽  
It Alignment ◽  
Knowledge Based ◽  
Alignment Process ◽  
The Impact

<p>Despite the widely held belief that organisational performance can be enhanced through the alignment of information technology (IT) and business strategy, alignment remains a top concern for IT and business executives. This means that the challenges of attaining strategic alignment have not been overcome. Environmental uncertainty, in particular, is one of the key challenges to achieving strategic alignment.  Organisations continually adapt their strategies due to rapid changes in the market, technology and regulations. Either the business strategy changes and the IT strategy has to adapt to remain in alignment, or new IT emerges and business and IT strategies have to be revised to seize opportunities. Changes in the regulations can also have a significant impact on organisational strategy. Uncertainty increases the difficulty of understanding the environment and places executives in a challenging situation with regard to strategic decision making. It is thus important for executives to develop an understanding of the effect of environmental uncertainty on strategic alignment.  This issue has received little attention in the alignment literature. The literature presents mixed arguments on the effect of environmental uncertainty on strategic alignment. There is literature which explain the implications of the antecedents of strategic alignment; however, it does not consider these antecedents in the context of a highly uncertain environment. Hence, the objective of this research is to identify the extent of the impact of environmental uncertainty on strategic alignment and to determine how this affects the impact of other antecedents.  This research adopts a post-positivist approach. Using the perspectives of the resource-based theory and the knowledge-based view of the firm, a conceptual model is presented which examines the impact of antecedents and environmental uncertainty on strategic alignment. Three antecedents – shared domain knowledge, relationship management, and prior IS success – were selected as key antecedents. Environmental uncertainty was also proposed as an antecedent. This research assumes that the effect of these antecedents on strategic alignment is mediated by two managerial practices: communication and planning connection. Based on data collected from 212 organisations in Sri Lanka, the conceptual model is tested against the research objective. As a developing country, Sri Lanka has a highly turbulent environment and thus provides a suitable setting in which to examine the impact of environmental uncertainty on strategic alignment. Partial Least Squares structural equation modelling is used to test the conceptual model.  The results reveal that environmental uncertainty has a positive impact on strategic alignment and that it is mediated by managerial practices. All the antecedents were also found to have a positive effect on managerial practices. As a managerial practice, planning connection has the stronger influence on strategic alignment, while communication plays a contingent role in the alignment process. Moreover, organisation size also has an influence on the alignment process. The relative influence of antecedents and environmental uncertainty differs between SMEs and large organisations. This suggests that the mechanisms used to attain strategic alignment vary by organisational size.  The findings contribute to the literature and practice of strategic alignment in several ways. One of the contributions is the introduction of environmental uncertainty as an antecedent to strategic alignment and the identification of the influence of three sources of uncertainty: market uncertainty, technological uncertainty and regulatory uncertainty. Another contribution is a theoretical explanation of the strategic alignment process using the resource-based theory and the knowledge-based view of the firm. Further, this research extends the validity of the alignment process to a developing country context. From the practitioners’ point of view, this research provides valuable guidance about aligning IT strategy with business strategies in an uncertain environment. Moreover, this research provides prescriptive insights for attaining business–IT alignment for both SMEs and large organisations.</p>

A Conceptual Model for Aligning IT Valuation Methods

2010 ◽  
Vol 1 (3) ◽  
pp. 36-54 ◽  
Author(s):  
J. Gilbert Silvius
Keyword(s):  
Conceptual Model ◽  
Business Strategy ◽  
Organizational Context ◽  
Strategic Alignment ◽  
Valuation Methods ◽  
It Alignment ◽  
Valuation Method ◽  
Business And It Alignment ◽  
The Relationship

The relationship between IT and value is complex and often disputed. Researchers and practitioners have created numerous models and valuation methods to capture this value. Although payoffs from IT investment are a function of strategic alignment, most of these models do not address the alignment of business and IT as a factor that influences or creates value. This paper explores the role of business and IT alignment in the valuation methods of IT assets and investments. It focuses on the impacts resulting from the use of IT assets, considering the function and nature of the impacts. It also explores the alignment of IT valuation and business strategy. The paper is concluded with the construction of a comprehensive selection model that provides guidance for aligning the IT valuation method with the specific characteristics, impacts and organizational context of an IT asset or investment.

A Conceptual Model for Aligning IT Valuation Methods

2012 ◽  
pp. 182-201 ◽  
Author(s):  
J. Gilbert Silvius
Keyword(s):  
Conceptual Model ◽  
Business Strategy ◽  
Organizational Context ◽  
Selection Model ◽  
Valuation Methods ◽  
It Alignment ◽  
Valuation Method ◽  
Business And It Alignment ◽  
The Relationship

The relationship between IT and value is complex and often disputed. Researchers and practitioners have created numerous models and valuation methods to capture this value. Although payoffs from IT investment are a function of strategic alignment, most of these models do not address the alignment of business and IT as a factor that influences or creates value. This paper explores the role of business and IT alignment in the valuation methods of IT assets and investments. It focuses on the impacts resulting from the use of IT assets, considering the function and nature of the impacts. It also explores the alignment of IT valuation and business strategy. The paper is concluded with the construction of a comprehensive selection model that provides guidance for aligning the IT valuation method with the specific characteristics, impacts and organizational context of an IT asset or investment.

Strategic Alignment for Business Value Creation

2011 ◽  
pp. 131-166
Author(s):  
Eng K. Chew ◽  
Petter Gottschalk
Keyword(s):  
Business Strategy ◽  
Strategic Alignment ◽  
Good Method ◽  
Specific Productivity ◽  
It Strategy ◽  
It Alignment ◽  
Full Life Cycle ◽  
Strategy Process ◽  
Explicitly Correlated ◽  
The Individual

Chapter IV defines the macromodel for achieving business/IT alignment. This chapter defines the detailed methodology for each step of the IT strategy process. First, the business strategy process must be methodical and able to clearly show the linkage between corporate strategic intents and the respective specific business functional plans for realizing the intents. For example, for a specific productivity goal defined for the corporation, the respective initiatives planned for sales and marketing, and those for supply chain management must be clearly linked and explicitly correlated in a “cause-and-effect” manner. A good method invented by Norton and Kaplan called strategy map is an effective tool for this purpose. This chapter reviews the basic principles of IT strategy. It briefly discusses various models used to analyze or describe disparate parts of strategic alignment. These strategic alignment models are contrasted with our end-to-end alignment model for defining and executing business-aligned IT strategy. It shows that our model has integrated all the individual disparate alignment elements proposed by these models. Further, it shows our model has addressed some key requirements which have either not been considered or only partially considered by some of these models. The main strengths of our model compared to previous work are twofold: (a) it addresses all alignment elements in an integrated fashion to make them meaningful and useful for practitioners; and (b) it addresses the full life cycle of strategic alignment from direction setting to strategic outcome monitoring and ongoing feedback loop for self-adjusted alignment (aided by architecture principles and IT governance).

Enterprise Systems Strategic Alignment and Business Value

2011 ◽  
pp. 42-58
Author(s):  
Euripidis Loukis ◽  
Ioakim Sapounas ◽  
Konstantinos Aivalis
Keyword(s):  
Business Strategy ◽  
Business Performance ◽  
Strategic Alignment ◽  
Enterprise Systems ◽  
Business Value ◽  
Future Research ◽  
Research And Practice ◽  
The Third ◽  
Research Stream ◽  
The Impact

This chapter is dealing with the alignment of enterprise systems with business strategy and its impact on the business value that enterprise systems generate. Initially the research on the strategic potential of ICT, which constitutes the basic theoretical foundation of the need for strategic alignment of enterprise systems, is analyzed. Then the previous research that has been conducted concerning enterprise systems strategic alignment is critically reviewed. It is grouped into three basic streams. The first of them is dealing with the conceptualization and basic understanding of enterprise systems strategic alignment. The second research stream aims at the development of models and frameworks for directing and assessing enterprise systems strategic alignment. The third research stream examines the impact of enterprise systems strategic alignment on business performance. Finally, an empirical investigation that has been conducted by the authors concerning the impact of enterprise systems strategic alignment on business performance as a guidance for future research on this topic is described. We expect that this chapter will sufficiently inform on strategic alignment, both researchers and practitioners in the area of enterprise systems, so that they can incorporate this highly important concept in their research and practice respectively.

Investigating the Relationship between Strategic Alignment and Information Technology Business Value

2011 ◽  
pp. 1-22 ◽  
Author(s):  
Paul P. Tallon ◽  
Kenneth L. Kraemer
Keyword(s):  
Information Technology ◽  
Significant Relationship ◽  
Business Strategy ◽  
Strategic Alignment ◽  
Environmental Uncertainty ◽  
Strategic Intent ◽  
Business Executives ◽  
Information Systems Strategy ◽  
The Relationship ◽  
Process Level

Although business executives remain skeptical about the extent of payoffs from investment in information technology (IT), strategic alignment or the alignment of information systems strategy with business strategy continues to be ranked as one of the most important issues facing corporations. In this paper, we report on the results of a process-level study to investigate the relationship between strategic alignment and IT payoffs. An analysis of survey data from 63 firms finds a positive and significant relationship between strategic alignment and IT payoffs, a relationship that holds for all firms, irrespective of their strategic intent or goals for IT. However, in exploring minor differences in strategic alignment between firms with different goals for IT, we uncovered evidence of an alignment paradox. This paradox shows that while strategic alignment can lead to increased payoffs from IT, this relationship is only valid up to a certain point beyond which, paradoxically, further increases in strategic alignment appear to lead to lower IT payoffs. Finally, we offer some suggestions for why this paradox might exist, specifically around issues of environmental uncertainty, industry clock-speed, and the need for organizational flexibility

Enterprise Systems Strategic Alignment and Business Value

2009 ◽  
pp. 152-168
Author(s):  
Euripidis Loukis ◽  
Ioakim Sapounas ◽  
Konstantinos Aivalis
Keyword(s):  
Business Strategy ◽  
Business Performance ◽  
Strategic Alignment ◽  
Enterprise Systems ◽  
Business Value ◽  
Future Research ◽  
Research And Practice ◽  
The Third ◽  
Research Stream ◽  
The Impact

This chapter is dealing with the alignment of enterprise systems with business strategy and its impact on the business value that enterprise systems generate. Initially the research on the strategic potential of ICT, which constitutes the basic theoretical foundation of the need for strategic alignment of enterprise systems, is analyzed. Then the previous research that has been conducted concerning enterprise systems strategic alignment is critically reviewed. It is grouped into three basic streams. The first of them is dealing with the conceptualization and basic understanding of enterprise systems strategic alignment. The second research stream aims at the development of models and frameworks for directing and assessing enterprise systems strategic alignment. The third research stream examines the impact of enterprise systems strategic alignment on business performance. Finally, an empirical investigation that has been conducted by the authors concerning the impact of enterprise systems strategic alignment on business performance as a guidance for future research on this topic is described. We expect that this chapter will sufficiently inform on strategic alignment, both researchers and practitioners in the area of enterprise systems, so that they can incorporate this highly important concept in their research and practice respectively.

Can internal strategic alignment influence performance? An empirical research applying structural equation modelling

2018 ◽  
Vol 31 (3) ◽  
pp. 585-604 ◽  
Author(s):  
Vanderli Correia Prieto ◽  
Marly M. de Carvalho
Keyword(s):  
Business Strategy ◽  
Structural Equation ◽  
Business Performance ◽  
Least Squares Method ◽  
Strategic Alignment ◽  
Strategy Implementation ◽  
Equation Modeling ◽  
Content Type ◽  
Successful Execution ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of internal strategic alignment (ISA) on business performance. A model is developed in which internal alignment is explained by the covariance between vertical and horizontal alignment. The perspective of business strategy implementation is adopted in order to support the theoretical relationship between the variables. Design/methodology/approach The partial least squares method, a structural equation modeling technique, is applied to estimate the model. Findings The results provide empirical validation for the model and confirm the positive relationship between internal alignment and business performance. Practical implications The ISA model is an essential aid for executives when implementing strategies and the validated research instrument can be applied for firms as a diagnosis of internal alignment in the organization. Originality/value The research contributed to meet the need for studies involving strategy implementation, as its formulation has already been emphasized, as well as to the need for models of strategic internal alignment that include activities relevant to the successful execution of the strategy, and to the need for alignment studies based on a holistic perspective.

The Effects of Strategic Typology Model and Strategic Alignment on the Delivery Capability of an IT Organization

2018 ◽  
Vol 9 (4) ◽  
pp. 58-80
Author(s):  
J. Stan Yarbrough ◽  
Mary L. Lind
Keyword(s):  
Business Strategy ◽  
Strategic Alignment ◽  
Chief Information Officer ◽  
Single Type ◽  
Information Technology Management ◽  
It Alignment ◽  
It Capability ◽  
Strategic Direction ◽  
It Organization ◽  
Low Levels

Measuring the state of IT alignment with business strategy is gradually becoming less elusive but practical approaches continue to be difficult to propose and execute. The results of this study indicate that higher degrees of IT strategic alignment with business occurs in Prospector and Analyzer types. Given the context of the STM model and the inclination of business strategy to center on a single type, these two models are most effective in generating IT capability over time. Defender STM types tend to lead to lower IT capability and low levels of alignment. It is recommended that the concept of IT alignment is as a function of information technology management, and the idea of making alignment solely the responsibility of the Chief Information Officer (CIO), fails to reach the goals of alignment, which requires strategic direction from a business that matches a Prospector or Analyzer type.

The State of Business and IT Alignment in the Singapore Construction Industry

2013 ◽  
pp. 192-215
Keyword(s):  
Construction Industry ◽  
Goodness Of Fit ◽  
Strategic Alignment ◽  
The State ◽  
Small Enterprises ◽  
It Alignment ◽  
Knowledge Based ◽  
Business And It Alignment ◽  
Use Of The Internet ◽  
Medium Enterprises

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.

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