INFORMATION TECHNOLOGY STRATEGY AND ALIGNMENT

Information Technology Strategy and Alignment: Verizon Wireless

Abstract

In this paper, we go beyond the dominant firm-level alignment paradigm by utilizing a value disciplines perspective on strategic foci to conceptualize alignment at the process level. Theory would then suggest that alignment should be tightest in processes that are considered critical to each firm's strategic focus. Using data from matched surveys of IT and business executives at 241 firms, we detect support for this locus of alignment argument when alignment is identified using profile deviation or moderation. We also find a positive link between alignment and perceived IT business value in each of five primary processes in the value chain. By bringing a process-level view to the study of alignment and its impacts, we go beyond a discussion on the extent of fit—a cornerstone of the literature—to whether firms are pursuing the right type of fit for the particular mix of processes underlying their strategy. In this way, a process-level perspective can foster a deeper and more meaningful understanding of how alignment affects firm performance. Our results also show a need for managers to reconsider the steps taken to align IT and business strategy by looking more closely at how IT can support individual processes rather than at how IT can support an entire strategy. Information Technology Strategy and Alignment: Verizon Wireless

Introduction

The potential of information systems (IS) in supporting organisational activities and helping them to gain competitive advantage has been widely recognised by researchers and the business community (Peters, Heng & Vet, 2002), and advances in information technology (IT) over the last decade have made it possible to exploit the potential of IS/IT (Ward & Peppard, 2002). IT applications used to help organisations to gain competitive advantage, reduce competitive disadvantage, or meet other strategic enterprise objectives. Applications such as these are referred to as the strategic management of information technology and continue to be key issues in exploiting IT/ARE capabilities to achieve higher business performance (Croteau & Bergeron, 2001; Kearns & Lederer, 2000; Zhang & Lado, 2001).

In this context, aligning business and IT strategies was an important issue for researchers during the 1990s (Henderson & Venkatraman, 1990 & 1993; Luftman, Papp & Brier, 1999; Luftman, 2000). Most of the research was of a conceptual nature, however. Empirical studies of alignment by Chan, Huff, Barclay and Copeland (1997) and Luftman (2000) mostly examine US and Canadian firms. Kanungo, Sadavarti and Sriniwas (2001) examined public sector units in India. The theories in alignment models emphasise the effective use of IT/IS in meeting the needs of organisations, which is achieved by aligning organisational needs with IT/IS facilities. The focus, however, is to achieve competitive advantage in the marketplace by leveraging IT facilities and realising value from IT investment. Factors such as globalisation, advances in IT/IS, global political turmoil, acts of terrorism, and war against terrorism have made the external environment of business more complex and affected the task environment.

Numerous studies have linked business performance with different aspects of the organisation, for ...