IT Business Alignment and Process Performance: Results from a Survey in the Finance Industry

The value of IT and its impact on competitive outcomes is the subject of debate and controversy in theory and practice. In this context IT Business Alignment (ITBA) has been found to be a key CIO issue and a driver of IT value, but there is still a lack of coherent theoretical explanations for why and how ITBA influences outcomes. This study draws on the knowledge-based theory to develop and test a process-level model of IT Business Alignment examining a primary business process with its core information system. At a process-level of analysis the influence of ITBA on business process performance is investigated, encompassing IT personnel flexibility and IS usage as essential resources. ITBA at an operational level is based on three frameworks of prior research and proposed as concept for further research. The model is tested using data from 136 banks and shows that ITBA at an operational level indeed has an effect on process performance, and that this effect is indirect and fully mediated by IS usage and IT personnel flexibility.