Investigating Information Systems Strategic Alignment

Although strategic alignment is an important theoretical concept, and achieving alignment or fit among organizational elements would seem to be an important business objective, empirical demonstrations of the importance of alignment have been uncommon (White 1986). This study attempted to provide an empirical assessment of the nature and importance of information systems strategic alignlnent There is much discussion today about the importance of 1. THE CONCEPTUAL MODEL strategic alignment in general (e.g., Venkatraman and Camillus 1984; White 1986) and information systems (IS) The conceptual model underlying the study is depicted in strategic alignment in particular (e.g., Elam et al. 1988; Figure 1. It depicts the propositions that IS.strategic Henderson and Thomas 1992; Henderson and Venkatraman 1992; Keen 1991; Ward, Griffiths and Whitmore 1990). alignment, defined as the fit existing between business The discussion generally suggests that the better the alignstrategy and IS strategy, impacts performance at the IS ment, the better the expected company performance. level and at the overall business level. However, there have been few empirical verifications of this proposition (White 1986). In addition, the discussion The results of the overall study, and detailed descriptions of about alignment has tended to be imprecise and vague (Van the instruments used to measure business strategy, IS de Ven and Drazin 1985). Important objectives of this strategy, IS effectiveness and business performance, have study were to identify a useful, precise model for the IS been described in Chan et al. (1993) and Chan and Huff strategic alignment construct and to examine empirically (1992) respectively. (Table 1 provides a brief outline of relationships among IS strategic alignment; IS effectiveness, the overall study.) This paper discusses the derivation and and business performance. significance of the IS strategic alignment computations and The discussion opens with a brief overview of the concepthe study's findings regarding alignment tual model underlying this study. Next, instruments that measure business strategy and IS strategy are introduced. Then instruments that measure IS effectiveness and business performance are outlined. This is followed by a 2. MEASURING BUSINESS STRATEGY AND general discussion of various approaches that are used to INFORMATION SYSTEMS STRATEGY assess alignment. Specific models of alignment are evaluated and the primary model for IS strategic alignment used within this research is selected and described. The links In order to assess IS strategic alignment, there needed to be between IS strategic alignment and performance are then assessments of both business strategy and IS strategy. discussed. Finally, the paper concludes with a description Table 2 lists the dimensions of these constructs as operaof the study's implications for management and future tionalized in this study. Multiple indicators were used to research. measure each dimension.