Evaluating Information Systems Alignment in Small Firms

Many studies of IS alignment have focused on the alignment between business strategy and IS strategy. This study is different to these prior studies as it develops a measure of IS alignment that is focused on business processes rather than business strategy. Therefore, it examines whether IS is aligned with business processes, i.e. the functional sub-component of the Henderson & Venkatraman (1993) model of IS alignment. The framework for this study was the Process Classification Framework (PCF) by the American Productivity & Quality Center (APQC, 2005). The framework identifies twelve first-level business processes and a total of 63 second-level processes. For example, one of the first-level processes is ‘develop vision and strategy’. The PCF suggests this particular process has three second-level processes: “define the business concept and long-term vision”, “develop business strategy”, and “manage strategic initiatives”. Other first-level processes include: “market and sell products and services”, “develop and manage human capital”, and “manage IT”. The goal of this project was to create a measure of alignment between IS and a firm’s business processes. A sample of 37 small manufacturing firms was studied. A questionnaire was created to guide interviewers and asked managers to indicate how important each business process was to their firm. Managers were also asked to indicate how well IS contributes to each business process. The data has been analysed using both matching and moderation techniques (Chan et al, 1997). The results indicate that the business process approach looks promising as the instrument could provide an efficient measure of IS alignment for small firms. The preliminary analysis indicates that both matching and moderation techniques can be useful.