What does IT Alignment mean? Is your IT function business-aligned?
After a long meeting reviewing the calendar for an upcoming new product launch, the IT and Marketing department managers got involved in an intense discussion. The application that needed to be developed to support the key launch promotion was not ready in time, and the launch date had to be delayed. Although it was not a technically complex application, the IT manager argued that there was no budget to support that development and that they had been working extra hours to have a beta version. In order to avoid this problem in the future, the Marketing department decided to include in any future product launch a detail on the IT resources required, and would also inform beforehand the IT Manager to ensure that the development could be properly funded. This is an example of an organization improving their IT alignment.
According to Luftman and Kempaiah (2007), IT Alignment can be found in “organizations that apply Information Technology (IT) in an appropriate and timely way, in harmony with the business strategies, goals and needs”. This means that the IT and business in a company need to follow a shared evolution and walk hand in hand.
As we could see in the example, if a company is not IT aligned, resources might be allocated to IT projects that are not consistent with the firm’s business strategy, and consequently the organization can lack efficiency and effectiveness.
Companies can not forget IT investments to implement their strategy, in recent years, most of the companies embraced substantial IT investments, from both the IS managerial perspective (IT Human Resources and Organization) and the IT assets perspective (hardware and software). Therefore, it is highly transcendent to better understand the factors that influence the level of IT Alignment in organizations (Chan & Reich 2007). IT Alignment can leverage firms’ IT investments to provide a better payback, improving the value of the products and services delivered to customers.
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References and other resources:
- Chan, Y.E. & Reich, B.H. 2007, “IT Alignment: What have we learned?”, Journal of Information Technology, vol. 22, no. 4, pp. 297-315.
- Luftman, J. & Kempaiah, R. 2007, “An Update on Business-IT Alignment: “A Line” has been drawn”, MIS Quarterly Executive, vol. 6, no. 3, pp. 165.