How to Achieve IS Strategic Alignment

Reference: Preston, D.S. and Karahanna, E. (2009), Antecedents of IS Strategic Alignment: A Nomological Network, Information Systems Research 20:2, pp. 159-179.

One would expect that a shared understanding between the CIO and top management team about the role of information systems in the organization is necessary for an organization to achieve alignment between its strategies for information systems and business. It’s hard to imagine how alignment could be achieved without such a shared understanding. But, the referenced research, while it finds a statistically significant relationship between these constructs, concludes that shared understanding explains less than half (48.3%) of the variance among companies in their IS strategic alignment. In other words, presumably, some companies have relatively low shared understanding and high alignment and some have relatively high shared understanding and low alignment. Of course, one cannot expect perfect correlation, but such a low correlation is indeed baffling.

One explanation might be that a shared understanding is necessary but not sufficient for alignment. In other words, low understanding inevitably leads to poor alignment but high understanding is no guarantee of high alignment. Unfortunately, I have no access to the authors’ data and cannot test this assumption, but I imagine that it’s true. If so, it provokes the question, “what is needed in addition to a shared understanding to achieve alignment?” To answer this question, it is useful first to examine how the constructs of “Strategic Alignment” and “Shared Understanding” are defined by the authors:

Strategic alignment: The congruence of business strategy and IS strategy. This is based on three factors measured on a five point scale ranging from “strongly agree” to “strongly disagree.”

• The IS strategy is congruent with the corporate business strategy in your organization
• Decisions in IS planning are tightly linked to the organization’s strategic plan
• Our business strategy and IS strategy are closely aligned

Shared understanding: The degree to which the CIO and top management team have a shared view and understanding about the role of IS within the organization. This is based on four factors measuring, on the same 5-point scale, the degree to which the CIO and top management team members have:

• Shared understanding of the role of IS in our organization
• Shared view of the role of IS as a competitive weapon for our organization
• Shared understanding of how IS can be used to increase productivity of our organization’s operations
• Common view about the prioritization of IS investments

So why doesn’t a shared understanding automatically lead to strategic alignment? What else is needed? One possibility is resources. If the resources (financial or human) available to the CIO are insufficient to convert understanding into action, the CIO might be unable to define a realistic strategy that is aligned with the business. However, I’m skeptical of this explanation because the definition of a shared understanding seems to require that the top management team understands the resources that the IS function needs to implement an aligned strategy.

A second possibility is that the top management team has decided that information systems and technology are relatively unimportant to the organization’s success. In this case, there is no need for alignment. Another way of thinking about this situation is that IS strategic alignment is simply achieved by limiting the role of the IS function to a support role at the lowest possible level. Ideally, survey respondents would recognize that this role is aligned with the business, but I would guess that CIOs filling out the survey would answer otherwise.

Another possibility is that the IS and business planning processes are not tightly linked. As a result, there would be no negotiation, no give-and-take, between IS and business functions, as the IS strategy evolves. No amount of understanding can substitute for the values that are revealed in bargaining for resources and in joint planning on linked decisions. Process might be as important as understanding, but this factor is not part of the authors’ study.

Another study has identified prior IS success as an antecedent to IS strategic alignment (Chan, Y.E., Sabherwal, R., Thatcher, J.B. (2006), Antecedents and outcomes of strategic IS alignment: an empirical investigation, IEEE Transactions on Engineering Management 53:1, pp. 27-47). I don’t really see why prior IS success would affect strategic alignment, although I can understand that IS failure could easily derail it, even in the presence of shared understanding.

This research is important in confirming what factors are important in achieving a shared understanding – factors such as CIO business knowledge and top management IS knowledge. But, if I were a member of the top management team, I would feel quite uncomfortable knowing that shared understanding accounts for only 48% of the variance in aligning IS and business strategies. I’d certainly want to know what’s in that other 52 percent.