Paul P. Tallon

Competing perspectives on the link between strategic information technology alignment and organizational agility: insights from a mediation model

Strategic information technology alignment remains a top priority for business and IT executives. Yet with a recent rise in environmental volatility, firms are asking how to be more agile in identifying and responding to market-based threats and opportunities. Whether alignment helps or hurts agility is an unresolved issue. This paper presents a variety of arguments from the literature that alternately predict a positive or negative relationship between alignment and agility. This relationship is then tested using a model in which agility mediates the link between alignment and firm performance under varying conditions of IT infrastructure flexibility and environmental volatility. Using data from a matched survey of IT and business executives in 241 firms, we uncover a positive and significant link between alignment and agility and between agility and firm performance. We also show that the effect of alignment on performance is fully mediated by agility, that environmental volatility positively moderates the link between agility and firm performance, and that agility has a greater impact on firm performance in more volatile markets. While IT infrastructure flexibility does not moderate the link between alignment and agility, except in a volatile environment, we reveal that IT infrastructure flexibility has a positive and significant main effect on agility. In fact, the effect of IT infrastructure flexibility on agility is as strong as the effect of alignment on agility. This research extends and integrates the literature on strategic IT alignment and organizational agility at a time when both alignment and agility are recognized as critical and concurrent organizational goals.

Executives' perceptions of the business value of information technology: a process-oriented approach

Abstract: Despite significant progress in evaluating the productivity payoffs from information technology (IT), the inability of traditional firm-level economic analysis to account fully for the intangible impacts of IT has led to calls for a more inclusive and comprehensive approach to measuring IT business value. In response to this call, we develop a process-oriented model to assess the impacts of IT on critical business activities within the value chain. Our model incorporates corporate goals for IT and management practices as key determinants of realized IT payoffs. Using survey data from 304 business executives worldwide, we found that corporate goals for IT can be classified into one of four types: unfocused, operations focus, market focus, and dual focus. Our analysis confirms that these goals are useful indicators of payoffs from IT in that executives in firms with more focused goals for IT perceive greater payoffs from IT across the value chain. In addition, we found that management practices such as strategic alignment and IT investment evaluation contribute to higher perceived levels of IT business value.

A Process-Oriented Perspective on the Alignment of Information Technology and Business Strategy

Even after a decade of research and discussion, strategic alignment, denoting the fit between information technology (IT) and business strategy, remains an enduring challenge for firms worldwide. In this paper, we go beyond the dominant firm-level alignment paradigm by utilizing a value disciplines perspective on strategic foci to conceptualize alignment at the process level. Theory would then suggest that alignment should be tightest in processes that are considered critical to each firms strategic focus. Using data from matched surveys of IT and business executives at 241 firms, we detect support for this locus of alignment argument when alignment is identified using profile deviation or moderation. We also find a positive link between alignment and perceived IT business value in each of five primary processes in the value chain. By bringing a process-level view to the study of alignment and its impacts, we go beyond a discussion on the extent of fit—a cornerstone of the literature—to whether firms are pursuing the right type of fit for the particular mix of processes underlying their strategy. In this way, a process-level perspective can foster a deeper and more meaningful understanding of how alignment affects firm performance. Our results also show a need for managers to reconsider the steps taken to align IT and business strategy by looking more closely at how IT can support individual processes rather than at how IT can support an entire strategy.

Inside the adaptive enterprise: an information technology capabilities perspective on business process agility

Recent innovations in utility computing, web services, and service-oriented architectures, combined with a growing array of IT skills, have improved firms’ ability to be more agile in responding to change. Using the resource-based view of the firm, prior research suggests that IT resources, in isolation, are unlikely to yield superior performance and so as firms try to boost their agility, the question becomes how to configure IT resources to prepare for, or react to, change. In this paper, we posit that managerial IT capabilities based on IT-business partnerships, strategic planning, and ex-post IT project analysis lead to the development of technical IT capabilities associated with a flexible IT infrastructure which in turn drives agility or a firm’s ability to react to change in its products and markets. Using data from matched surveys of IT and business executives in 241 firms, we find that managerial and technical capabilities affect agility. In further testing, we reveal that in a stable setting, technical IT capabilities are more important to agility than managerial IT capabilities, while in a dynamic setting, the opposite is true. Thus, for firms operating in volatile markets, effective models of managerial IT governance are essential for delivering superior agility or adaptiveness.

Does IT pay to focus? An analysis of IT business value under single and multi-focused business strategies

Previous research finds that firm performance is highest when firms maintain a singular strategic focus as opposed to a multi-focused strategy. Yet, from an IT perspective, there is still some debate as to whether IT business value or the contribution of IT to firm performance is also maximized when firms maintain a single-focused strategy. Using the notion of value disciplines to model strategic foci, we find in a matched survey of executives in 241 firms that IT business value is highest in firms with a multi-focused business strategy and lowest in those with a single focus. We also find a relationship between strategic foci and the primary locus of IT value within the value chain for all focus-types except those emphasizing operational excellence. If all firms are using IT to reduce operating expenses, operationally excellent firms may find it increasingly difficult to sustain a low-cost advantage over time through IT.

Strategic IT Alignment: Twenty-Five Years On

All research streams can trace their lineage to an initial paper or series of papers. The information systems (IS) field – despite its relative youthfulness – can point to examples of seminal research by Davis (1989) on technology acceptance or Brynjolfsson and Hitt (1996) on information technology (IT) payoffs as the foundation of whole new areas of research. After almost a quarter century and 3200 citations (as of October 2014), many researchers would also include work by Henderson and Venkatraman (1993) – first published in the IBM Systems Journal under the heading, ‘Strategic Alignment: Leveraging Information Technology for Transforming Organizations’ – on the list of seminal and transformative IS publications.

A Service Science Perspective on Strategic Choice, IT, and Performance in U.S. Banking

With the move to an information-based economy, financial services has become a key contributor to the U.S. gross domestic product. Even as consolidation reduces the number of banks, small banks with under

The Information Artifact in IT Governance: Toward a Theory of Information Governance

100 million in assets continue to report higher profit margins than large banks with over

Value Chain Linkages and the Spillover Effects of Strategic Information Technology Alignment: A Process-Level View

100 million in assets. Lacking scale, small banks employ a service-oriented business strategy (customer intimacy), whereas large banks focus on productivity and throughput (operational excellence). Information technology (IT) plays a key role in applying each strategy, but as banks move toward customer intimacy in general, the challenge is to grow without undermining service quality. Using a balanced panel data set from 43 U.S. banks, this paper finds that banking strategies are becoming more customer focused. Yet for large banks in particular, IT remains resolutely operations focused. This misalignment could restrict future banking performance. In this way, this paper contributes to the service science literature by using size to dissect banking strategies and performance.

Information life cycle management

In recent years, chief information officers have begun to report exponential increases in the amounts of raw data captured and retained across the organization. Managing extreme amounts of data can be complex and challenging at a time when information is increasingly viewed as a strategic resource. Since the dominant focus of the information technology (IT) governance literature has been on how firms govern physical IT artifacts (hardware, software, networks), the goal of this study is to extend the theory of IT governance by uncovering the structures and practices used to govern information artifacts. Through detailed interviews with 37 executives in 30 organizations across 17 industries, we discover a range of structural, procedural, and relational practices used to govern information within a nomological net that includes the antecedents of these practices and their effects on firm performance. While some antecedents enable the speedy adoption of information governance, others can delay or limit the adoption of information governance practices. Once adopted, however, information governance can help to boost firm performance. By incorporating these results into an extended theory of IT governance, we note how information governance practices can unlock value from the ever-expanding mountains of data currently held within organizations.