Abstract:

The significance of the business value of IT is well documented in information systems (IS) research. Much of the work in the field has examined relationships between IT inputs and economic outcomes of the firm (Kohli and Grover, 2008). Similarly, the need for alignment between IT and business goals is well documented (Sabherwal and Chan, 2001). Despite the plethora of extant research, there remain challenges in achieving business-IT alignment. Factors such as lack of close relationships between IT and business disciplines, lack of senior executive support, lack of IT prioritization, lack of leadership in IT, and the failure of IT to meet commitments have been noted as major inhibitors (Luftman et al., 1999). These factors are exacerbated in the context of traditional firms that favor well-entrenched functional structures.

We conducted an action research study in one such firm, where there was indeed a disconnect between the business and IT functions. Over a period of 9 months, through a community of practice comprised of participants from IT and other functional disciplines in the firm, we worked on building trust to alleviate some of the factors. We found evidence of a change in the mental model of groups, such that they came to a common understanding of the business value of IT in the firm. The evidence includes a unique lexicon and a sub-culture that participants of the group formed, and maintained, over a period of 10+ years. Our findings suggest that contrary to prior research that looked at alignment as a top-down initiative, it needs to be cultivated bottom-up through changing the mindset of key people in the firm. One such initiative is that of knowledge management (Rubenstein-Montano et al., 2001). While companies do reasonably well in managing explicit knowledge, we believe that it is through the management of tacit knowledge flows within the organization through initiatives such as communities of practice, that alignment can be achieved.

We offer as takeaways a process theory of building alignment at an individual level. We contribute to theory by showing synergies in the literature of business-IT alignment and knowledge management. We contribute to practice by suggesting best practices for firms that have well-entrenched functional structures that want to achieve business-IT alignment.

References:
[1] Hirschheim, R., Porra, J., & Parks, M. S. (2003). The evolution of the corporate IT function and the role of the CIO at Texaco: how do perceptions of IT's performance get formed?. ACM SIGMIS Database, 34(4), 8-27.
[2] Kohli, R., & Grover, V. (2008). Business value of IT: An essay on expanding research directions to keep up with the times*. Journal of the association for information systems, 9(1), 23.
[3] Luftman, J., Papp, R., & Brier, T. (1999). Enablers and inhibitors of business-IT alignment. Communications of the AIS, 1(3es), 1.
[4] Rubenstein-Montano, B., Liebowitz, J., Buchwalter, J., McCaw, D., Newman, B., Rebeck, K., & Team, T. K. M. M. (2001). A systems thinking framework for knowledge management. Decision support systems, 31(1), 5-16.
[5] Sabherwal, R., & Chan, Y. E. (2001). Alignment between business and IS strategies: A study of prospectors, analyzers, and defenders. Information systems research, 12(1), 11-33.

Keywords:

IT Alignment, Community of Practice, Business Strategy, Innovation, Knowledge Management.