Abstract Becauseof the changing nature, uncertainties and complications of business world,aligning information systems(IS) with corporate strategy has appeared to be aconcern for researchers and practitioners over the last decade; especially in recentyears, with the rapid development in technologies, the role of informationsystems playing in the corporate strategy is getting more and more significantand not ignorable; combined with the increasingly competitive businessenvironment, achieving this alignmentbecomes even more demanding and critical day after day. However, the challengeis getting more and more severe at the same time. Therefore, in this paper, athorough analyse and discussion about the need of alignment between IS andcorporate strategies in IS planning phrase willbe made, then the paper reviewed and discussed onealignment model to deliver a comprehensive understanding of thealignment concept and various alignment in an organization, with the focus onalignment between IS and corporate strategy; furthermore, based on the alignment model,the paper summarized what top management or CIOs should do to make thisalignment better applied into the management concept, so that the IS can fully realize itsfunction in corporate strategy.KeyWords: Information System, IS planning, corporate strategy, alignment,technology development, management IntroductionIn modern turbulent and competitive business environment, themajor challenge for an organization is no longer success, but survival; on theone hand, corporate strategies have become the most vital one above all otherfactors, which can save or either ruin an organization over night; on the otherhand, IS has developed to be not neglected for a business to survive and thrive;moreover, the alignment of are even morerequiring and essential if these two perspectives want to fully fulfil theirobligations and realize the expected value. Thispaper starts with the important position of information systems in an organization,then elaborated the definition of alignment, followed by deeply discussing thenecessity and significance of aligning IT with business objective corporate strategies;afterwards, this paper reviewed an popular alignment model, proposed by PijpersV, to help understand comprehensivelythe alignment concept and various alignments in an organization, focusing onalignment between IS and corporate strategy; furthermore, based on the alignment model, the paper summarized what topmanagement or CIOs should do to make this alignment better applied into themanagement concept, so that the IS can fully realize its function in corporatestrategy.Theoretical FoundationsDefinition of CorporateStrategy and Information SystemsCorporate strategy, as defined in business dictionary, is “theoverall scope and direction of a corporation and the way in which its variousbusiness operations work together to achieve particular goals”, and Michael E.Raynor ever explained corporate strategy with two parts (Raynor, 2007): (1) capturinginter-divisional synergies, it means apprehend the synergistic effect amongdiffident divisions and make the synergies best serve for business; and (2) howcorporates recognize, identify and cope with strategic uncertainties.
“Information systems, as Laudon& Traver ever elaborated in the article, are technological componentsin an organization, which are interconnected and work together to gather,process, store, and disseminate information to support decision making,coordination, control, analysis, and visualization in an organization.” (Laudon& Traver, 2012)These two seemingly unconnected terms have presented ustheir tight relationship during last 2 decades in this agile business world,people has become increasingly realized the significant function that IS playsin corporate strategy and decision making; later in this paper, the linkbetween IS and corporate strategy will be explained and further studied to makethe connection massively contribute to business.Definition of AlignmentNumerous definitions of alignment can be found in theliterature, and as early as in 1993, Henderson and Venkatraman were among thefirst to introduce this term for business, and they (Henderson &Venkatraman, 1993) described alignment as the degree of fit andintegration among the following four components: business and strategy,business and IS infrastructure. According to Ola (El-Telbanya & Elragalb, 2014),the term alignment was defined as the extent to which information systemssupport and have a positive relationship with the organization’s objectives andstrategies as defined in the business plan in an appropriate and timely way. The following parts will explicate how the alignment betweenIS and corporate strategies assist in the synergies between divisions, and howthe alignment can make both uttermost achieve their values. Importance of IS in an Organization With the rapid development of technologies, IS has developedinto powerful technological tools which can collect, process, store, anddisseminate information from a simply data depository in the very beginning; andit has come to play a crucial role in supporting decision making, coordination,control, analysis, and visualization in an organization, which largely affects thesustainability and growth of organisations.
Information systems, as Arwa said in his article (Altameem, et al., 2014), have interposed into almost alldaily work: meeting, communication, information gathering, reporting etc, tohelp corporate operate activities and functions properly, accurately,effectively and timely in the means of software, he alsosaid information systems have become a source of competitive advantage, which is of great benefits in making rightdecisions, improving productivity and performance, creating new ways ofmanaging and organizing, and developing new business, Jos (Trienekens, et al., 2014) also expressedthe overwhelming importance of information system in an organization: IS hasbecome the backbone in almost every industry, for instance education, finance,government, health care, manufacturing, and almost all large and smallbusinesses, organisations that have successfully applied IS and used them inthe right way outperform organisations without IS.Ahmed ever stated in his article (Elmorshidy, 2013):information systems, as an effective technological tool to implementbusiness goals, contribute positively to the creation of new businessstrategies or better support existing business strategy. As above, a lot articles have mentioned the vital role ofinformation system in an organization; however, seldom researchers talked aboutinformation system without emphasizing the importance of alignment between theinformation system and corporate objectives, requirements and strategies.Arwa (Altameem, et al., 2014) emphasizedthe alignment like this: the usage of modern information technologies in theorganization management will be successful only when information systemdevelopment is aligned with the organization system development strategy.Jos (Trienekens,et al.
, 2014) also highlighted that IT projects should be tightlyconnected with business side to achieve organization goals and realizecorporate values, and the way to manage and improve the link is alignment of ISand corporate strategies.Business strategy and IS should work in uniformity for thebusiness user to understand the enterprises’ system alignment with businessinformation integration. (Sarhandi, et al., 2011)Over the last decade we have seen an increase in recognitionof IS and the more integrated role IS has begun to play in corporate strategies,so that more and more researchers and practitioners are pursuing the effectivealignment between IS and corporate strategies. Significance of Aligning IS with CorporateStrategy At theend of 20th century, some people had already realized the importanceof aligning IS with corporate strategy, as early as in 1991, Das (Das, et al., 1991) ever stated in his articlethat alignment is crucial because it assists organizations in ensuring that theareas which are needed for improved organizational performance are targeted byinformation systems Teo andKing (1997) also pointed that alignment makes IS planning and business planningactivities in sync with each other, to guarantee continuous integration so thatorganizational goals and purposes can be achieved. (Teo & King, 1997)After 2 decades practice, more and more people now aregetting realized the significance of aligning the IS and corporate strategiesin improving organization performance, accomplishing the business objectivesand corporate value.David Cotgreave said when IS and business strategy arealigned and interwoven, IS cannot only make great contribution in drivinggrowth, accelerating market share, improving productivity and efficiency; butalso help corporations reduce risks when facing turbulent and dynamic businessworld; when IS andstrategy can really understand each other, the value it increases is way morethan any other department can bring.
Corporates with the alignment givethe impression of dynamic, current and connected, those without proper alignmentare falling behind than others. (Cotgreave, 2017)Trienekens expressed the same opinion in his article, theproper alignment can make sure the return value from IT investment bemaximised, and it provide management the correct guidance and great flexibilityto react to changes, through this alignment, organization can gain a bettercompetitive position. (Trienekens, et al., 2014)Aligning the two key perspectives in an organization providea chance for business management to better understand IS, so that CEOs canapply the right system to organization, and make better use of these systemswhen forecast trend and make decisions; and at the same time, alignment enhancethe understanding of business strategies and objectives by CIOs or IS managers,in order that IT activities can work for business goals, and be powerfulsupport in making business strategies. IS now is a source of competitiveadvantage, and the alignment can largely enhance the strategic role of IS, sothis expanding role has forced strategic systems planners and IS planners tochange the scope, objectives, style and sources of expertise in planning. (Altameem, et al., 2014) Thusit is important to take into consideration of this tight linking during ISplanning phases, so that the alignment can be sustained during the wholelifecycle.
Many researchers have studiedthe alignment and worked out models for people to better understand and applythe alignment in practice. Alignment model and frameworkOne model introduced by V. Pijipers is selected for us tobetter understand the concept and learn how to align the IS with corporatestrategies. (Pijpers, et al., 2008) Alignment model by Pijpers, V; Gordijn, J;Akkermans, H In V. Pijipers’s model, there are four different perspective,which are all essential for an organization: (1) the corporate Strategy perspective, (2) the ValueCreation perspective, (3) the Processes perspective, (4) the IS perspective. The framework of alignmentspresents us a comprehensive vision of the alignments among the fourperspectives, which could help management level understand the holisticsituation, and then know what to do from strategic level.
As known that in asystem each perspective should be properly aligned withthe others, but two perspectives were of most interest and consideredmost relevant: the business strategy perspective and the IS perspective, since the stakeholders sought anIS design which “matched” their business strategy. So, the focus of this partis aligning the organization’s strategy and IS. As many business ideas stem from technological innovations,so the development of information system serves as the starting point of thisframe; however before actually implementing information systems it must beunderstood – on a high level – what the system will do and how this will impactthe organization. and to do this managers or CIOs should have a clearunderstanding of corporate strategies, according to the model, informationsystems lay the foundation of business, and IT serves as the source ofstrategies; thus, this isvital, because any mistake made in the early phases of information systemdesign can have large consequences later, Therefore,it should be the biggest concern of top management and managers how to alignthe IS and corporate strategies in IS planning phase. As seen from the model, corporate strategies and strategicpositions can be affected by other organizations or outer environment, so itdecides the success of the organization; the interactions between strategiesand inter environment will determine whether the organization is in the rightway. Information system, as the source of competitive ideas and a bond betweendifferent divisions, interact actively with all other perspectives, so it is vitalfor IS to deliver to other environments the correct and valuable strategic information.Therefore, in a complicated environment, the alignment of IS and corporate strategiesis proper applied or not can determine the fatal of the organization. What management and CIOs should do tocontribute to this alignmentIt has been widely realized the overwhelming position of ISand the strategic function of alignment between IS and business strategies in anorganization; as a manager or CIO, they should understand the significant role ofIS and the alignment, IS leaders musthave the ability to work with other functions units in the business to make thealignment a reality(CIO Executive Council, 2009);and to fullyunderstand information systems, a managers must understand the broaderorganisation, management, information systems dimensions of systems and theirpower to provide solutions to challenges and problems in the business environment (Issa-Salwe, 2011), which also can be seenform the above model.
In a more detailed way, CIOs must make sure that every ITactivity, project, or service play a part in realizing business goals, and ITagenda work towards achieving business-related and not IT-related metrics inorder to improve alignment; and on the other hand, businesses should be awareof their IT resources, which is something they often neglect to do, becausetheir business’ competitiveness depends a lot on the quality of theirtechnology resources and whether these resources nimble or efficient enough tomeet changing market needs, as top management, they are responsible for thispoint.Growthwave expressed the same opinion in: the key successfactor for aligning IT spending and efforts with business needs is mutualleadership and accountability. Business leaders must lead IT and CIOs mustbecome business leaders. CIOs certainly need to increase their ownaccountability for IT results, but they must also help hold the businessaccountable for IT as well.(Growthwave, 2010)According to a survey of more than 500 senior executives (Lochan& Shah, 2010), it was foundthat despite massive resources and energy devoting in aligning informationsystems with corporate strategy and business requirements, fewer than one infive felt their efforts were achieving good results. Trouble typically startswhen business units hand off their strategy to IT at too high a level, the broad goals are not concreteenough to be converted into well-informed IT decisions.
In response, theproposals IT develops are defined at too low a level—often as a one-yearoperating plan rather than a comprehensive program to reach a strategicdestination. Effective alignment can occur only when IT and businessstrategy are fastened in clearly articulated business capabilities, while thiscan be ensured during IS planning phase, in the model, it is also highlightedthe significance of the proper IS planning before implementation about properalignment of IS and corporate strategies during planning phase. Another point that shouldn’t be neglected by management andCIOs is continuouscommunication and close partnerships between IS and business managers, becausethis can make sure that the parties understand each other’s goals andobjectives, and can recognize challenges in each other’s field of expertise;and to guarantee the communication, they can establish formal communicationstructures that are created and maintained between the business and the ISunits; through this continuous effort, it can make sure the corporate strategy arecarried out by IS throughout their lifecycle, can find any mistake to change accordingly in a timely way. (Kekwaletswe & Mathebula, 2014) conclusionTechnologies development has made information systems a mustin an organization, they are no longer just tools that can collect, process,store, and disseminate information, IS are playing unneglected role in theprocess of business planning, design, analysis, operation management andstrategic decision making.
Alignment of IS and corporate strategy make sure thatthe application of information systems is in harmony with business objectives,strategies and requirements, in order to massively realize the function andeffect of IS, and to make IS better work for business. IS and corporate strategic alignment has been one of themost popular modern management concepts in business and IT managementparticularly in academia and industry, any alignment model or strategy mustultimately pursue one goal—continually optimize returns to the business from ITinvestments, including investments in projects, capital, service, support,maintenance, and any other IT effort or expenditure. The main factor for thesuccess of the alignment, except the information system itself, is the people:how the practitioner views the situation, whether they have the vision andknowledge to manage the alignment, and how they show the leadership and accountability;the people should not only be executives, but also CIOs and managers.This paper elaborated the importance of information systemin organization, and then re-emphasized the significance of aligning IS andcorporate strategies in IS planning, followed by the study of one alignmentframework proposed by V.
Pijipers to assist management understand the necessityof this alignment and gain some ideas on how to obtain the alignment; thensuggestions were made on what management and CIOs should do to pursue thealignment between IS and corporate strategy and potentially maximize thebenefits of this alignment.