Information Studies: Business Information Systems

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Master thesis

Business’ Contribution to Successful Business-IT Alignment

Jesse Piscaer SN: 10196749

University of Amsterdam Faculty of Science

Information Studies: Business Information Systems

Final version: August 20, 2013

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Master thesis

Business’ Contribution to Successful Business-IT Alignment

University of Amsterdam, Netherlands

Faculty of Science

Information Studies: Business Information Systems

PREFACE

We all know organizations where the IT department is underexposed and does not have a visible contribution to business performance. The department that fixes your computer, gets you the proper authorizations, or you reach out to when the application you are using is broken. The majority of the organizations cannot survive without a proper IT landscape in today’s competitive marketplace. This demands business and IT to be properly aligned to mutually support each other, Business-IT alignment. Traditionally, it has been said that IT should support the business to the fullest. But, how does the business make sure that IT can fully support them? This thesis researches the “Business’ Contribution to Successful Business-IT Alignment”, and was conducted in two sectors in the Netherlands: banking and health care.

Quint Wellington Redwood facilitated this research and was primarily interest in the question: “what does the business to make IT successful?” rather than “what does IT to make the business successful?” which complements my personal interest on the Business-IT alignment topic and was used as a starting point for this research.

It was aimed to prepare this thesis for a scientific publication; therefore a scientific article template was used for this thesis.

Enjoy reading! Jesse Piscaer

jessepiscaer@gmail.com August 20, 2013

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TABLE OF CONTENTS

1! Introduction 4!

2! Business-IT alignment 5!

2.1! Importance of Business-IT alignment 5!

2.2! A definition 5!

2.3! Business-IT alignment models 6!

2.3.1! Strategic Alignment Model 6!

2.3.1.1! Alignment between four domains 7!

2.3.1.2! Four alignment perspectives 7!

2.3.1.3! Criticism on the Strategic Alignment Model 8!

2.3.2! Generic framework 8!

2.4! Business-IT alignment success factors 9!

2.5! Business-IT alignment maturity 9!

2.6! Summary 9!

2.7! Criticism 10!

3! Research approach 10!

3.1! Relevance and objectives 10!

3.2! Research questions 10!

3.3! Research design 11!

4! Identifying most important Business-IT alignment success factors 12!

4.1! Selecting business’ Business-IT alignment success factors 12!

4.2! The 10 most important success factors 13!

5! How Business-IT alignment success factors are utilized in practice 13!

5.1! Introduction 13!

5.2! Interview approach 13!

5.2.1! Semi-structured interview 13!

5.2.2! Development of interview structure and questions 13!

5.2.3! Participant selection 14!

5.2.4! Data collection 14!

5.2.5! Data analysis 14!

5.3! Interview results 14!

5.4! Conclusion 15!

6! Factors leading to successful Business-IT alignment 16!

6.1! Introduction 16!

6.2! Analysis approach 16!

6.3! Measure Business-IT alignment maturity 16!

6.4! Factors leading to successful Business-IT alignment 16!

6.5! Conclusion 17!

7! Banking and health care 17!

7.1! Business-IT alignment maturity 17!

7.2! Presence of total sub-factors 17!

7.3! Conclusion 18!

8! Conclusion 18!

8.1! How and to which extent Business-IT alignment success factors are utilized in practice 18!

8.2! Other findings 18!

8.3! Limitations 19!

8.4! Further research 19!

Acknowledgements 19!

Bibliography 20!

Appendix A – Factors contributing to Business-IT alignment 23!

Appendix B – Rating Business-IT alignment factors (Questionnaire) 28!

Appendix C – Most important Business-IT factors according to experts 30!

Appendix D – Interview outline 32!

Appendix E – Interview summaries 34!

Appendix F – Combining the factors utilized in practice 56!

Appendix G - Business-IT alignment maturity questionnaire 64!

Appendix H - Factors leading to successful Business-IT alignment 69!

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1 INTRODUCTION

The impact of information technology (IT) on doing business has increased noticeably during the last decades (Sabherwal & Chan, 2001). New technolo-gy disrupts industries and the way we do business. Mastering these new technologies may be the key to long-term survival and success, according to a recent McKinsey study (Willmott, 2013). Alignment be-tween business and IT has become essential to in-crease organizational performance (Chan, et al., 1997). This alignment can be conceptualized as Business-IT alignment (BITa), which can be defined as business and IT working together to reach a common goal (Campbell, 2005). Numerous surveys have highlighted the alignment between business and IT as a top priority for IT executives since at least 1980 (e.g. Niederman, et al., 1991; Luftman & Ben-Zvi, 2011). Researchers have responded by ex-amining the necessity and benefits of aligning IT with the business (e.g. Henderson & Venkatraman, 1993; Broadbent & Weill, 1993; Luftman, et al., 1999; Wageman, 1997).

In addition, the 2011 Gartner CIO survey reveals that CIOs perceive their strategies to be intimately connected with business strategies, which is a reflec-tion of IT’s objective to get closer to the business to improve BITa (McDonald & Dave, 2011).

Several authors indicate top management’s com-mitment to the strategic use of IT as the most critical success factor in aligning business and IT (e.g. Teo

& Ang, 1999; Luftman, et al., 1999; Reich & Benba-sat, 1996). In BITa it seems clear that business and IT are mutually dependent and might have mutual benefits in achieving successful BITa. This demands effort from both sides and can therefore be consid-ered a joint effort.

Despite the majority of BITa literature available, no clear manual exists, explaining how to implement successful BITa. Fortunately, BITa theories, frame-works and models are available as an instrument to establish BITa (e.g. Henderson & Venkatraman, 1993; Maes, et al., 2000). Further, authors have identified enablers and critical success factors for achieving successful BITa (e.g. Wageman, 1997; Chan, 2002; Luftman, et al., 1999) and BITa maturi-ty models are available to measure organizations’ BITa maturity (e.g. Luftman, 2003).

The majority of the BITa research is focused on how the IT organization should align with the busi-ness and contribute to successful BITa, which ap-proaches alignment from an IT point of view (e.g. Peppard & Ward, 1999). But, how does the business contribute to successful BITa? Although, current scientific literature identifies success factors for both business and IT to increase BITa maturity, Sabher-wal et al. (2001) identifies the need for examining these factors from a business perspective since the success factors remain vague in how they are uti-lized in practice.

Business’ Contribution to Successful Business-IT Alignment

Jesse Piscaer

Master thesis, University of Amsterdam, Netherlands

Faculty of Science

Information Studies: Business Information Systems

ABSTRACT: Business-IT alignment (BITa) has become essential to increase organizational performance. Yet, achieving successful BITa continues to be a major concern for organizations. The majority of the BITa literature approaches BITa from an IT perspective and makes BITa an IT responsibility. But, how does the business contribute to successful BITa? Critical BITa success factors identified by existing literature, lack in-sight in how they are utilized in practice, which makes them difficult to use by organizations. This research gives insight on how existing BITa success factors, applicable to the business, are utilized in practice, by composing sub-factors. Furthermore, it identifies which sub-factors contribute significantly to BITa maturity. The research was conducted in two sectors in the Netherlands, (1) banking in which IT is used in their prima-ry processes, and (2) health care sector in which IT usually is used in their secondaprima-ry processes. As a result, the research found 30 new sub-factors, which explain how 10 existing BITa success factors identified by lit-erature are utilized in practice. Statistical analysis shows that 12 of these 30 sub-factors contribute significant-ly to successful BITa. Moreover, the research shows a significant difference in BITa maturity between bank-ing and health care organizations, in favor of bankbank-ing.

Key words: Business-IT alignment, Business-IT alignment success factors, Business-IT alignment maturity, banking, health care.

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In an effort to contribute to the knowledge on the business’ contribution to successful BITa this re-search was conducted among organizations in two services-providing sectors to answer the question “In what ways and to what extent does the business con-tribute to successful Business-IT alignment in the banking and health care sector?”

This thesis seeks to contribute to the literature on the business’ role in BITa by pursuing three specific goals. First, it seeks to provide further insight into business’ contribution to successful BITa. It aims to do so by getting an understanding on how existing BITa success factors, applicable to the business, are being utilized in practice, by composing sub-factors. Second, it examines the relation between the identi-fied sub-factors and BITa maturity. Finally, in doing so, the thesis also seeks to identify BITa differences between the banking- and health sector in which the study was conducted since a difference in BITa ma-turity between both sectors was expected.

Thus, in examining the business’ contribution to successful BITa, this research employs both a quali-tative- and quantitative approach and builds on exist-ing BITa theories, models, and factors relevant to achieve successful BITa, these factors need further insight in how they are utilized in practice.

The thesis is divided into eight chapters. Chapter 2 elaborates on the concept of BITa and BITa mod-els, with the objective to shape the theoretical foun-dation of this research. Chapter 3 describes the re-search approach including the rere-search questions. A selection of BITa success factors is provided in chapter 4, this selection will be further examined in how they are utilized in practice by using semi-structured interviews. Based on the interview find-ings, chapter 5 presents how the factors are being utilized in practice, by composing sub-factors. Chap-ter 6 examines the relationship between the identi-fied sub-factors and BITa maturity. An analysis of the BITa differences between the banking- and health care sector are described in chapter 7. Finally, chapter 8 draws conclusions on the conducted search, identifies limitations and outlines future re-search directions.

2 BUSINESS-IT ALIGNMENT

2.1 Importance of Business-IT alignment

An annual survey conducted by the Society for In-formation Management (SIM), in a joint effort with different academic leaders, indicates four ‘tradition-al’ IT management concerns: BITa, business process re-engineering, IT strategic planning and security and privacy. The study was conducted among IT

ex-ecutives representing 275 SIM organizations. Partic-ipants were asked to provide their top three manage-rial concerns from a list of 23 and their top five ap-plication and technology investments from a list of 51 (Luftman & Ben-Zvi, 2011).

All four ‘traditional’ concerns relate to obtaining business related returns from IT. Besides the focus on how IT costs can be directly reduced, another fo-cus has emerged on how to leverage IT to help im-prove business returns and reduce business expens-es.

Luftman & Ben-Zvi (2011) states that consider-ing BITa as a long pervasive key IT issue, it is not a question of being aligned versus misaligned, but ra-ther leveraging the opportunities for enhancing the relationship among IT and business organizations to attain demonstrable success. Furthermore, recent ac-ademic research shows that BITa maturity has a strong correlation with the organization’s perfor-mance (Dorociak, 2007).

In addition, the 2011 Gartner CIO survey reveals that CIOs perceive their strategies to be intimately connected with business strategies. This is a reflec-tion of their objective to get closer to the business and improve BITa maturity (McDonald & Dave, 2011).

Both the SIM- and Gartner survey target the IT executive and makes BITa an IT responsibility. Since business is becoming even more dependent on IT these days, what’s the business’ role in becoming more aligned with IT in order to embrace IT oppor-tunities, and increase business performance?

2.2 A definition

The Oxford English Dictionary defines ‘alignment’ as: arrangement in a straight line or in correct rela-tive positions. Applying the term to this research, the arrangement involves business and IT, which still remains a vague definition. Fervent adherents of BITa admit that the concept is ambiguous (Maes, et al., 2000). This seems odd given the relatively high importance of BITa according to several studies. Various alternative terms exist to refer to the phe-nomenon of alignment: balance (Henderson & Ven-katraman, 1993), coordination (Lederer & Mende-low, 1986), fit (Venkatraman, 1989), linkage (Reich & Benbasat, 1996) and harmony (Woolfe, 1993). These terms all assume to refer to one and the same phenomenon although their actual use does not con-tribute to its clarification (Maes, et al., 2000).

Many publications propose a definition for Busi-ness-IT alignment. Luftman et al. (1993) defines BITa as “the extent to which the IS strategy sup-ports, and is supported by, the business strategy.” Tallon & Kraemer (1999) prefers a shorter version

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of BITa, their definition is “the alignment of infor-mation systems strategy with business strategy.”

Both definitions are quite similar on focus and stra-tegic alignment. Reich & Benbasat (2000) examines the concept from a slightly wider perspective in de-fining BITa as “the degree to which the information technology mission, objectives and plans support and are supported by the mission, objective and plans.”

In general, BITa is defined in an indefinite and vague way, if at all, and many publications avoid pinning down the concept of BITa or fall back to tautological definitions (Maes, et al., 2000). Besides, many authors i.e. Coakley et al. (1996) question the measurability of alignment: if we are not able to measure alignment, then what conclusions can be drawn regarding its effectiveness? In an effort to re-define the concept of BITa, Maes et al. (2000) de-fines BITa as “the continuous process, involving management and design sub-processes, of con-sciously and coherently interrelating all components of the business IT relationship in order to contrib-ute to the organization’s performance over time.”

BITa is quite often interpreted in two contradic-tive ways, BITa as an ‘end state’ and BITa as a ‘pro-cess’. The concept of BITa as a state is further de-veloped by Luftman et al. (2000), which provides the possibility of measuring BITa maturity. The concept as a process is presented by several authors (e.g. Henderson & Venkatraman, 1993; Maes, et al., 2000). Ciborra (2000) describes BITa as a metaphor of building a bridge between two constantly moving shores, with business and IT on opposite sides. This indicates that business and IT are constantly chang-ing, requiring continuous attention, which makes BITa a persistent challenge calling for a dynamic process approach. In this research the definition of BITa from Maes et al. (2000) is used due to a variety of ways in which this definition is more comprehen-sive and diverges from previous definitions.

First, this definition adopts BITa as a dynamic process, involving continuous adjustments and sees BITa not as a static situation. This view corresponds with the need to the constantly changing environ-ments of both business and IT according to Ciborra (2000).

Second, this definition takes the components on the Business-IT relationship into account. It doesn’t confine BITa to the strategic level, and intermediate information sharing components at all levels are in-cluded.

Third, this definition does not restrict BITa to managerial processes, but includes design processes as well.

Finally, the definition does not strive for harmony and balance between the different elements of the

Business-IT relationship. The researchers assume that consciously introduced and/or sustained lack of balance is the motor of many organizational innova-tions.

2.3 Business-IT alignment models

Through decades, a number of BITa models have been proposed. The two key ones that have attracted most of the attention from researchers are the MIT90s (Morton, 1991) model and the Strategic Alignment Model (SAM) (Henderson & Venkatra-man, 1993). In comparison to the elements of the MIT90s framework, the SAM model draws a dis-tinction between the external perspective of IT and the internal focus of IT. This recognizes the potential of IT to both support and shape the business policy, which elevates IT strategy from the traditional role of an internal support mechanism (Henderson & Venkatraman, 1993). Maes et al. (2000) proposed a generic framework for information management. This model is in itself an elaboration of the SAM highlighting two extra axes.

The two models, SAM and the generic frame-work, provide the foundation for this research and will be further explained.

2.3.1 Strategic Alignment Model

Back in 1993, when the model was published, the authors noted that across a wide spectrum of markets and countries, IT was transcending its traditional “back office” role and was evolving towards a “stra-tegic” role with the potential not only to support chosen business strategies, but also to shape new business strategies, in supporting this movement they named the model: strategic alignment model (Henderson & Venkatraman, 1993). Moreover, the authors argued that the reason why firms often fail to see value from IT investments is due to lack of alignment between the business and IT strategy in

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the firm, and furthermore a lack of a dynamic alignment process ensuring continuous alignment in strategy and implementation between the business and IT organizations. Since the advent of SAM it has been the basis for much scientific research and consulting practices (Avison, et al., 2004).

The model (figure 1) is based on two building blocks: strategic fit and functional integration. The former recognizes the need for any strategy to ad-dress both external and internal domains. The latter,

functional integration, specifically considers how choices made in the IT domain impact (enhance or threaten) those made in the business domain and vice versa (Henderson & Venkatraman, 1993).

The external domain is the competitive market in which the business competes. It is concerned with decisions such as product-market offering and the distinctive strategy attributes as well as the range of “make versus buy” decisions. In contrast, the inter-nal domain is concerned with choices pertaining to the logic of the administrative processes and the specific rationale for the design and redesign of crit-ical business processes such as product delivery, product development, customer service, and total quality.

2.3.1.1 Alignment between four domains

SAM was intended to support the integration of IT into business by advocating alignment between and within four domains: business strategy, IT strategy, operational infrastructure and processes, and IT in-frastructure and processes (Henderson & Venkatra-man 1993).

Business strategy covers choices that affect the positioning of the organization in the competitive landscape. It deals with the business scope and the organization’s strategy to compete in the market-place. This is viewed in terms of distinctive compe-tences and business governance. Initially, these items refer respectively to attributes of strategy (e.g. pricing and quality) and the mechanisms (e.g. part-nerships and strategic alliances) for obtaining com-petitive advantage (Henderson & Venkatraman, 1993).

IT strategy covers three choices that propose the position of the organization in the IT marketplace.

Technology scope covers those specific information technologies that support current business strategy initiatives or could shape new initiatives. Systematic competencies covers IT strategy attributes that could contribute positively to the creation of new business strategies or support current business strategies, and

IT governance, which is the selection and use of mechanisms for obtaining the required IT competen-cies (Henderson & Venkatraman, 1993).

Operational Infrastructure and processes is de-fined as the choices concerning the particular inter-nal arrangements supporting the position amongst competitors, such as the management structure and work processes. Three aspects of this domain are relevant: the administration infrastructure such as structure and roles, the (work) processes defining the work flow and its associated information flow and the skills indicating the capability of the organization (Henderson & Venkatraman, 1993).

IT infrastructure and processes are defined in terms of the choices relevant to the internal ar-rangements and the processes that determine the range and types of products and services delivered by IT to the organization. Three aspects are essen-tial: architectures represent choices that define the portfolio of applications, the configuration of hard-ware, softhard-ware, and communication, and the data ar-chitecture that collectively define the technical infra-structure. Processes represents choices that define the work processes central to the operations of the IS infrastructure such as systems development, mainte-nance and monitoring and control systems. Skills are choices pertaining to the acquisition, training and development of the knowledge and capabilities to the individual required to effectively manage and operate the infrastructure of the organization (Hen-derson & Venkatraman, 1993).

2.3.1.2 Four alignment perspectives

Figure 2. Four alignment perspectives.

Strategic alignment at an organizational level can only occur when three of the four domains are se-quentially linked, starting at the anchor domain. This anchor domain is the driving force and is often initiating change. This change initiative is intended

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to address a problem area. The problem area is usu-ally in the second domain, also called pivot domain.

The changes in the pivot domain affect a third do-main, called the impacted domain. The impacted domain completes the strategic alignment perspec-tive. Henderson et al. (Henderson & Venkatraman, 1993) identified four dominant alignment perspec-tives which can be used for the analytic understand-ing of how business and IT can be aligned. The four alignment perspectives, each containing an anchor,

pivot and impacted domain are depicted in figure 2 and described below.

Perspective one: Strategy execution. This per-spective aligns via: business strategy - organization-al infrastructure and processes – IT infrastructure.

This is the traditional perspective in which business strategy drives organizational design, and organiza-tional design determines what IT infrastructure and processes are needed. Top management plays the role of strategy formulator, whereas the role of the IT manager should be that of the strategy imple-menter.

Perspective two: Technology transformation. This perspective aligns via: business strategy – IT strategy – IT infrastructure. Business strategy for-mulates the organization’s strategy. In this perspec-tive top management should provide a technology vision that would support the chosen business strate-gy. The role of IT management should be that of technology architect, who designs and implements the required IT infrastructure that is consistent with the IT vision.

Perspective three: Competitive potential. This perspective aligns via: IT strategy – business strate-gy – organizational infrastructure and processes.

Unlike previous perspectives that consider business strategy as given, this perspective allows the adap-tion of business strategy via emerging IT capabili-ties, IT strategy is the driver of this alignment per-spective. The role of top management is to make this perspective succeed as a business visionary in articu-lating how the emerging IT competences and func-tionality as well as changing governance patterns in the IT marketplace would impact the business strat-egy.

Perspective four: Service level. This perspective aligns via: IT strategy - IT infrastructure– organiza-tional infrastructure and processes. In this perspec-tive, the role of business strategy is indirect and is viewed as providing the direction to stimulate cus-tomer demand. The specific role of top management is to prioritize and articulate how scare resources can be best allocated. The role of the IT manager is, in contracts, the one of executive leadership with the specific task to make the organization succeed with-in operatwith-ing guidelwith-ines from top management.

2.3.1.3 Criticism on the Strategic Alignment Model As a result of the introduction of this model, several authors have criticized or extended this model. Luftman et al. (1999) defined and reviewed the model in a more practical way, although the authors did not enhance the model itself. Focusing on the concept of BITa, they expanded the research to iden-tify enablers and inhibitors in BITa, which are de-scribed in chapter 4. Maes et al. (2000) enhanced the SAM, producing the generic framework, which is subject to the next paragraph.

2.3.2 Generic framework

The generic framework is a framework, which is in itself an elaboration of the SAM (Maes, et al., 2000). The framework (figure 3) is a generic framework for investigating and interrelating the different compo-nents of information management, and deals with the interrelationship of business, information, com-munication and technology at the strategic, structural and operational level (Avison, et al., 2004).

Maes et al. (2000) added a third vertical and hori-zontal column to the SAM to reflect the separation of information/communication from technology. This stresses the importance of growing information and information delivery (Avison, et al., 2004). Their main premise is that the use and sharing of in-formation, and not the provision of inin-formation, are the real source of competitive advantage. The exten-sion aims to let information sharing act as a buffer between business and technology.

The horizontal column splits the internal domain into structural and operational levels. It represents the more long-term architectural components such as competencies and infrastructures of the organization. The vertical column represents both the internal and external information/communication aspects, the in-terpreting processes of information and communica-tion and knowledge sharing. The vertical column has the role as translator, the finder of a common lan-guage between business and technology.

Goedvolk et al. (2000) developed a similar framework that focuses on the technical or architec-tural side of SAM. The architecture framework (IAF) aims to integrate the architectural design of business and IT and enhances Maes’ in two ways. First, it expands Maes’ ideas in internal information requirements through adding an additional column. The new information column represents the knowledge, communication and co-ordination of in-formation. Second, it adds a third dimension to the model, which contains specific sub-architecture are-as. These prescribe the design of organizational as-pects that are the consequence of the introduction of an information system.

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The generic framework and the IAF can be com-bined to form a unified framework. However, since the majority of the literature departs from SAM and extensions of Maes, this research builds on those two models and leaves IAF out of scope for this re-search. Moreover, “architectural thinking” according to IAF might limit the theoretical foundation for this research.

Figure 3. Generic framework for Information Management 2.4 Business-IT alignment success factors

The concept of BITa has been defined and explained by models such as SAM. BITa addresses both doing the right things (effectiveness), and doing things right (efficiency) (Luftman, et al., 1999). But, how can organizations do the right things and do things right in achieving successful BITa?

Alignment between business and IT is not an easy task and knowing which critical success factors to manage will certainly enhance the success of such efforts (Wageman, 1997).

Several studies have proposed success factors contributing to successful or mature BITa. These factors were found in current literature. Based on Chan & Reich’s (2007) annotated bibliography and articles from well-known authors in the field of BITa (Luftman, et al., 1999; Teo & Ang, 1999; Reich & Benbasat, 2000; Chan, 2002; Kearns & Le-derer, 2003; Chan, et al., 2006; Huang & Hu, 2007; De Haes & Van Grembergen, 2008; Broadbent & Weill, 1993; Van Der Zee & De Jong, 1999; Luft-man, 2000) were used to compose a list of BITa suc-cess factors. For example, some random selected success factors are: “CEO and CIO have strong working relationship,” “well-prioritized IT projects,” “shared domain knowledge,” and “the CEO

partici-pates in IT planning.” A comprehensive list of the identified factors from the 11 articles can be found in appendix A and will be used in this research. 2.5 Business-IT alignment maturity

Luftman et al. (1999) has interpreted the practical implications of SAM and has identified the major enablers and inhibitors of BITa, as well as a model capable of assessing BITa maturity: Strategic Alignment Maturity Model (SAMM). This model describes a number of BITa criteria, each on differ-ent maturity levels (Luftman, 2000; Luftman, 2003).

The six criteria categories in the SAMM model are: communication, competency/value measure-ment, governance, partnership, scope & architecture and skills. Each criteria category contains a number of factors. For example for the criteria category communication factors are “understanding of busi-ness by IT” or “understanding of IT by busibusi-ness.” The factors can each be rated on five different op-tions, each representing a maturity level (Luftman, 2000).

The average of all criteria determines the maturity level of the organization in terms of strategic align-ment. These maturity levels are based on the existing Capability Maturity Model’s levels. The SAMM de-fines five levels of maturity for strategic alignment: initial/ad hoc, committed, established focused, im-proved/managed and optimized. The model has been successfully tested at more than 50 Global 2000 companies in the US and was subject to a bench-mark study, and was updated in 2003 (Luftman, 2003). This validation made the model an instrument of interest to use in this research. Also, no repre-sentative alternatives were apparent. Although, this model was used in this research, the validation of this model was out of scope.

2.6 Summary

The described phenomena shape the foundation of this research. The importance of successful BITa has been highlighted for a variety of reasons such as in-creased organizational performance by a mature BITa level. Several models and frameworks framing BITa are used in academic research, consulting prac-tices and organizations. The most important model is the SAM by Henderson & Venkatraman (1993), which is complemented by Maes et al. (2000). These models help to shape the thinking space on how BITa should be conceptualized, which leads to criti-cal success factors to achieve mature BITa. Finally, BITa maturity can be measured with SAMM.

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2.7 Criticism

As described in paragraph 2.2, BITa is a much-debated topic. Several critics are circulating about BITa such as the criticism of Maes et al. (2000), who tries to redefine BITa in a more comprehensive definition. Moreover, the measurability of BITa ma-turity might be close to impossible without a com-prehensive definition of BITa (Ciborra, 1997; Maes, et al., 2000). Concisely worded, BITa frameworks, definitions, maturity models and critical success fac-tors could assist organizations to position BITa as a strategic objective, however the important ‘how to achieve successful BITa’ question remains unan-swered and calls for further research on how existing BITa success factors are being utilized in practice. 3 RESEARCH APPROACH

3.1 Relevance and objectives

Having experience in the software development lifecycle I was involved in BITa processes. From my personal experience, alignment between business and IT was usually IT’s responsibility. From my perspective it seems that the business thinks of IT as something difficult and leaves organizational chal-lenges regarding IT to the IT department rather than actively collaborating with IT to solve the challeng-es. This triggered me to study the business’ role in achieving successful BITa.

Quint Wellington Redwood, an independent con-sulting firm in the field of business and IT, has seen the struggle organizations have in aligning business and IT, especially how the business can contribute to successful BITa. Based on the common interest in this topic, they facilitated this research.

A lot of research has been conducted on BITa, for example Chan & Reich (2007) summarized 150 im-portant BITa articles up to 2007. The literature iden-tifies the importance of the mutual effort needed to increase BITa maturity in an effort to increase or-ganizational performance. Several studies propose models and success factors to increase BITa maturi-ty (Henderson & Venkatraman, 1993; Broadbent & Weill, 1993; Luftman & Brier, 1999; Luftman, 2000; Luftman, et al., 1999). However, the proposed success factors identified by literature remain vague for practice in business and need further explanation (Campbell, 2005).

The objective of this research was to examine how existing success factors, applicable to the busi-ness, are utilized in practice. For example, literature suggests the factor “senior executives support for IT”, which is a factor leaving out how this is

accom-plished and demands further explanation for using it in practice. The results of this research should con-tribute to existing BITa literature and provide a prac-tical explanation of how existing BITa success fac-tors are utilized in practice, which should help organizations to improve BITa and might simplify the implementation of these factors.

3.2 Research questions

To provide insight on how existing business’ success factors are utilized in practice and contribute to suc-cessful BITa the following main research question was answered in this research.

In what ways and to what extent does the busi-ness contribute to successful Busibusi-ness-IT alignment in the banking and health care sector?

The in what ways of the research question covers a qualitative study focused on getting insight on how existing business’ BITa success factors, identified from literature, are utilized in practice by composing sub-factors. To what extent covers a quantitative study focusing on the actual contribution of the new-ly identified sub-factors from the qualitative study to BITa maturity. The term business entails executives, managers and employees working in the primary process of the organization.

In order to answer the main research question, four sub-research questions were formulated.

1. What entails IT alignment, Business-IT alignment maturity and Business-Business-IT alignment success?

This research entails the concepts: Business-IT alignment, Business-IT alignment maturity and suc-cess, and Business-IT alignment success factors. This question has already been answered in chapter 2, furthermore these concepts provide the theoretical foundation of this research.

2. How are existing Business-IT alignment suc-cess factors applicable to the business utilized in practice?

According to literature “top executive commit-ment” is one of the critical success factors contrib-uting to successful BITa. But, what does this factor mean and how is it utilized in practice? Interviews were used to identify how existing BITa success fac-tors applicable to the business are utilized in prac-tice.

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3. Which newly identified sub-factors contribute significantly to Business-IT alignment maturity?

The interview results provided insight into how existing success factors were utilized in practice, re-sulting in sub-factors. These sub-factors were statis-tically analyzed to determine the contribution of the sub-factors to BITa maturity.

4. Is there a difference in BITa between the bank-ing sector and the health care sector?

The research was conducted in the banking- and health sector. Differences in BITa were expected be-tween organizations using IT in their primary pro-cesses (banks) and organizations usually using IT in their secondary processes (health care). Also, it was expected that in organizations whereas IT is mainly involved in the primary process, the business is more involved in contributing to successful BITa.

In addition, it was decided to study two different sectors to develop scientific knowledge on the stud-ied constructs in both sectors. It was aimed to devel-op generic knowledge to increase the

generalizabil-ity of this research over at least two sectors.

3.3 Research design

The identification of how existing BITa success fac-tors, applicable to the business, are utilized in prac-tice and how they contribute to successful BITa re-quired both a qualitative and quantitative study, a mixed design research type was therefore chosen. Four broad steps were involved in this research: (1) building literature foundation; (2) qualitative study: getting insight into how existing factors by the busi-ness are utilized in practice; (3) quantitative study: examining relation between sub-factors and BITa maturity; and (4) drawing conclusions. These steps, and the specific activities within each step, are summarized in figure 4 and discussed briefly below.

Step 1. Building literature foundation. Recogniz-ing that existRecogniz-ing literature provides the foundation for this research, an extensive literature review was conducted. The completeness of the scientific arti-cles used in this research is one of the aspects con-tributing to the quality of this research. Three search strategies were used to gather relevant articles. First, Figure 4. Research approach

Step 1. Building literature foundation.

Step 2. Qualitative study: get-ting insight into how exisget-ting factors by the business are uti-lized in practice.

Step 3. Quantitative study: ex-amining relation between sub-factors and BITa maturity.

Step 4. Drawing conclu-sions.

2.4: Analyze interviews (§5.3)

•Systematically analyze and extract utilized fac-tors from interviews.

1: Build theoretical foun-dation (§2)

• BITa definitions • BITa frameworks

• BITa maturity and suc-cess

• BITa success factors

2.2: Formulate interview questions (§5.2) •Objective: identify how

BITa factors are being utilized in practice. •Systematically formulate interview questions. •Pre-test semi-structured interviews. 2.3: Conduct interviews (§5.2) •Conduct interviews among 14 organizations in banking and health care.sector.

2.1: Identify factors using questionnaire (§4) •Conduct questionnaire

among experts to extract most important factors.

3.1: Measure BITa ma-turity (§6.3)

•For each interview the

BITa maturity of the or-ganization was measured.

3.2: Compute relation be-tween new sub-factors and BITa maturity (§6.4) •Correlation was

comput-ed between identificomput-ed sub-factors and BITa ma-turity using T tests.

4: Drawing conclusions (§8)

•Conclusion on what ways and to what extent the business contributes to successful BITa.

3.3: Examine difference between banking- and health sector (§7) •Based on computed

cor-relations and other find-ings, the differences are analyzed.

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the annotated bibliography of Chan & Reich (2007) was used, providing summaries of 150 BITa articles. Second, searches for well-known authors in the field of BITa were conducted, also the main selection cri-teria was the relevance of the articles for this re-search. Finally, articles were found using the so-called snowball methodology.

Chapter two of this research contains the theoreti-cal foundation, which covers BITa definitions, frameworks, success factors, and BITa maturity. High BITa maturity is expressed as successful BITa. A specific focus has been given to how existing BITa success factors are utilized in practice.

Step 2. Qualitative study: getting insight into how existing factors, by the business, are utilized in prac-tice. This step covers the qualitative study of this re-search, which entails four activities. In the first ac-tivity (2.1), the 10 most important factors extracted from literature were identified using a questionnaire (§4). Based on the 10 most important factors, inter-view questions were systematically developed in ac-tivity 2.2 (§5.2). In acac-tivity 2.3, interviews were conducted among banks and organizations in the health care sector (§5.2). Activity 2.4 covers the analysis of the conducted interviews, which can be found in §5.3.

Step 3. Quantitative study: examining relation be-tween sub-factors and BITa maturity. The objective of this step was to examine which sub-factors, iden-tified from the interviews, do have a positive impact on BITa maturity. In activity 3.1, BITa maturity was measured among interview participants (§6.3). Based on the identified sub-factors and BITa maturi-ty, statistical analysis computed relations between the sub-factors and BITa maturity (§6.4). Finally, in activity 3.3 the banking and health care sector were examined and compared (§7).

Step 4. Drawing conclusions. Based on the con-ducted research determining how BITa factors, per-formed by the business, were utilized in practice and how these newly identified sub-factors correlate with BITa maturity a conclusion was drawn, includ-ing limitations, and possibilities for further research.

4 IDENTIFYING MOST IMPORTANT

BUSINESS-IT ALIGNMENT SUCCESS FACTORS

4.1 Selecting business’ Business-IT alignment success factors

In paragraph 2.5 BITa success factors were de-scribed, resulting in 110 unique success factors ex-tracted from literature. This is a relatively high num-ber to study within the limited timeframe of this research. Therefore, it was decided to focus on at least 10 of the most important BITa factors.

Since the 110 identified factors contain both business and IT factors, allocation of the factors to either business or IT was pursued by a systematic approach. First, the factors were provided with a unique code for convenient referencing purposes. Second, the factors were each allocated to the cate-gories: business, IT or business/IT based on the tor’s responsibility with the objective to identify fac-tors applicable to the business. For example the factor “Understanding of business by IT” is a factor implying responsibility for IT to get a better under-standing of the business. This factor was therefore allocated to “IT”. Third, based on the previous allo-cation, the factors were assessed on whether they were indirectly or directly applicable to the business. For example the former factor “Understanding of business by IT” suggests IT responsibility, but might demand the business to help IT in getting an under-standing of what the business does, the factor is therefore business’ indirect responsibility. This analysis can be found in appendix A.

As a result of the analysis, 77 factors applicable to the business were identified. In order to identify the 10 most important success factors a question-naire was developed containing 77 factors, the ques-tionnaire can be found in appendix B. The 77 factors were randomly ordered, to prevent the possibility of tracing back the natural order, proposed by the au-thors. To determine the 10 most important factors out of the 77, 11 Quint Wellington Redwood experts

# Code Factor Mean (n=11) Variance

1 LFT1999-1 Senior executive support for IT 4.64 0.255

2 REI2000-3 Level of communication between business and IT executives 4.54 0.273 3 TEO1999-1 Top management is committed to the strategic use of IT 4.45 0.273

4 LFT1999-2 IT involved in strategy development 4.27 0.818

5 LFT2000-1 Understanding of Business by IT 4.27 0.618

6 TEO1999-9 The IS department is responsive to user needs 4.18 0.564 7 CHN2002-1 CEO and CIO have a strong working relationship 4.18 0.364 8 HUA2007-3 Developing strong relationships between IT and business 4.18 0.364

9 LFT2000-2 Understanding of IT by Business 4.18 0.764

10 TEO1999-7 Business and IS management work together in partnership in prioritizing applications development

4.09 0.491

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in the field of BITa, IT Governance or Information Management rated the factors on relevancy using a five-point scale, ranging from 1 = unimportant to 5 = very important.

4.2 The 10 most important success factors

The results of this small questionnaire are displayed in table 1. The table contains the 10 most important BITa factors based on their high mean scores and relatively low variances. A comprehensive overview of the results can be found in appendix C. After all, the most important factors have a mean score ≥ 4.09 and do have a relatively low variance compared to other factors having a lower mean score. Three fac-tors, despite having a mean score of 4.0 and relative-ly low variances, were not included in the list as they covered some of the already selected factors. The remaining factors, each having a mean score below 4.0, were considered less critical than the other fac-tors.

Taking a look at table 1, similarities were found among the factors. This seems obvious since several authors suggested factors that are similar. For exam-ple factor 1 and 3 of table 1 both indicate the com-mitment of top management. Based on the found similarities the 10 factors were reduced to 5 unique factors left over for utilization. These 5 unique fac-tors were named factor categories and can be found in table 2.

5 HOW BUSINESS-IT ALIGNMENT SUCCESS FACTORS ARE UTILIZED IN PRACTICE 5.1 Introduction

Since the identified BITa success factors are reduced to 5 unique factor categories. Interviews were used to identify new sub-factors within each factor cate-gory to provide an explanation on how each factor category is utilized in practice. This chapter discuss-es how the interviews were developed, conducted and analyzed. As a result, sub-factors are proposed providing insight in how the five factor categories are utilized in practice.

5.2 Interview approach

5.2.1 Semi-structured interview

As stated earlier, existing BITa success factors lack insight in how they are utilized in practice. This de-mands for a qualitative study allowing to get an in depth understanding of the existing factors. A semi-structured interview approach was therefore chosen, allowing the interviewer to have an interview guide serving as a checklist of topics to be covered and a default wording and order for the questions, but the wording and order were often modified based on the flow of the interview, and additional unplanned questions were asked to follow up on what the par-ticipant said (Robson, 2011).

5.2.2 Development of interview structure and ques-tions

Since interviews play a key role in this research, ex-plicit attention has been paid to the development of the interview structure and questions. For the re-searcher to get a clear understanding of the organiza-tion, all interviews started with the question how the governance structure was implemented. This helped both the researcher and the participant to get on the same page and helped putting the interview ques-tions into context.

The interview questions were systematically de-veloped to provide a guided set of questions related to how the factor categories are utilized in practice. To stimulate a more in-depth interview several sub-questions were formulated.

The formulated interview questions concern facts and behaviors. Facts and behaviors are relatively easy for the participant to get at, although errors can occur due to lapses in memory or to response biases of various kinds (e.g. a business manager talking negative about the IT department, or vice versa). To mitigate this risk, specific things or examples in the present or recent past were asked. In validation of the developed interview questions two test-interviews were conducted to test the interview out-line and it helped the researcher to get familiar with the interview outline. The interview outline

includ-# Codes Factor

1 LFT1999-1, TEO1991-1 Senior executive support and strategic use of IT 2 LFT2000-1, LFT2000-2 Mutual understanding between business and IT

3 CHN2002-1, HUA2007-3 Developing strong relationships between business and IT on both strategic and operational level.

4 LFT1999-2, TEO1999-7, TEO1999-9

Involving IT in strategy development and working together with the business in prioritizing applications development and being responsive to user needs.

5 REI2000-3 Level of communication between business and IT executives.

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ing the interview questions can be found in appendix D.

5.2.3 Participant selection

Interviews were conducted among 14 organizations, 9 banks and 5 health care institutions, mainly hospi-tals, and took one hour each. The banking and health sector were chosen, since a difference in how factors are utilized in practice and BITa maturity between those sectors was expected. Participants in the inter-views were both business and IT executives to in-crease reliability. In both cases the business’ role was still subject to the interview. Participants were contacted via Quint Wellington Redwood’s account managers, which provided access to high-level ex-ecutives in both sectors. Due to privacy reasons the names of the interview participants and organiza-tions are not documented in this research.

5.2.4 Data collection

All interviews were audio recorded and one-on-one between participant and researcher. Afterwards, an anonymously summary of the interview was written by the researcher, subsequently reviewed and ap-proved by the participant to make sure the researcher correctly interpreted the gathered information. The majority of the interviews, 12 out of 14, were held at the participant’s working-environment since the re-searcher did not want any possible commercial thoughts at the Quint office to influence the outcome of the interview. On request of 2 participants the in-terview was held at the Quint office. The inin-terview summaries can be found in appendix E. 5.2.5 Data analysis

The objective of the interview data analysis was to extract sub-factors or actions explaining how the earlier defined 5 factor categories are utilized in practice. The analysis used a systematic approach consisting of four steps, which are discussed below.

First, the interviews were printed and gone through with a yellow marker. All sub-factors or ac-tions, which were initiated by the business and rele-vant for BITa were highlighted.

Second, a fellow student reviewed whether all relevant sub-factors were extracted from the sum-maries or not, some adjustments were made.

Third, the highlighted sub-factors were concre-tized into correct Dutch, and put in a spreadsheet. For referencing convenience each factor was provid-ed with a unique identifier consisting of the follow-ing syntax <sector BNK (bank) or HEA (health care)-<interview number>-<factor in interview>,

for example BNK-1-1 refers to interview number 1, which was a bank and the first sub-factor found in the interview summary.

Fourth, all extracted sub-factors were allocated to one of the five factor categories by using a printed version of the spreadsheet; each sub-factor was cut out en allocated to one of the five factor categories.

As a final step, similar sub-factors were grouped into one sub-factor. This was done by a systematic review approach with a fellow student. Each sub-factor was discussed on being in the right sub-factor cat-egory and grouped with other sub-factors based a four criteria: (1) each sub-factor should have the same intention, (2) sub-factors address the same phenomena, (3) initiated by the same party, and (4) context of the sub-factor. Some sub-factors were de-cided not being a sub-factor after all, due to a variety of reasons. For example, the sub-factor was after all initiated by IT and not by business.

As a result, 30 unique sub-factors representing how the factor categories are utilized in practice re-mained and are displayed in table 3. The actual analysis including the underlying factors can be found in appendix F.

5.3 Interview results

The interview results provide insight in how the fac-tor categories are utilized in practice. This means that sub-factors, found in the interviews, explain how the factor categories, and therefore the factors identified from literature, are utilized in practice. The following paragraphs provide some randomly selected examples of sub-factors explaining these factor categories.

The factor category “Senior executive support and strategic use of IT”, might mean that BITa is continuously on the agenda of the executive board. It can also mean that a specific executive board mem-ber has a dedicated focus on IT.

The second factor category “Mutual understand-ing between business and IT”, is encouraged by placing the functional management department physically in the same department as the business. But, also the business that actively involves IT in business processes to increase IT’s business knowledge. Business being aware of IT’s added val-ue might also be critical to a proper mutual under-standing between business and IT.

The third factor category “Developing strong re-lationships between business and IT on both strate-gic and operational level” can be achieved by active-ly involving each other in their operation. The business can also be primarily responsible for the business process including IT, which turns out to en-courage the relationship between business and IT since the business depends on IT.

The forth factor category, “Involving IT in strate-gy development and working together with the

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busi-15 ness in prioritizing applications development and be-ing responsive to user needs”, can be utilized to in-volve IT early in strategic planning, but also moni-toring the IT portfolio closely.

Finally, the fifth factor category, “Level of com-munication between business and IT executives”, by being transparent in their communication about plans might encourage the level of communication. Also, the informal organizational structure turns out to be essential in encouraging the level of communi-cation. A diluted governance structure increases the communication between the governance layers. This also demands more abstract plans to make sure eve-ry stakeholder in each governance layer is aware of what’s going on.

The complete list of sub-factors giving insight on how the factor categories are utilized in practice can be found in table 3.

5.4 Conclusion

This chapter provided an answer to the question “How are existing Business-IT alignment success factors applicable to the business utilized in prac-tice?”, which was sub-research question 2. Existing BITa success factors were identified in chapter 4 and determined how they are utilized in practice in this chapter.

As a result, 30 new sub-factors have been identi-fied which are displayed in table 3. The factor cate-gory “senior executive support and strategic use of # Factor

1. Senior executive support and strategic use of IT

1 Business-IT alignment is high and continuously on the agenda of the executive board. 2 Executive board member with a dedicated focus on IT.

3 Executive board member without a dedicated focus on IT, not main responsibility.

4 Executive board considers IT to be an integral part of the organization and has structured it accordingly. 5 Executive board is positive about IT and spreads the message.

6 Executive board is visible on the work floor, able to detect and solve Business-IT alignment problems. 7 The executive board is actively involved in market opportunities based on new technology.

8 Executive board uses IT as an innovation enabler by using a strategy based on the strategic use of new technology. 9 Executive board uses IT as a vehicle for cost reduction.

10 Strategic use of IT to accomplish competitive advantage. 2. Mutual understanding between business and IT

11 Functional management is part of the business.

12 Business and IT realizes they both have the same objectives and are working for the same customer. 13 Business involves IT in business processes to increase IT’s business knowledge.

14 Outsourcing and demand-supply organizations forces business to think and formulate requirements. 15 Business is aware of IT’s added value.

16 Culture involving respect for each other’s knowledge to increase collaboration between business and IT. 17 Support for IT is created due to strategic formulation of accurate objectives.

18 Dedicated department focuses on alignment between business and IT.

3. Developing strong relationships between business and IT on both strategic and operational level. 19 Business and IT find each other easily by involving each other in their operations

20 Business is owner of processes and therefore responsible for IT. 21 Methodology Scrum let’s business and IT work closely.

4. Involving IT in strategy development and working together with the business in prioritizing applications devel-opment and being responsive to user needs.

22 Clear IT roadmap, partly established by the business, contributes to the IT direction of the organization. 23 Functional changes arise from key-user groups.

24 The business involves IT early in information planning development. 25 Business-IT alignment is a continuous focus in policy plans and strategy. 26 Executive board monitors IT portfolio closely.

5. Level of communication between business and IT executives.

27 Business and IT are both transparent in their communication and plans, resulting in same priorities. 28 Informal organizational structure contributes to increased business-IT alignment.

29 Business’ initiative in formulating new functionalities or IT support.

30 Diluted governance structure increases communication between governance layers, which results in improved alignment.

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IT” turns out to contain the most newly identified sub-factors, 10 in total.

6 FACTORS LEADING TO SUCCESSFUL

BUSINESS-IT ALIGNMENT 6.1 Introduction

Can some of the newly identified sub-factors predict mature BITa? This chapter researches the relation between the identified sub-factors and BITa maturity with the objective to identify which sub-factors are predictors for mature BITa.

6.2 Analysis approach

In an effort to identify which factor are predictors for mature BITa a two step approach was performed (1) the interview participants assessed the BITa ma-turity of their organization, and (2) the relationship with BITa maturity and each sub-factor was ana-lyzed using independent sample T tests. Prior to the tests, a linear regression test was performed to exam-ine whether the identified sub-factors have a rela-tionship with BITa maturity.

6.3 Measure Business-IT alignment maturity

BITa maturity was measured using an existing ques-tionnaire by Luftman et al. (2003), which was intro-duced in chapter 2. The first version of the question-naire dates from 2000; an updated version was published in 2003. The updated version was used in this research and can be found in appendix G.

Each interview respondent filled out a copy of the survey, allowing the researcher to connect BITa ma-turity to the identified sub-factors. The survey con-tained 37 items covering different BITa criteria. Each criterion has five possible answers regarding the criteria. The answers ranged from an immature answer, given the score of 1, up to a mature answer given the score of 5. The average of all answers pro-vided the BITa maturity of the organization, which obviously was a number between 0 = immature and 5 = very mature. The results of the BITa maturity questionnaire can be found in table 4.

Organization Score Bank 1 3,05 Bank 2 3,68 Bank 3 2,51 Bank 4 2,92 Bank 5 3,63 Bank 6 3,51 Bank 7 3,73 Bank 8 3,81 Bank 9 3,05

Health care organization 1 2,05

Health care organization 2 2,59

Health care organization 3 1,86

Health care organization 4 2,43

Health care organization 5 2,22

Table 4. Business-IT alignment maturity among interviewed organizations.

6.4 Factors leading to successful Business-IT alignment

Prior to the analysis on which factors lead to suc-cessful BITa, it was examined whether the identified sub-factors do have a relation with BITa maturity at all. A linear regression analysis was performed to model the relationship between the dependent varia-ble, BITa maturity, and the independent variable the amount of factors present in an organization. Two hypotheses were therefore formulated: H0 arguing

that the amount of factors present in an organization does not affect BITa maturity, and H1 arguing that

the amount of factors present in an organization does affect BITa maturity. The computed regression model shows a correlation of 0,704, which is rela-tively high. Performing a F-test on the regression model a P-value of 0,005 was computed, which is less than the significance level of 0,05. Therefore, enough evidence exists to reject H0, and assume that

the amount of sub-factors present in an organization affects BITa maturity positively. The analysis can be found in appendix H.

Note: the model presents a regression formula of

BITa maturity =0,125 * amount of factors + 2,130. This implies that having zero sub-factors present BITa maturity will be 2,130. Due to the scope of this research, no further research was conducted to clari-fy this.

For each sub-factor identified in chapter 5 it is tested whether its presence significantly contribute to successful BITa. The presence of a sub-factor can basically be divided in two groups, (1) a group of organizations in which the sub-factor is present and (2) a group of organizations in which the sub-factor is not present. This gives the opportunity to compare the BITa maturity means for both groups in order to determine whether a sub-factor significantly con-tributes to BITa maturity. Therefore, an independent sample T test was performed to test each sub-factor on its significant contribution to successful BITa.

Since 30 sub-factors have been identified, the T test was performed thirty times, for each factor sepa-rately. The independent variable was the sub-factor, whether the sub-factor was present or not, creating the two groups. The dependent variable was BITa

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maturity. Two hypothesis were formulated for each factor test: H0: µ1 = µ2, and H1: µ1 ≥ µ2, in which µ1 = the mean of BITa maturity of organizations where the factor is present, and µ2 the mean of BITa ma-turity of organizations where the factor is not pre-sent. For the factors that were only present at one organization, a one-sample T test was performed us-ing H0: µ = BITa maturity of the organization with this factor, and H1: µ ≤ this maturity number to ex-amine whether the mean BITa maturity of the organ-izations without the sub-factor was significantly lower than the BITa maturity of this one organiza-tion. For both tests an alpha of 0.05 was used. These tests were performed one-tailed, due to the fact that these sub-factors where identified as contributors to BITa according to the interview participant. There-fore, it was only tested whether the sub-factors are useful to implement or not, and not whether they might work contradictive.

As a result, based on the relatively small dataset, the analysis allows us to reject the 0-hypothesis with 12 of the 30 sub-factors, which means that the aver-age BITA maturity of organizations with this sub-factor present is significantly higher than the BITa maturity of organizations without this sub-factor. This implies that these 12 sub-factors contribute to successful BITa. These 12 sub-factors are displayed in table 5 and sorted on their p-value. The complete analysis including SPSS output can be found in ap-pendix H.

6.5 Conclusion

This chapter provided an answer to the question “Which newly identified sub-factors contribute sig-nificantly to Business-IT alignment maturity?”, which was sub-research question 3. The performed regression analysis shows that the amount of sub-factors present in an organization contributes to suc-cessful BITa by increasing BITa maturity.

Further-more, each sub-factor was tested using a T test to de-termine whether organizations in which the sub-factor was present compared to organizations, in which the sub-factor was not present, score signifi-cantly higher on BITa maturity. Based on those sults it can be assumed that, according to this re-search, the sub-factors displayed in table 5 significantly contribute to BITa maturity, and there-fore BITa success.

7 BANKING AND HEALTH CARE 7.1 Business-IT alignment maturity

As stated in chapter 3, it was chosen to study a sec-tor in which IT is part of the primary process, bank-ing, and a sector in which IT is part of the secondary process, health care. Based on the BITa maturity da-ta the difference in BITa maturity was tested using an independent sample T test using an alpha of 0,05.

Two hypothesis were formulated: H0: µ1 = µ2, and H1: µ1 ≥ µ2, in which µ1 = the mean of BITa maturity in banking (3,32), and µ2 the mean of BITa maturity in health care organizations (2,23). Because the p-value 0,0 < 0,05 there is enough evidence to reject the H0 hypothesis. Therefore it can be concluded that BITa maturity in banking is significantly higher than in health care.

7.2 Presence of total sub-factors

In addition to previous test, it is expected that bank-ing are havbank-ing significantly more sub-factors present than health care. Therefore, another independent sample T test was performed using an alpha of 0,05.

Two hypothesis were formulated: H0: µ1 = µ2, and H1: µ1 ≥ µ2, in which µ1 = the mean of present fac-tors in banking (8,11), and µ2 the mean of facfac-tors of present in health care organizations (3,40). Because

# Factor p-value

15 Business is aware of IT’s added value. 0,000

6 Executive board is visible on the work floor, able to detect and solve Business-IT alignment problems. 0,001 16 Culture involving respect for each other’s knowledge to increase collaboration between business and IT. 0,001 17 Support for IT is created due to strategic formulation of accurate objectives. 0,001 28 Informal organizational structure contributes to increased business-IT alignment 0,0015 18 Dedicated department focuses on alignment between business and IT. 0,002 27 Business and IT are both transparent in their communication and plans, resulting in same priorities. 0,002 10 Strategic use of IT to accomplish competitive advantage. 0,003 13 Business involves IT in business processes to increase IT’s business knowledge. 0,003

2 Executive board member with a dedicated focus on IT. 0,0035

21 Methodology Scrum let’s business and IT work closely 0,016

4 Executive board considers IT to be an integral part of the organization and has structured it accordingly. 0,018

Figure

Figure 1. Strategic Alignment Model .

Figure 1.

Strategic Alignment Model . p.6
Figure 2. Four alignment perspectives.

Figure 2.

Four alignment perspectives. p.7
Figure 3. Generic framework for Information Management

Figure 3.

Generic framework for Information Management p.9
Figure 4. Research approach  Step 1. Building literature  foundation.

Figure 4.

Research approach Step 1. Building literature foundation. p.11
Table 1. The 10 most important factors according to experts

Table 1.

The 10 most important factors according to experts p.12
Table 4. Business-IT alignment maturity among interviewed organizations.

Table 4.

Business-IT alignment maturity among interviewed organizations. p.16

References