Influence of business-IT alignment on IT projects: A case study

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Influence of business-IT alignment on IT projects:

A case study

Gijsbert de Boer

University of Amsterdam

Faculty of Science

Student number: 10280464

gijsbert.deboer@student.uva.nl

Thesis to obtain the degree of Bachelor of Science

August 2015

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Business-IT alignment and innovation are the top concerns for IT executives. Business-IT alignment can be compared with a gearbox: every cog has to grip firmly into its counterpart to keep the whole running smoothly. To be able to measure alignment, Luftman (2000) developed the business-IT alignment maturity model, which is widely accepted and used in many large organizations.

Many definitions of innovation from di↵erent perspectives exist. This lead Baregheh et al. (2009) to study whether a multi-disciplinary definition of an innovation process could be de-rived. It shows that IT projects generally match the definition of this innovation process. It is therefore argued that most IT projects are innovative to a certain level.

In this study, the business-IT alignment maturity of Tata Steel Europe is measured as a case study. The business-IT alignment maturity was found to be assessed significantly higher by IT personnel than business personnel. It was also found that the average maturity per criterion is significantly lower than the average of peer manufacturing organizations.

Additionally the influence of alignment maturity on IT projects was assessed. For this assess-ment, six project managers were found willing to fill in a questionnaire. Using this question-naire, the influence of each of the business-IT alignment criteria was measured during each of the five Prince2 project phases. The project managers were asked to assess the influence of the criteria on a -5 to 5 Likert scale for two situations: one in which maturity was very low, and one in which maturity was very high. It was found that communication has the largest influence on the progress of projects. Partnership was found to have the second largest influence. Of the five projects phases, the execution phase was most influenced by business-IT alignment. These findings support the observation by Chan (2002), namely that the role of the informal organization is more important than previously acknowledged. Second, it is concluded that to increase innovation, increasing communication and partnership maturity should be prioritised.

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1 Introduction

This research tries to measure and increase IT innovativeness within Tata Steel Europe (TSE). Tata Steel Europe is Europe’s second largest steel maker and employs about 40.000 people all across Europe, of which approximately 650 work at the IT department. One of the main challenges for managers at the IT department is innovation. A large steel making organization (or any other machine bureaucracy) tends to focus on its technical core, on standardizing processes and increasing production stability (Mintzberg, 1989), leaving little room for error and thus for innovation by trial-and-error. This is no di↵erent for many other large manufacturing organizations.

Although much has been written about organizational innovation, none of it o↵ers a clear way of increasing innovation within the strict boundaries that come with an organization like the one described above. In this paper, we use our own interpretation of innovation. Assuming that every project tends to improve the company in some way, we measure innovation as the increase in amount of successfully executed IT projects. According to this definition, increasing innovation is a matter of increasing the number of successfully executed IT projects per year.

This increase can be achieved in multiple ways, of which increasing the project budget would be the most obvious one. This research opts for another approach by defining improvement areas. Measuring business-IT alignment (also known as strategic alignment) has been acknowledged for this purpose. These measurements are commonly done at the enterprise level, e.g. for the entire company. If they can be performed at project level, we might be able to identify a trend in which criteria are scoring good and bad and thus are enabling and inhibiting IT projects. Acting upon these trends will then likely lead to an increase in successfully executed projects and thus to an increase in innovativeness.

1.1 Business-IT alignment

Business-IT alignment is the measure to what extent business and IT strategies and goals are aligned. Business and IT often have mismatching demands and capabilities. The business for example might want to use consumer tools like Dropbox, while IT is then no longer able to guarantee the security of company data, thus unable to comply with the business demand. Or, IT might be knowing of a new technology that enables or drives business strategy, while the business is sceptical. Henderson and Venkatraman (1993) are seen as the first to denominate the problem of alignment. They recognized that IT was no longer limited to simple administrative tasks and described the need for a fundamental framework to understand the potential of IT for organizations. Their strategic alignment model conceptualizes and models this problem. The model, as seen in figure 1, encompasses four key areas: business strategy, organizational infrastructure and processes, IT strategy and IT infrastructure and processes.

They argue that the inability of organizations to realize value from IT investments is the result of a lack of alignment between these four areas. A lack of alignment between business and IT strategy results in a lack of alignment between business- and IT processes and infrastructure. A dynamic market however makes it difficult to align strategy, processes and infrastructure; let alone maintain a state of full alignment. Customers, competitors and regulations force an organization to constantly adapt to the changing circumstances. This makes it a particularly challenging problem for many business- and IT executives.

As a result, business-IT alignment has been a top concern for both business and IT executives for the past 30 years (Henderson and Venkatraman, 1993). Today it still is: in a 2012 survey, IT

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Figure 1: Strategic alignment model by Henderson and Venkatraman (1993)

and business alignment turned out to be the second most important IT management concern, after being number one in 2011 and number three in 2010. In the years up to 2003, it ranked one and two variably (Luftman and Derksen, 2012).

This perception of importance is not surprising. Besides realizing value from IT investments, several studies have shown that a higher state of business-IT alignment is linked to better organizational performance (Nash, 2006; Dorociak, 2007).

1.1.1 Alignment maturity

As a result of a fast changing technology landscape, businesses are struggling with business-IT alignment. In order to be able to measure and compare alignment levels for di↵erent organizations, Luftman (2000) developed the strategic alignment model, which can be used to measure to what extent business and IT are aligned: the alignment maturity. This model discerns six alignment criteria:

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1. Communication 2. Value measurement 3. Governance

4. Partnership

5. Scope & architecture 6. Skills & competences

Each individual criterion encompasses several components which are to be assessed and together make up the score for the criterion. The components of these criteria can be found in figure 2.

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Communication Good communication is a prerequisite to achieve alignment. One can not align IT and business if one or both sides are unable to communicate their wishes and demands, share knowledge and insights or lack a general understanding of either area. Communication can be seen as the tunnel through which alignment has to be achieved.

Competency/value measurement Alignment should eventually result in an increase of firm performance. An increase in performance however requires a definition of performance. When IT was used primarily for administrative tasks, these measures were primarily technical. The extent to which IT enables or drives business strategy requires more dimensions of performance to be taken into account.

Governance When the capabilities of IT are not recognized by managers, achieving high align-ment will be difficult. To allow IT to enable and drive business strategy, tactic and strategic planning for both business and IT has to be done in conjunction. It requires an environment in which IT is not just seen as a service department but a fully fledged part of the business.

Partnership Partnership is key in enabling both business and IT to maximize each others value and possibilities. Like a supporting and enabling governance structure, partnerships between busi-ness and IT are crucial to transfer knowledge and get things done. A state of high alignment requires a trustful relation and shared risks and rewards.

Scope and architecture The scope and architecture of IT determine the extent to which IT is ready to enable and drive business strategy. In a state of low alignment, the scope of IT is very limited, while in a state of high alignment, IT truly is a fundamental part of business strategy. This criterion also encompasses the extent to which IT systems are integrated and architecturally transparent.

Skills Without sufficient skills, alignment will be difficult to achieve. Entrepreneurship and career-crossover should thus be encouraged. Hiring and retaining of sta↵ also plays an important role.

Each of these components has to be assessed on a level of one to five, with one being a initial/ad-hoc process and five being a optimized process. An optimized process should be seen as a state in which business and IT are co-adaptive: they adapt to each others changes to stay aligned.

This model was used by Luftman to measure the alignment maturity of several large organizations in 2000 and again in 2007. Results showed that the alignment maturity of these organizations gen-erally was at a level 2 in 2000 and at level 3 in 2007, although di↵erences existed between di↵erent industry types (Luftman, 2000; Luftman and Kempaiah, 2007).

Several academic studies suggested a relation between alignment maturity and organizational per-formance, as summarized by Luftman et al. (2008). It is difficult however to prove that such a correlation is solely admissable to business-IT alignment, since large organizations are subject to a multitude of non-controllable factors influencing their performance. On top of that, while it is understood that a high alignment maturity increases the results of an organization, the path to a fully aligned organization often is unclear. Some argue that alignment is no finite, co-adaptive state but rather an increasing fusion between business and IT (Hinssen and Derynck, 2009).

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Figure 3: Levels of alignment by Luftman (2000)

1.1.2 Achieving alignment

Substantial research has been done on business-IT alignment, measuring its maturity and the relation between alignment maturity and business performance. However, little research has been done on the e↵ects of alignment maturity on the workfloor: how are projects and day-to-day operations e↵ected by alignment maturity? What are the exact e↵ects on the low-level organization when alignment changes? Knowing the alignment maturity of an organization is a snapshot: it tells us how aligned an organization is at a specific moment. To be more precise, in the context of an organization: we know how mature we are, but we don not know how changes to this maturity are going to work out in practice. What are the requirements for these changes and what will they lead to? This is a problem many managers face and struggle with. This might be due to fact that the academic world has, to the best of our knowledge, not yet reached consensus on whether alignment is a finite state or an ongoing process. Predicting and measuring the low-level impact of changes to the maturity of an organization can though result in very interesting insights. For example, the IT

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department of an organization might be executing three IT-projects simultaneously in collaboration with the business with a total combined cost of 25 million euros. If we can conclude that during these projects, communication can be either a gigantic showstopper or enabler, we can focus on increasing the maturity of this criterion, knowing that it will likely save the organization time and money. By measuring this and acting upon it, we enable organizations to tackle points one and three on the IT management concerns list too (see Luftman and Derksen, 2012).

1.2 Innovation

The need for organizations to innovate has been identified long ago and is nowadays generally acknowledged as one of the key elements to organizational survival. However, no clear definition exists. The wealthy amount of definitions of innovation lead Baregheh et al. (2009) to study if a multidisciplinary definition of innovation could be derived. They came up with a definition that spans most aspects of innovation, as shown diagrammatically in figure 4.

1. Stages

The model describes five stages of innovation: creation, generation, implementation, develop-ment and adoption. The stages thus range from the generation of an idea to the implemen-tation and adoption of this idea. This is no di↵erent in IT projects, especially when executed using the Prince2 project management method. This method too uses five stages, which too range from the generation of an idea to the implementation and adoption.

2. Social

An innovation has to be implemented and used by employees, customers or external partners. Again, this is no di↵erent for IT-projects.

3. Means

The final product of an innovation process is a new technology, an idea or invention. The means or final products of an IT project are similar: the use of the cloud, a new way of working (bring your own device) or the use of mobile solutions can thus be seen as the means of an innovation process.

4. Nature

Like an innovation process, an IT project has a certain nature: the project introduces some-thing new, improves an existing product or process or makes a change as for example required by government regulation.

5. Type

Every IT project has one or more deliverables of a certain type. These deliverables can either be a new project, a service, a process or a technical improvement of some sort.

6. Aim

Lastly, a machine bureaucracy usually has a governance structure that requires a solid business to be presented before the start of the project. A project needs to show its purpose: it must either succeed an old or legacy solution, allow the company to di↵erentiate from competitors or increase its competative position.

IT-projects show large similarities with the innovation process described by the diagram. The six key elements of the innovation process all reflect key elements of IT projects. It is therefore believed

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that the assumption of this study that every IT-project is in some way contributing to innovation is backed by the work of Baregheh et al. (2009).

Figure 4: Multi-disciplinairy definition of the innovation process by Baregheh et al. (2009)

1.3 Aim of this study

The aim of this study is dual: first of all knowing whether the size of the influence of the alignment maturity criteria can be measured on the tactical/operational level instead of at the enterprise level. Secondly, knowing if the direction of this influence can be measured: will increasing the maturity actually have a beneficiary influence? Based on the scope of this study, this research should be seen as a case study and in need of more thorough testing to be able to generalize on the findings.

1.4 Scope of this study

This study focusses on the IT department of Tata Steel Europe as a case study. Tata Steel is the second largest steel making organization in Europe. Before being acquired by Tata Steel, the company was also known as Corus. Tata Steel Europe employs about 40.000 people, of which roughly 650 are working at the IT department.

Due to the 2008 global crisis and the medium-term e↵ects on the global steel market, the company has been in some rough weather for the past seven years. This has had its e↵ects on internal budgets: departments were facing cutbacks and several business units were sold. Even in 2015, while the company is recovering, it is still feeling the pain of the drop in demand for steel worldwide.

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1.4.1 Tata Steel Europe

According to Mintzberg (1989), Tata Steel Europe can be seen as a machine organization (bureau-cracy). The technical structure of the company is its most important asset, and because of the complex production processes and the impact of a production standstill, the focus of the organi-zation is mainly on standardiorgani-zation and increasing production stability. This has lead to a large managerial overhead. Numerous projects and processes are in place to ensure this stability and standardization. This has lead to an overall stable, but very slow changing organization.

Figure 5: Schematic view of a machine bureaucracy (Mintzberg, 1989)

These organizational characteristics also show in the IT department. For example: while in other industries a trend like bring your own device is becoming increasingly standard, at Tata Steel Eu-rope, this would pose serious risks to the continuity of the production process and would thus be an unacceptable risk. Enterprise software and systems like SAP being monitored closely and changes to these systems are under heavy scrutiny.

This conservative operational environment and market circumstances do not foster a very experi-mental and innovative IT-environment. The IT department is characterized by reactivity: The focus of day-to-day IT operations is mainly on supporting existing systems or adapting to environmental changes. The threat posed by this reactivity, the danger of lagging behind on competitiveness, has been recognized by several IT managers.

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1.4.2 Influence of organizational characteristics on the scope of this study

Due to the incomparable production complexity, organizational structure and operational environ-ment, the results of this study should not be used for other organizational types without further additional testing. While the low-level e↵ects of business-IT alignment might be assessed and acted upon in a machine organization, the results of these actions are possibly very di↵erent for a, for example, professional bureaucracy.

1.5 Prince2

The standard project management framework for IT projects at TSE is Prince21_{. Prince2 derives}

from PROMPT II which was developed by the UK government as the standard method for IT projects. In 1996, Prince2 was released as a generic project management method.

Prince2 allows for a project to be managed, controlled and organized on a high level (Bentley, 2010). It does not encompass low level activities such as scheduling, to-dos, etcetera. It discerns seven high-level processes, used to start di↵erent stages, control them, manage product delivery and managing stage boundaries. Management products generated by Prince2 are a project brief, business case, risk register, quality register, issues register, lessons log and a daily log.

Being a process-based framework, Prince2 is based on five stages: 1. Idea

2. Initiation 3. Start-up 4. Execution 5. Closure

These stages provide a way of comparing the influence of alignment maturity during the course of a project, regardless of project size or duration. During the idea and start-up phase, the request to ’do this’, ’look into that’ or ’fix this problem’ is received. The project manager then transforms this request into a project brief, in which the feasibility of the project and previously learned lessons are incorporated. The deliverables of the start-up phase also include a Project Impact Assessment, in which the impact of a project is assessed.

During the initiation phase the project is in the process of preparation for execution. In this stage, the work that needs to be done in the execution phase is determined and the Project Initiation Document is written. This document contains the information required by management to assess whether the project is in line with the strategic and practical wishes of the company. It provides a clear view on the project in advance of its execution, to prevent all parties from having to take a leap of faith.

During the execution stage, the project products are created and tested. The products of this stage include the detailed designs of the deliverables and a go-live plan, in which the implementation of the project products is described. The execution phase also includes extensive testing of the products of the project.

To prevent a project from going on forever, the closure phase sees to it that a project is closed

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o↵. This prevents a project from being taken into production without proper planning, delivering low-quality products and overrunning budget. During this phase, the project manager will have to verify that all delivered products are as requested, that the organization is capable of supporting these products and the expected benefits are realized. The Tata Steel Europe implementation of

Figure 6: Project Lifecycle Management at Tata Steel Europe - GIS

Prince2 for IT projects can be seen in figure 6. It includes the deliverables and gates projects have to pass through in order to progress.

1.5.1 Relevance of Prince2 to this research

The di↵erent project stages discerned by Prince2 provide a good way of comparing the influence of di↵erent business-IT alignment criteria during the course of a project. Each phase is di↵erent and therefore likely to be influenced by the business-IT alignment criteria di↵erently. On top of that, measuring the business-IT alignment maturity for each of the project phases allows TSE management to solve problems that arise from this measurement more e↵ectively. For example, the execution phase is likely to be one of the longer during and more expensive phases of a project. Knowing the e↵ect of the business-IT alignment maturity criteria on each of the project phases then allows to improve project performance more e↵ectively. Improving project performance will hopefully lead to a higher number of executed projects per year, which then leads to an increased innovativeness, according to our definition of innovation.

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2 Research questions

The main problem this research tries to assess is how the business-IT alignment maturity of a manufacturing company influences day-to-day operations with IT projects in particular. After all, increasing the number of successfully executed IT projects will likely increase the innovativeness of an organization. This has lead to the following research- and sub-questions:

1. To what extent does business-IT alignment maturity influence IT projects at Tata Steel Europe?

(a) What is the current business-IT alignment maturity for Tata Steel Europe?

(b) What is the size of the influence of this maturity on IT projects during each of the five Prince2 project phases?

(c) Will the influence of alignment maturity on projects be positive or negative when the maturity gets higher and lower?

3 Research design

This research exists of two parts. In the first part, the current business-IT alignment maturity of Tata Steel Europe will be measured. The second part, which is most important, will address the influence of alignment maturity during the di↵erent project phases.

3.1 Current business-IT alignment maturity

Luftman (2000) first measured business-IT alignment maturity when he proposed the business-IT alignment maturity model. 25 Fortune 500 firms were assessed, resulting in an average maturity of approximately 2. This maturity is assessed for six criteria at a 5-point Likert scale, ranging from 1 to 5. The overall maturity of a company is the average of the scores of each of the individual criteria.

3.1.1 Questionnaire

The questionnaire used in this thesis is the same as used by Luftman and Kempaiah (2007) and can be found in appendix C.

3.1.2 Selecting participants

The participants selected in this study were senior IT managers and, if applicable and available, their business counterparts. In total, eight IT managers and seven business managers were interviewed. All of them worked on the edge of business and IT.

3.1.3 Conducting interviews

The interviews were conducted together with Marcus Veen, a Tata Steel Europe employee who is currently also in the process of graduating. Due to our research both requiring the current business-IT alignment within TSE, it was decided to do these interviews together.

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The interviews were usually conducted individually during a one hour meeting in which the par-ticipants were briefly introduced to the subject and then talked through the questionnaire. Most participants were able to answer the questions by themselves, some needed a little more explanation.

3.2 Influence of alignment maturity on IT projects

3.2.1 Measuring the influence of business-IT alignment during IT project stages To answer research questions 1b and 1c, both the size and direction of the influence of alignment maturity have to be measured. By ’size’, the size of the change of influence is meant when the alignment maturity changes from one to five. Direction is then whether the influence is positive or negative when increasing alignment from one to five. Unfortunately, it is impossible to execute a project multiple times while assuming ceteris paribus. It was therefore decided to interview those who know most about the project: the IT project managers.

IT project managers were selected based on the projects they managed. Only projects that were recently completed or nearing completion were allowed in this study, as they were probably to be remembered best by the IT project managers. This resulted in a list of six projects, headed by six project managers.

The project managers were then briefed about business-IT alignment as most were not entirely familiar with the model. After being briefed shortly, they were given a sheet describing two hypo-thetical situations. This sheet can be found in appendix E. The first situation is a situation of very low alignment maturity. For each of the alignment criteria, the key indicators of such a maturity were sketched. The second situation is a situation of very high alignment maturity. Again, for each of the criteria the key indicators were provided, allowing the project managers to be able to grasp the two situations. Project managers were then asked to fill in five tables, each corresponding to one of the project phases. An example of these tables can be seen in figure 7.

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Figure 7: Table to be filled in by project managers for execution phase. 1 And 5 are references to the maturity in the hypothetical situations.

Each cell in the table corresponds to the influence this criteria would have had in the corre-sponding situation, relative to the existing situation during the project phase. Project managers were thus asked, for example, ”If the maturity of communication were very immature as sketched in situation one, how would this have influenced your project during this project phase? Would it have been a gigantic showstopper or maybe even make your project go smoother?”. The same was then asked for the very mature situation and the other criteria. This was then repeated for each of the project phases. This influence was to be scored on a scale of -5 (very negative influence) to +5 (very positive influence).

The data collected allows to calculate two things: first, the average size of the influence of a criterion during the project phases. For example, if the influence of communication during the execution phase in the immature situation is -3.5 and in the very mature situation 3, the total width is 6.5. If we know that the total width of value measurement during the same phase is only 3, we can partially conclude that it is wiser to invest in increasing communication. Communication has a larger total width, which either means that it will be a far greater showstopper when alignment maturity drops, much more of an enabler when alignment increases or a combination of both. However, for this to be true, an extra criterion has to be met: it needs to be proven that increasing alignment maturity actually benefits a project. It might for example be the case that a project manager sees governance only as overhead and thus opposes any increase in governance. For this reason, project managers were allowed to score the influence on range of -5 to +5.

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Figure 8: Sample of table after being filled in by project manager

4 Results

4.1 Business-IT alignment maturity

The detailed results can be found in appendix D.

The results show that Business and IT managers score the criteria quite di↵erent, whereby the business scores the criteria consistently lower than IT. The average di↵erence between IT and business is 0.46. Another interesting finding is the gap between TSE average and peer average.

IT Business Delta Average Peers Di↵erence

Communications 2,79 2,21 0,58 2,52 3,22 0,70

Value measurement 2,48 2,14 0,34 2,32 3,10 0,78

Governance 3,25 2,59 0,66 2,94 3,15 0,21

Partnership 3,08 2,36 0,73 2,74 3,30 0,56

Scope and Architecture 2,93 2,51 0,41 2,73 3,17 0,44

Skills and competences 2,32 2,06 0,27 2,20 2,90 0,70

Total 2,81 2,31 0,50 2,58 3,14 0,56

Table 1: Business-IT alignment maturity results for Tata Steel Europe

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Figure 9: Business-IT alignment maturity averaged by IT and business respondents (2007). Even when comparing to 2007 scores, the gap is still quite large. It has to be said though, that average business-IT alignment scores have not increased significantly since 2007.

These scores indicate that business-IT processes within TSE are usually a committed or focused process. This is to be expected within a machine bureaucracy. The strict focus on technical core, standardizing and production continuity do not foster an environment in which optimized processes are very much required, as the production environment is not likely to change often and rapidly.

4.2 Influence of Business-IT alignment maturity on IT projects

In total, seven IT project managers were interviewed about their projects. Although it was tried to interview project managers heading IT projects in as many areas as possible, this turned out to be rather difficult due to busy schedules.

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Figure 10: Average TSE business-IT alignment maturity compared with peers average maturity

5 Analysis

5.1 Business-IT alignment influences the course of IT projects

5.1.1 Largest and smallest influence by criterion

Overall, there seems to be a relation between the maturity of the criteria and the predicted course of IT projects. There also is a clear di↵erence between the di↵erent criteria: communication is con-sequently one of the largest influencers during each of the project phases. This might confirm the findings of Chan (2002) that the informal organizational structure is more important to business-IT alignment than commonly recognized, although there is more to an informal organizational structure than communication alone. The results also show governance to be the least influential criterion during the first three project phases. During the execution phase however, it is one of the three largest influencers. On average, although being the least influential during three of the five phases, it is not the least influential.

The role of governance seems to be in line with two findings. First of all, TSE being a machine bureaucracy, with a strict focus on standardization and production stability. In such an organi-zation, governance plays an important role as many processes and tasks have been standardized. Governance can thus ”make or break” a project: it makes the process very clear, leaving nothing to coincidence. On the other hand, a project might stall due to an overload of procedures that have to be followed. This was lines up with a second finding: some of the interviewees marked the

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Idea Start-up Initiation Execution Closure Criteria 1 5 1 5 1 5 1 5 1 5 Communication -3,00 2,80 -3,00 2,60 -2,60 2,40 -3,17 3,67 -4,00 4,00 Value measurement -1,20 1,20 -1,60 1,60 -2,40 2,20 -1,00 1,50 -1,67 2,00 Governance -1,20 1,80 -1,20 1,80 -1,20 1,60 -2,83 3,33 -2,67 3,33 Partnership -2,80 3,00 -2,40 2,60 -2,40 2,20 -2,33 1,83 -0,33 1,67

Scope & architecture -1,80 1,40 -2,20 1,80 -2,60 2,60 -1,50 2,17 -0,33 0,33

Skills -1,20 1,60 -1,60 2,00 -2,00 2,00 -3,00 2,83 -1,00 1,33

Size of influence 23,00 24,40 26,20 29,17 22,67

Number of projects 5 5 5 6 3

Table 2: Average influence of alignment maturity during project phases

Criteria Idea Start-Up Initiation Execution Closure Average

Communication 5,80 5,60 5,00 6,83 8,00 6,25

Value measurement 2,40 3,20 4,60 2,50 3,67 3,27

Governance 3,00 3,00 2,80 6,17 6,00 4,19

Partnership 5,80 5,00 4,60 4,17 2,00 4,31

Scope & architecture 3,20 4,00 5,20 3,67 0,67 3,35

Skills 2,80 3,60 4,00 5,83 2,33 3,71

Table 3: Size of influence of alignment maturity during project phases (including average)

governance body as being too large and restraining. 5.1.2 Di↵erences between phases

The di↵erences between the criteria per phase can be seen in figures 11, 12, 13, 14 and 15. Results show that the influence of alignment maturity is largest during the execution phase. This is in line with our expectations. Whilst important preparatory work is done during the idea, start-up and initiation phase, most of the work has to happen during the execution phase. This includes testing and delivering of the final product.

The dataset was incomplete about the closure phase. Some of the projects had not reached the closure phase yet, but were running for such a long time already that the project manager might have started to forget about the previous fully completed project. Due to the relatively small role the closure phase has during a project, it was decided to focus on their current project, as better data was preferred over more data. From the results we did get however, the closure phase seems least influenced by alignment maturity. Again, this is in line with the expected. The closure phase merely consists of administrative tasks, such as reporting on budget and final product, which do not necessarily require a high alignment.

5.1.3 E↵ects of changing alignment

Although it is clear how projects would be influenced when the maturity would have been very high or very low, it is not yet known how this influence develops when maturity changes. There does not necessarily need to be a linear relation between these influences. It could also be true

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Figure 11: Influence of business-IT alignment per criterion during idea phase

Table 4: Organizational structural configurations according to Mintzberg (1989)

Structural configuration Prime coordination mechanism Key part of organization Type of decentralization Simpel structure Direct supervision Strategic Apex Vertical and horizontal centralization Machine bureaucracy Standardization of work processes Technostructure Limited horizontal decentralization Professional bureaucracy Standardization of skills Operating core Vertical and horizontal decentralization Divisionalized form Standardization of outputs Middle line Limited vertical decentralization

Adhocracy Mutual adjustment * Selective decentralization

* In administrative adhocracies the support sta↵ are a key component. In operating adhocracies, the operating core is pivotal.

that communication starts to influence a project positively only when it has a maturity level four or higher, or that most of the positive e↵ects start to appear when changing from level 1 to 2.

6 Limitations

6.1 Machine bureaucracy

As described in section 1.4.1, Tata Steel Europe is a machine bureaucracy. A machine bureaucracy di↵ers largely from other organizational types, as can be seen in table 4. Because of these di↵erences, the results found in this study should not be used or applied to other organizational types without further research. It is very well possible that the role of alignment maturity influences projects far less in, for example, a law firm.

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Figure 12: Influence of business-IT alignment per criterion during start-up phase

6.2 Dataset

The dataset of this study was relatively small due to time and practical constraints. Future research should include a larger dataset, possible extending to multiple organizations of the same type. The dataset used in this study might be too small to rule out influence of other factors, unaccounted for in the alignment maturity model.

Due to the limited number of results for the closure phase, more projects including this phase should be tested in future work.

6.3 Briefing project managers

During this research, project managers were briefed shortly on business-IT alignment. Some were familiar with the model used, other were not familiar with the concept at all. As a result, most managers experienced a green field situation. On top of that, they were asked to estimate how their projects would have been influenced in two hypothetical situations, based on the model they are not familiar with. It is unknown to what extent this has influenced the answers. After filling in the questionnaire, they were asked if everything went well and if they were able to fill everything in. None of the project managers experienced major problems while filling in the questionnaire. Due to this green field situation, future research should include a more thorough briefing of project managers on the subject of alignment maturity. They should be familiarized with the concept and model and preferrably be tested on some level of basic knowledge about the model before filling in the questionnaire. This way, knowledge and estimation errors by project managers should be avoided, allowing for less hypothetical results.

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Figure 13: Influence of business-IT alignment per criterion during initiation phase

Another important factor in this research is the fact that the influence is only an estimation: it is estimated by project managers how large this influence would be, but there was no way of validating these answers. As said before, it is impossible to run a project multiple times while keeping all other factors equal. This makes it impossible to rule out any wrong estimations. In this research, only project managers were interviewed about their projects. To rule out any bias and prevent the risk of wrong estimations, other project participants, such as key users, might be included in the interviews.

7 Validation

Three trends were spotted in the results of interviews with the project managers.

1. The influence of the business-IT alignment criteria is largest during the execution phase of the project. The influence grows from project start to the execution phase and then lowers again in the closure phase.

2. Communication and partnership are on average the criteria that influence projects the most. 3. The results seem to be in line with Chan (2002), who suggested that the informal organization is a very important factor in business-IT alignment. It is thus likely that managing the informal organization will help increase project performance within GIS.

The interviewees were asked by email if they recognized these three trends and if they agreed with them. Four of the six interviewees responded and agreed with the trends found, two of the

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Figure 14: Influence of business-IT alignment per criterion during execution phase

interviewees did not respond.

8 Conclusion

The results of this study show that the influence of communication and partnership are on average largest on IT projects. This confirms the findings by Chan (2002), who found that the informal organization plays a larger role in alignment then previously accounted for. Although there is more to the informal organization than communication and partnership alone, it can be seen as an important indicator validating the finding. It is also in line with the findings by de Carvalho (2013), who performed a case study in a large IT service firm and found that although almost all respondents found good communication to be critical to a projects success, almost none of them actually managed communication during projects.

Although the results of this study are limited to a single case, they do provide a new way of looking at alignment maturity. Where previous research on alignment maturity mainly focused on high-level firm performance, this study looks at low high-level e↵ects of alignment maturity on IT projects. Although it can not be concluded that the alignment maturity model by Luftman (2000) is sufficient in describing all factors that influence a project, it does describe most if not all factors that are within the influence of the organization where the project is executed.

For the Tata Steel Europe IT management, this research has shown that the current business-IT alignment is under average and could be improved. Besides the maturity itself, significant di↵erences between IT- and business-respondents and peers were found. This research also provides them with a way of prioritizing any improvements. It was shown that communication was the most important,

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Figure 15: Influence of business-IT alignment per criterion during closure phase

followed by partnership and governance.

Improving alignment maturity does not only lead to a better market position, it can also help reduce project costs and speed up delivery of IT projects. One of the main criteria found by business respondents when measuring alignment maturity turned out to be the long wait before a project was started, let alone the final product being delivered. It is known that communication is the most important factor. When communication is increased, it is likely that the problems the business experiences (such as the long waiting time) will be discovered earlier and acted upon.

9 Future work

This research has suggested a way of increasing innovation within the Tata Steel Europe IT-department, based on the business-IT alignment maturity at project level. Although this resulted in a number of conclusions that can very well be used to increase project performance, the path to an increased innovativeness has more challenges than covered in this research.

First of all, one of the conclusions of this research is that managing the informal organization is likely to lead to better project performance. This was also suggested by Chan (2002). This hypoth-esis (and other hypotheses resulting from the conclusions) however was not tested in this research and should be among the first things when executing research that builds on this research. Only then a link between business-IT alignment maturity at project level and project performance can be established. Testing these hypotheses however will not be easy: it will be difficult to fully attribute any changes in project performance to the changes made based on the conclusions of this research (or other research using this method). Projects at large companies and departments are subject to

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a multitude of factors influencing their performance, both within their influence and outside of it, as found by Dvir et al. (1998). During a study of 110 defence projects undertaken in Israel, they found several (among many other) (existence of unit spirit, managers as role models, social activities out of working hours) aspects related to the informal organization to be of critical importance to the success of a project.

Second, the definition of innovation has to be reviewed. The multidisciplinary definition of inno-vation used in this research might di↵er from the idea that managers at the Tata Steel Europe IT-department have of innovation. A custom definition of innovation might serve the purpose of the managers better. Previous research however has shown that managers have very di↵erent ideas of innovation (Schroeder et al., 1989).

Third, the relation between project performance and innovativeness has to be tested. It is likely that increasing project performance will lead to a higher number of successfully executed projects per year, but there are more factors influencing this number.

Fourth, a new way of briefing project managers should be found. During this research, some project managers found it difficult to grasp what was asked of them. A better briefing, perhaps using a small workshop or lecture about business-IT alignment should be tested.

Fifth, when validating this research, a larger dataset should be used. More project managers should be interviewed to rule out any large changes that might have been missed in this research due to the relatively small dataset.

On a larger level, the methodology used in this research to increase innovation within the Tata Steel IT-department should be tested in other companies. First it should be tested if this method-ology also works in other machine bureaucracies, then in other organizational types (as discerned by Mintzberg (1989)).

Lastly, it should be tested if the increase in innovativeness on the long term leads to a gain for the company involved. This gain could be competitive, financial or other. However, if increasing inno-vativeness does not lead to sufficient gain (perhaps the costs of managing the informal organization are higher than the gains), increasing it has no use in the first place.

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10 Bibliography

J. Luftman. Assessing business-it alignment maturity. Communications of the Association for Information Systems, 4, 2000.

A. Baregheh, J. Rowley, and S. Sambrook. Towards a multidisciplinary definition of innovation. Management Decision, 47(8):1323–1339, 2009.

Yolande E. Chan. Why haven’t we mastered alignment? the importance of the informal organization structure. MIS Quarterly executive, 1(2):97–112, 2002.

Henry Mintzberg. Mintzberg on management: Inside our strange world of organizations. Simon and Schuster, 1989.

John C. Henderson and Natarajan Venkatraman. Strategic alignment: Leveraging information technology for transforming organizations. IBM Systems Journal, 32(1):4–16, 1993.

J. Luftman and B. Derksen. Key issues for it executives 2012: Doing more with less. MIS Quarterly Executive, 11(4):207–218, 2012.

Elby M. Nash. Assessing IT as a driver or enabler of transformation in the pharmaceutical industry employing the strategic alignment maturity model. ProQuest, 2006.

John J. Dorociak. The alignment between business and information system strategies in small banks: An analysis of performance impact. Capella University, 2007.

Jerry Luftman and Rajkumar Kempaiah. An update on business-it alignment:“a line” has been drawn. MIS Quarterly Executive, 6(3):165–177, 2007.

Jerry Luftman, John Dorociak, Rajkumar Kempaiah, and Eduardo Henrique Rigoni. Strategic alignment maturity: a structural equation model validation. AMCIS 2008 Proceedings, page 53, 2008.

Peter Hinssen and Jeroen Derynck. Business/IT Fusion: How to Move Beyond Alignment and Transform IT in Your Organization. Across Technology, 2009.

Colin Bentley. Prince2: a practical handbook. Routledge, 2010.

Marly Monteiro de Carvalho. An investigation of the role of communication in it projects. Inter-national Journal of Operations & Production Management, 34(1):36–64, 2013.

Dov Dvir, Stan Lipovetsky, Aaron Shenhar, and Asher Tishler. In search of project classification: a non-universal approach to project success factors. Research policy, 27(9):915–935, 1998. Roger G. Schroeder, Gary D. Scudder, and Dawn R. Elm. Innovation in manufacturing. Journal

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A

List of figures

List of Figures

1 Strategic alignment model by Henderson and Venkatraman (1993) . . . 6

2 Alignment maturity criteria by Luftman (2000) . . . 7

3 Levels of alignment by Luftman (2000) . . . 9

4 Multi-disciplinairy definition of the innovation process by Baregheh et al. (2009) . . 11

5 Schematic view of a machine bureaucracy (Mintzberg, 1989) . . . 12

6 Project Lifecycle Management at Tata Steel Europe - GIS . . . 14

7 Table to be filled in by project managers for execution phase. 1 And 5 are references to the maturity in the hypothetical situations. . . 17

8 Sample of table after being filled in by project manager . . . 18

9 Business-IT alignment maturity averaged by IT and business respondents . . . 19

10 Average TSE business-IT alignment maturity compared with peers average maturity 20 11 Influence of business-IT alignment per criterion during idea phase . . . 22

12 Influence of business-IT alignment per criterion during start-up phase . . . 23

13 Influence of business-IT alignment per criterion during initiation phase . . . 24

14 Influence of business-IT alignment per criterion during execution phase . . . 25

15 Influence of business-IT alignment per criterion during closure phase . . . 26

B

List of tables

List of Tables

1 Business-IT alignment maturity results for Tata Steel Europe . . . 18

2 Average influence of alignment maturity during project phases . . . 21

3 Size of influence of alignment maturity during project phases (including average) . . 21

4 Organizational structural configurations according to Mintzberg (1989) . . . 22

C

Business-IT alignment maturity questionnaire

Communications

1. Understanding of business by IT

To what extent does IT understand the organization’s business environment (e.g., its customers, competitors, processes, partners/alliances):

1. Senior and mid-level IT managers do not understand the business

2. Senior and mid-level IT managers have limited understanding of the business 3. Senior and mid-level IT managers have a good understanding of the business

4. Understanding of the business by all IT members is encouraged and promoted by senior managers

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5. Understanding of the business is required (e.g., tied to performance appraisals) throughout the IT function.

2. Understanding of IT by business

To what extent do business organizations understand the IT environment (e.g. its current and potential capabilities, systems, services, processes):

1. Senior and mid-level business managers do not understand IT

2. Senior and mid-level business managers have a limited understanding of IT 3. Senior and mid-level business managers have a good understanding of IT

4. Understanding of IT by all employees is encouraged and promoted by senior management 5. Understanding of IT is required (e.g., tied to performance appraisals) throughout the business 3. Inter/intra organizational learning/education

The following statements pertain to methods (e.g., intranets, bulletin boards, education, meet-ings, e-mail) in place to promote organizational education/learning (e.g., of experiences, problems, objectives, critical success factors). Organizational learning occurs primarily through:

1. Ad-hoc/casual methods (employee observation, anecdote sharing, peer meetings, etc.) 2. Informal methods (newsletters, bulletin board notices, computer reports, group e-mail, fax,

etc.)

3. Regular, clear methods (training, e-mail, phone-mail, intranet, department meetings, etc.) from mid-level management.

4. Formal, unifying, bonding methods from senior methods and mid-level management

5. Formal, unifying, bonding methods from senior and mid-level management, with feedback measures to monitor and promote e↵ectiveness of learning

4. Protocol rigidity

The following question pertains to communications protocol. The IT and business communication style (e.g., ease of access, familiarity of stakeholders) tends to be:

1. One-way, from the business, formal and inflexible

2. One-way, from the business, moderately informal and moderately flexible 3. Two-way, formal and inflexible

4. Two-way, moderately informal and moderately flexible 5. Two-way, informal and flexible

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5. Knowledge sharing

The following statements pertain to the extent in which there is knowledge sharing (intellectual understanding and appreciation of the problems/opportunities, tasks, roles, objectives, priorities, goals, direction, etc.) between IT and business:

1. Knowledge sharing is on an ad-hoc basis

2. Knowledge sharing is somewhat structured and/or structure is beginning to be created 3. There is structured sharing around key functional unit processes

4. There is formal sharing at the functional unit level and at the corporate level

5. There is formal sharing at the functional unit level, at the corporate level, and with the business partners/alliances

6. Liaison(s) e↵ectiveness

The following statements pertain to the role and e↵ectiveness of IT and business liaisons: 1. We do not use liaisons, or if we do, we do so on an ad-hoc, as needed basis

2. We regularly use liaisons to transfer IT knowledge to the business and business knowledge to IT. They are the primary contact point for interactions between IT and the business. Liaisons are not usually used to facilitate relationship development.

3. We regularly use liaisons to transfor IT knowledge to the business and business knowledge to IT. They occasionally facilitate relationship development.

4. We regularly use liaisons to facilitate the transfer of IT knowledge to the business and business knowledge to IT. Their primary objective is to facilitate internal relationship development. 5. We regularly use liaisons to facilitate the transfer of IT knowledge to the business and external

partners and business knowledge to IT. Their primary objective is to facilitate relationship development across the business and its external partners.

Value measurement

1. IT metrics

The following statements pertain to the metrics and processes used to measure IT’s contribution to the business:

1. The metrics and processess we have in place to measure IT are primarily technical (e.g., system availability, response time)

2. We are equally concerned with technical and cost efficiency measures. We have limited or no formal feedback processes in place to review and take action based on the results of our measures.

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3. We formally assess technical and cost efficiency using traditional financial measures, such as return on investment (ROI) and activity-based costing (ABC). We are starting to put formal feedback processes in place to review and take action based on the results of our measures. 4. We formally assess technical, cost efficiency, and cost e↵ectiveness using traditional financial

measures (e.g., ROI, ABC). We have formal feedback processes in place to review and take action based on the results of our measures.

5. We use a multi-dimensional approach with appropriate weights given to technical, financial, operational, and human-related measures. We have formal feedback processes in place to review and take action based on the results of our measures. These measures are extended to our external partners (e.g., vendors, outsourcers, customers).

2. Business metrics

The following statements pertain to the use of business metrics to measure contribution to the business:

1. We do not measure the value of our business investments, or do so on an ad-hoc basis. 2. We are concerned with cost efficiency measures at the functional organization level only. We

have limited or no formal feedback processes in place to review and take action based on the results of our measures.

3. We formally use traditional financial measures, such as return on investment (ROI) and activity-based costing (ABC), across functional organizations. We are starting to have formal feedback processes in place to review and take action based on the results of our measures. 4. We formally measure value based on the contribution to our customers. We have formal

feedback processes in place to review and take action based on the results of our measures and to assess contributions across functional organizations.

5. We use a multi-dimensional approach with appropriate weights given to technical, financial, operational, and human-related measures. We have formal feedback processes in place to review and take action based on the results of our measures. These measures are extended to our external partners (e.g., vendors, outsourcers, customers).

3. Balanced metrics

The following statements pertain to the use of integrated IT and business metrics to measure IT’s contribution to the business:

1. We do not measure the value of our IT business investments, or do so on an ad-hoc basis. 2. The value measurements for IT and business are not linked. We have limited or no formal

feedback processes in place to review and take action based on the results of our measures. 3. The value measurements for IT and business are starting to be linked and formalized. We

are also starting to have formal feedback processes in place to review and take action based on the results of our measures.

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4. We formally link the value measurements of IT and business. We have formal feedback processes in place to review and take action based on the results of our measures and to assess contributions across functional organizations.

5. We use a multi-dimensional approach with appropriate weight given to IT and business mea-sures. We have formal feedback processes in place to review and take action based on the results of our measures. These measures are extended to our external partners (e.g., vendors, outsourcers, customers).

4. Service level agreements

The following statements pertain to the use of service level agreements (SLAs): 1. We do not use SLAs or do so sporadically.

2. We have SLAs which are primarily technically oriented (response time, length of computer downtime, etc.), between the IT and functional organizations.

3. We have SLAs which are both technically oriented and relationship-oriented (user/customer satisfaction, IT’s commitment to the business, etc.) that are between the IT and functional organizations and also emerging across the enterprise.

4. We have SLAs which are both technically-oriented and relationship-oriented, between the IT and functional organizations as well as enterprise wide.

5. We have SLAs which are both technically-oriented and relationship-oriented, between the IT and functional organizations as well as at enterprise wide and with our external partners/ alliances.

5. Benchmarking

The following statements pertain to benchmarking practices. Informal practices are such things as informal interviews, literature searches, company visits, etc., while formal practices are such things as environmental scanning, data gathering and analysis, determining best practices, etc.:

1. We seldom or never perform either informal or formal benchmarks. 2. We occasionally or routinely perform informal benchmarks.

3. We occasionally perform formal benchmarks and seldom take action based on the findings. 4. We routinely perform formal benchmarks and usually take action based on the findings. 5. We routinely perform formal benchmarks and have a regulated process in place to take action

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6. Formal assessments/reviews

The following statements pertain to the extent of assessment and review of IT investments: 1. We do not formally assess and/or review.

2. We assess and/or review only after we have a business or IT problem (i.e., failed IT project, market share loss).

3. Assessments and/or reviews are becoming routine occurrences.

4. We routinely assess and/or review and have a formal process in place to make changes based on the results.

5. We routinely assess and/or review and have a formal process in place to make changes based on the results and measure the changes. Our external partners are included in the process. 7. Continuous improvement

The following statements pertain to the extent to which IT-business continuous improvement prac-tices (e.g., quality circles, quality reviews) and e↵ectiveness measures are in place:

1. We do not have any continuous improvement practices in place.

2. We have a few continuous improvement practices in place, but no e↵ectiveness measures are in place.

3. We have a few continuous improvement practices in place and the use of e↵ectiveness measures is emerging.

4. We have many continuous improvement practices in place and we frequently measure their e↵ectiveness.

5. We have well established continuous improvement practices and e↵ectiveness measures in place.

8. Proven contribution of IT to the business

The demonstrated contribution that the IT function has made to the accomplishment of the orga-nization’s strategic goals is:

1. Very weak. 2. Somewhat weak.

3. Neither weak nor strong. 4. Somewhat strong. 5. Very strong.

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Governance

1. Business strategic planning

The following statements pertain to strategic business planning with IT participation:

1. We do no formal strategic business planning or, if it is done, it is done on an as-needed basis. 2. We do formal strategic business planning at the functional unit level with slight IT

partici-pation.

3. We do formal strategic business planning at the functional unit levels with some IT partici-pation.

4. We do formal strategic business planning at the functional unit and across the enterprise with IT participation.

5. We do formal strategic business planning at the functional unit, across the enterprise, and with our business partners/alliances with IT participation.

2. IT strategic planning

The following statements pertain to strategic IT planning with business participation: 1. We do no formal strategic IT planning or, if it is done, it is done on an as-needed basis. 2. We do formal strategic IT planning at the functional unit level with slight business

partici-pation.

3. We do formal strategic IT planning at the functional unit levels with some business partici-pation.

4. We do formal strategic IT planning at the functional unit and across the enterprise with the business.

5. We do formal strategic business planning at the functional unit, across the enterprise, and with our business partners/alliances.

3. Budgetary control

The following statements pertain to the budgetary control of the IT function: 1. Cost centre, with erratic/inconsistent/irregular/changeable spending. 2. Cost centre, by functional organization.

3. Cost centre with some projects treated as investments. 4. Investment centre.

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4. IT investment management

The following statements pertain to IT investment decisions. Our IT investment decisions are primarily based on IT’s ability to:

1. Reduce costs.

2. Increase productivity and efficiency as the focus.

3. Traditional financial reviews. IT is seen as a process enabler.

4. Business e↵ectiveness is the focus. IT is seen as a process driver or business strategy enabler. 5. Create competitive advantage and increase profit. Our business partners see value.

5. Steering committees

The following statements pertain to IT steering committee(s) with senior level IT and business management participation:

1. We do not have formal/regular steering committee(s).

2. We have committee(s) which meet informally on an as-needed basis.

3. We have formal committees, which meet regularly and have emerging e↵ectiveness. 4. We have formal, regular committee meetings with demonstrated e↵ectiveness.

5. We have formal, regular committee meetings with demonstrated e↵ectiveness that include strategic business partners sharing decision-making responsibilities.

6. Prioritisation process

1. In reaction to a business or IT need. 2. Determined by the IT function. 3. Determined by the business function.

4. Mutually determined between senior and mid-level IT and business management.

5. Mutually determined between senior and mid-level IT and business management and with consideration of the priorities of any business partners/alliances.

7. React/respond quickly

The ability of the IT function to react/respond quickly to the organization’s changing business needs is:

1. Very weak. 2. Somewhat weak.

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4. Somewhat strong. 5. Very strong.

Partnership

1. Business perception of IT value 1. A cost of doing business.

2. Emerging as an asset.

3. A fundamental enabler of future business activity. 4. A fundamental driver of future business activity.

5. A partner with the business that co-adapts/improvises in bringing value to the firm. 2. Role of IT in strategic business planning

1. IT does not have a role.

2. IT is used to enable business processes. 3. IT is used to drive business processes.

4. IT is used to enable or drive business strategy.

5. IT co-adapts with the business to enable/drive strategic objectives. 3. Shared goals, risks, rewards, penalties

The following statements pertain to the sharing (by IT and business management) of the risks and rewards (e.g., bonuses) associated with IT-based initiatives (i.e., a project is late and over budget because of business requirement changes):

1. IT takes all the risks and does not receive any of the rewards. 2. IT takes most of the risks with little reward.

3. Sharing of risks and rewards is emerging. 4. Risks and rewards are always shared.

5. Risks and rewards are always shared and we have formal compensation and reward systems in place that induce managers to take risks

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4. IT program management

The following statements pertain to formally managing the IT/business relationship. To what extent are there formal processes in place that focus on enhancing the partnership relationships that exist between IT and business (e.g., cross-functional teams, training, risk/reward sharing):

1. We don’t manage our relationships.

2. We manage our relationships on an ad-hoc basis.

3. We have defined programs to manage our relationships, but IT or the business does not always comply with them. Conflict is seen as creative rather than disruptive.

4. We have defined programs to manage our relationships and both IT and the business comply with them.

5. We have defined programs to manage our relationships, both IT and the business comply with them, and we are continuously improving them.

5. Relationship/trust style

The following statements pertain to IT and business relationship and trust: 1. There is a sense of conflict and mistrust between IT and the business.

2. The association is primarily an “arm’s length” transactional style of relationship. 3. IT is emerging as a valued service provider.

4. The association is primarily a long-term partnership style of relationship. 5. The association is a long-term partnership and valued service provider. 6. Business sponsor/champion

The following statements pertain to business sponsors/champions. Our IT-based initiatives: 1. Do not usually have a senior level IT or business sponsor/champion.

2. Often have a senior level IT sponsor/champion only.

3. Often have a senior level IT and business sponsor/champion at the functional unit level. 4. Often have a senior level IT and business sponsor/champion at the corporate level. 5. Often have a senior level IT and the CEO as the business/sponsor champion.

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Scope and architecture

1. Traditional/enabler/driver/external

The following statements pertain to the scope of your IT systems. Our primary systems are: 1. Traditional office support (e.g., e-mail, accounting, word processing, legacy systems). 2. Transaction-oriented (e.g., back office support).

3. Business process enablers (IT supports business process change). 4. Business process drivers (IT is a catalyst for business process change).

5. Business strategy enablers/drivers (IT is a catalyst for changes in the business strategy). 2. Standards articulation Score

The following statements pertain to the articulation of and compliance with IT standards. Our IT standards are:

1. Non-existent or not enforced.

2. Defined and enforced at the functional unit level but not across di↵erent functional units. 3. Defined and enforced at the functional unit level with emerging coordination across functional

units.

4. Defined and enforced across functional units. 5. Defined and enforced across functional organization. 3. Architectural integration

The following statements pertain to the scope of architectural integration. The components of our IT infrastructure are:

1. Not well integrated.

2. Integrated at the functional unit with emerging integration across functional units. 3. Integrated across functional units.

4. Integrated across functional units and our strategic business partners/alliances. 5. Evolving with our business partners.

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4. Architectural transparency, agility, flexibility

The following statements pertain to the level of disruption caused by business and IT changes (e.g., implementation of a new technology, business process, merger/acquisition). Most of the time, a business or IT change is:

1. Not readily transparent (very disruptive). 2. Transparent at the functional level only.

3. Transparent at the functional level and emerging across all remote, branch, and mobile loca-tions.

4. Transparent across the entire organization.

5. Transparent across the organization and to our business partners/alliances. 5. Manage emerging technology

The following statements pertain to the scope of IT infrastructure flexibility to business and tech-nology changes. Our IT infrastructure is viewed as:

1. A utility providing the basic IT services at minimum cost.

2. Emerging as driven by the requirements of the current business strategy. 3. Driven by the requirements of the current business strategy.

4. Emerging as a resource to enable fast response to changes in the marketplace. 5. A resource to enable and drive fast response to changes in the marketplace.

Skills and competences

1. Innovation, entrepreneurship

The following statements pertain to the extent the organization fosters an innovative entrepreneurial environment. Entrepreneurship is:

1. Discouraged.

2. Moderately encouraged at the functional unit level. 3. Strongly encouraged at the functional unit level.

4. Strongly encouraged at the functional unit and corporate levels.

Influence of business-IT alignment on IT projects: A case study