The challenge of managing the relationship between a firm's business and IT in order to derive business value from IT is an important topic on researchers' and practitioners' agendas. The focus of most related research and management actions has been on the top management or project management levels. However, conflicts frequently arise within the line organization when applications are extended, enhanced, maintained, or otherwise changed operationally outside software development projects. This study focuses on the impact of relationships at the application-change level and strives to identify and explain favorable social structures for effective business/IT dialog at the operational level. We collected data in seven comprehensive case studies, including 88 interviews and corresponding surveys, and applied social network analysis to show that three social structures at the implementation level influence the degree to which IT applications are maintained and enhanced in line with business requirements: (1) interface actors connecting business and IT, (2) the relationships between interface actors and the corresponding unit, and (3) the relationships between interface actors and other employees in their unit. In three cases, less favorable structures are revealed that correspond to low application change effectiveness and software applications that do not meet business requirements. The other cases benefit from favorable social structures and thus enhance fulfillment of business requirements and result in higher IT business value. This paper contributes to IS research by helping to explain why companies may not provide favorable IT services despite favorable relationships at the top management level and successful application development projects.
It is widely acknowledged that IT and business resources need to be well aligned to achieve organizational goals. Yet, year after year, chief information officers (CIOs) still name business-IT alignment a key challenge for IT executives. While alignment research has matured, we still lack a sound theoretical foundation for alignment. Transcending the predominantly strategic executive level focus, we develop a model of 'operational alignment' and IT business value that combines a social perspective of IT and business linkage with a view of interaction between business and IT at non-strategic levels, such as in daily business operations involving regular staff. Drawing on social capital theory to explain how alignment affects organizational performance, we examine why common suggestions like "communicate more" are insufficient to strengthen alignment and disclose how social capital between IT and business units drives alignment and ultimately IT business value.
Empirical data from 136 firms confirms the profound impact of operational business-IT alignment, composed of social capital and business understanding of IT, on IT flexibility, IT utilization, and organizational performance. The results show that social capital theory is a useful theoretical foundation for understanding how business IT alignment works. The findings suggest that operational alignment is at least as important as strategic alignment for IT service quality, that managers need to focus on operational aspects of alignment beyond communication by fostering knowledge, trust and respect, and that IT utilization and flexibility are appropriate intermediate goals for business-IT alignment governance.