Dimensions of Business IT Alignment One of the first researchers of the strategic business IT alignment was Horovitz (1984), who

ho defined two factors for the alignment, the intellectual or cognitive factors and the social factors. The first factor is referred to the methodologies, techniques, data, infrastructure, and performance indicators used to formulate strategies and represent the state in which IT and business objectives are consistent and valid. The second factor is related to the behavior of the individuals who participate in the process of alignment (business executives, IT executives, senior managers, etc.) and the different relations between these individuals in this process, their level of involvement and the methods of communication and decision-making are important; the state in which business and IT executives understand and are committed to each others mission, objectives, and plans. Horovitz (1984) stated that the social dimension of alignment is a view from the social perspective including: (a) developing and acceptance of business strategies through the influences of senior executives, (b) organizational culture, (c) communications between participants, (d) situational leadership, and (e) compliance. The social factors of the business IT alignment are composed mainly by the actors in the organization, their values, communications with each other, and the understanding of each others domain (Hammett, 2008). Sage (2006) developed a model addressing the three predominant alignment dimensions of intellectual, social, and behavioral (maturity) factors for achievement of better business IT alignment enabled by EA. This model was tested using data from agencies of the US government (General Accounting Office 2001/2003 surveys) and structural equation modeling (SEM) techniques were used to validate the hypothesis of the model. The findings were that the intellectual, social, and behavioral factors indicated by

use of EA positively affect business IT alignment in the US government agencies using FEAF. Sage (2006) presented a third factor for alignment, the behavioral factor, which is a measure of the degree to which the business is aligned with the IT department, relative to successful delivery and operationalization of technology based projects and systems. Galliers and Sutherland (as cited in Galliers & Leidner, 2003) defined a model of growth with six stages of organization behaviors relative to the level of alignment and degree of maturity with the following stages: (a) ad hoc level with uncontrolled ad hoc approaches to use of IT, (b) IT foundation is created, (c) centralized dictatorship or initiation of comprehensive planning, (d) democratic dialectic denotes cooperation between IT and business, (e) entrepreneurial opportunity, and (f) full alignment of business - IT with an integrated and harmonious relationship between the business and IT. Brown and Magill (1994) found a multifaceted factors for business IT alignment that encompass the establishment of processes that integrate IT planning and business planning (steering committees), cross functional training and understanding of the respective domains of IT and business, and CIO leadership role in partnership with the business. This factors combine the structural aspects of the organization and relational aspects between the IT and business executives. Segars and Grover (1998) considered the continuing mutual understanding with top management on the strategic role of IT and the top managements understanding of IT and its values as main factors for business IT alignment. The interest of this study is in the common understanding and the top managements IT education. Murray in 1999 made an study which defined a theoretical model of shared awareness of senior executives and business IT alignment, in this study Murray proposed

the interaction of these variables through four dimensions: (a) an adequate and appropriate communication of organizations mission, vision, and objectives; (b) an agreement on key programs and priorities of critical investments necessary for achieving vision; (c) establishment of enabling structures and processes for overall management of processes; and (d) clear measures of success as criteria for evaluating successful systems development. This study combines the communication of strategic elements of business and structural aspects such as agreement on programs and investments, management of processes, and measures of success. Enterprise Architecture (EA) is defined as the activities of organizaing logic for business processes and IT infrastructure reflecting the integration and standardization requirements of the organizations operating model (Ross, Weil, & Robertson, 2006). EA represents a set of objectives, activities, products or architecture components, models, plans, tools, processes, metrics, principles, policies and governance that enable the cognitive, social, and behavioral factors for the strategic alignment of business and IT in US governmental agencies (Sage, 2006). At this moment in Peru there are very few organizations that have implemented EA initiatives formally and present some results. Henderson and Venkatraman (1993) published a paper that condense several years of studies about the business IT strategies alignment and presented a process for this alignment called Strategic Alignment Model (SAM), this is the most complete and detailed model about this phenomenon and divide the process in two sides, the external and internal side, and the business and IT side. The external side represents the business and IT strategies decomposed in three aspects: scope, distinctiveness or competencies, and governance for each one; the internal side is composed by the administrative and IT resources needed to carry out the strategies proposed by the senior managers and applied to

the business and IT sides, it has three aspects: infrastructure (architecture in the IT side), business and IT processes, and personnel skills. The characteristic of the Henderson and Venkatramans model of alignment is the fitting of the sides, between the internal and external sides there is the functional integration that operationalizes the strategies in the infrastructure; and between the business and IT sides exists the strategic fit. In this model the strategic alignment occurs in four types of alignment (a dynamic process of continuous adaptation and change): 1. Strategy execution, where the business strategy is the driver and the IT is the enabler of this strategy, there is no participation of the IT strategy, the business strategy prepares its administrative infrastructure and IT also prepares its architectures and infrastructure. For instance, when the business starts a new marketing campaign and has all the IT services and applications almost ready, only few operational adaptations in the applications could be needed. 2. Technology transformation, where the business strategy is the driver but in this case there is an alignment with the IT strategy. The IT strategy is adapted and includes the necessary components to synchronize with the business strategy; the IT infrastructure, personnel and skills are prepared responding to the new IT strategy. For instance, when some business executive presents a new project or a new service that modify the IT strategy (new e-business platform), in order to fulfill the business requirement the IT department must align its strategies and modify its infrastructure, processes and personnel skills if it is necessary. 3. Competitive potential, where the IT strategy is the enabler detecting new technologies and the business strategy must be aligned, in this case new products or services, new forms of relationships modify key attributes of the business strategy.

The administrative infrastructure, business processes, and personnel skills must be adapted to the new business strategy. For instance, the IT manager presents a new project or a new service that modify the business strategy (new mobile application), in order to fulfill the technical requirements the business department must align its strategies and modify its infrastructure, processes and personnel skills if it is necessary to use the new product. 4. Service level, where the IT strategy is the enabler and some world-class or critical service is proposed without the necessity of adapting the business strategy; in this case the IT infrastructure and processes are adapted to the new IT strategy and the administrative infrastructure is operationally integrated with the IT infrastructure. For instance, IT detects a new product or technology (video conferencing on line or unified communications) and adapts its infrastructure, processes and personnel skills to implement this new product or technology; once it is implemented an operational integration is made with the administrative infrastructure of the business to permit the use of the new technology. In Henderson and Venkatramans process of business IT alignment there are some fits between the components of alignment that are interesting, the first one is the fit between business and IT strategies in the external side of the model; second, the operationalization fit between the strategies (IT and business) and their respective organizations and infrastructure, in order to define the projects to prepare them and respond to strategies; and third, the fit between the administrative business organization and IT infrastructure to perform change management and materialize the strategic plans in the organizations

structure and processes. The scope of this study is only the first fit, the fit between business and IT strategic plans. The alignment of business and IT strategies produces many benefits for organizations, it maximizes the return on IT investments and improves the corporate performance (Pierce, 2002) and alignment leads to effective and efficient use of IT and facilitates, supports, and stimulates business goals (Luftman, Lewis, & Oldach, 1993). Chen et al. (1997) found a positive relationship between the strategic alignment of business IT with the product and service innovation, and information systems effectiveness. Information systems effectiveness was measured by reported end user satisfaction, contribution of information systems to operational efficiency, managerial effectiveness, and electronic ties to customers and suppliers (Chan et al., 1997). Social Dimension for Business IT Alignment Reich and Benbasat (2000) defined the social dimension of the alignment as the state in which business and IT executives within an organization understand and are committed to the business and IT missions, objectives, and plans. They did an exploratory research of the social aspects of the alignment with semi-structured interviews, collected business and IT strategic plans in ten business units and found a model with two antecedents and two current practices interrelated, the two antecedents were: 1. Shared domain knowledge between business and IT executives. 2. Success in IT implementation. And the two current practices were: 3. Communication between business and IT executives. 4. Connection between business and IT planning.

The shared domain knowledge affected positively to the two current practices, in the same way the success in IT implementations. The communication between business and IT executives affected positively the connection between business and IT planning. And both current practices affected positively the alignment (Reich & Benbasat, 2000). The communication between business and IT executives are the contacts between individuals during the daily course of events -face to face or written, formal or informal, in groups or in pairs. This communications construct represent all communications between IT and business executives except the formal long-term planning sessions. The crossfunctional project teams help in the successful linking and communication between IT and business executives. The proposition is the level of communication between IT and business executives are positively related with the level of alignment (Reich & Benbasat, 2000). The connection between business and IT planning is the degree to which the business and IT planning processes are interrelated; if both processes occur in conjunction the level of alignment will be high. The IT planning process is the crucial time to forge the alignment. The proposition is the level of connection between business and IT planning processes are positively related with the level of alignment (Reich & Benbasat, 2000). The shared domain knowledge between business and IT executives is the ability of these executives to understand and participate in the others key processes and to respect each others unique contribution and challenges. This is the strongest factor that influences the alignment. The proposition is the level of shared domain knowledge within a business unit is positively related with the communication between business and IT executives, and the connections between business and IT planning processes (Reich & Benbasat, 2000).

The lack of this factor IT does not understand the business was ranked as an important inhibitor of alignment (Luftman & Brier, 1999). The success in IT implementations is the successful history of IT contributions that is expected to increase the interest of business executives to communicate with IT executives and to have IT considered more carefully in business planning. The proposition is the level of IT implementation success is positively related with the communication between business and IT executives and the connections between business and IT planning processes (Reich & Benbasat, 2000). All four factors of the Reich and Benbasat (2000) model of alignment were found to influence short term alignment. Only shared domain knowledge was found to influence long term alignment (Hammett, 2008). Hammett (2008) proposed in her study four social factors that influence positively the business IT alignment, and mix them from the studies of Luftman and Brier (1999) and Reich and Benbasat (2000): (a) level of communication between business and IT professionals; (b) shared domain knowledge; (c) support of IT initiatives from business executives; and (d) strong IT infrastructure represented by the different architectures involved (applications, software, hardware, network, data, policies, etc.), the IT processes or activities, and the skills of the IT personnel (motivation, training, culture, etc.). Some other studies proposed a combination of resources such as people, processes, and technology that weave together across organizations supported by executive commitment, sponsorship, and active participation to reach business IT alignment (Brokel, 2007; Malone et al., 2005).

The construct of business IT alignment is a multifaceted response that includes knowledge, attitudes, beliefs, and practices surrounding a variety of business and IT related areas (Martinez, 2008). Factors affecting managers as participants in the alignment process are decision making style, status of the manager, power of the manager, and location of the manager (Pyburn, 1983). Business managers provide strategic and operational direction to the alignment of IT and business strategies, and commitment to implement IT systems; effective working relationships with business managers enable IT managers to understand business problems and opportunities, determine needed functionality, and choose among technology options (Rockart, Earl, & Jones, 1996). Gupta and Govindarajan (2000) indicated that social dimension is composed by social systems in which the participants operate within the organization relative to strategic planning and alignment. The social systems are the cultures, control structures, communications, participants, leadership styles, and levels of decision making authority within the organization. De Haes (2007) found that IT governance implementation leads to business IT alignment in the large size financial service organizations from Belgium, and that IT governance is composed of three elements which are structures, processes, and relational mechanisms. The relational mechanisms are represented by the active participation and collaborative relationship among corporate executives, IT management and business management, and include announcements, advocates, channels, and education efforts (Peterson, 2004; Weill & Ross, 2004). Indeed, the relational mechanisms are composed by business IT participation, strategic dialogue, training, shared learning, and proper communication (Peterson, 2004). Specifically a two way communication and a good

participation and collaboration relationship between the business and IT people (De Haes, 2007). Relational mechanisms are crucial in the IT governance framework and paramount for attaining and sustaining business IT alignment, even when the appropriate structures and processes are in place (Keill et al., 2002; Weill & Broadbent, 1998; Henderson & Venkatraman, 1993; Callahan & Keyes, 2002). De Haes (2007) presented a list of IT government practices regarding relational mechanisms that influence business IT alignment which are: (a) job rotation, IT staff working in the business units and business people working in IT; (b) co-location, physically locating business and IT people close to each other; (c) cross training, training business people about IT and training IT people about business; (d) knowledge management, systems to share and distribute knowledge about IT governance framework, responsibilities, tasks, etc.; (e) business IT account managers bridging the gap between business and IT (Luftman, 2000; Weill & Ross, 2004; Reich & Benbasat, 2000); (f) senior business and IT management giving the good example and acting as partners; (g) informal meetings between business and IT senior management with no agenda, talking about general activities; and (h) IT leadership, ability of CIO to articulate a vision for ITs role and ensure that this vision is clearly understood by managers throughout the organization (Monnoyer & Willmott, 2005). The communication factor for alignment was found several times in the literature, Rathnam, Johnsen, and Wen in 2004 said that communication was a primary driver for alignment and offered the greatest potential for improving the alignment of business and IT strategies; in the same way, Kanter in 2003 found that the most commonly stated attribute contributing to successful planning and business IT alignment was constant communication between business managers, IT managers, and their respective staff. Lind

and Zmud (1991) mentioned that communication frequency and depth are factors for alignment business IT. Communications skills along with technical and business knowledge are suggested to be essential in achieving business and IT alignment (Luftman, 2000). Sledgionowski and Luftman (2005) found that communications between business and IT executives are influenced by factors as frequency, richness, and protocol rigidity, as well as mutual understanding, intra / inter organization learning, and knowledge sharing. Some activities to improve the social relations for the business IT alignment are work toward mutual cooperation and participation in strategy development, communicate effectively in terms that people understand, concentrate on improving the relationships between the business and IT functional areas, governance policies like steering committees are vehicles to translate business policies into priorities and IT projects, maintain executive support, and prioritize IT projects effectively (Hammett, 2008). In order to improve the degree of alignment (integration of IT and business strategic planning process and matching of IT initiatives with the corporate goals), the IT function must be strategically positioned within the organizational structure, with the CIO having direct access to the CEO (Hammett, 2008). Other important aspect studied related with business IT alignment is the organizational culture. Chan (2002) said that the informal organizational structure is more important in the achievement of alignment than had previously been recognized. The organizational culture was studied by Schein and he defined it as the deeper level of basic assumptions and beliefs that are shared by members of an organization, that operate unconsciously, and that define in a basic taken for granted fashion an organizations view of itself and the environment (Schein, 1985, p.6). Schein (1992) stated that the organizational culture operates at three conceptual levels: (a) artifacts at the outermost level

visible through organizational structures and processes, (b) espoused values as strategies, goals, and philosophies as evidenced by espoused justifications, and (c) basic underlying assumptions at the innermost level through the unconscious taken for granted beliefs, perceptions, thoughts, and feelings. Culture refers to a complex set of values, beliefs, assumptions, and symbols that define the way in which a firm conducts its business (Smircich, 1983; Schein, 1984; Barney, 1986; Kerr & Slocum, 1987; Robbins, 1987). The organization culture reflects the composite management style of its executives, which has much to do with the organizations ability to adapt to change (Pettigrew, 1979; Schein, 1984). In a more recent study Cameron defined the organizational culture dimension as the core values and consensual interpretations about how things are done (Cameron, 2004, p.3). Cameron and Quinn (1999) created an instrument to measure the prevailing organizational culture called organizational culture assessment instrument (OCAI), which measures the underlying shared beliefs of the participants within an organization. The organizational culture measurement instrument created by Cameron and Quinn was based on the competing values framework developed by Quinn and Rohrbaugh in 1983, in this framework the profile of an organizational culture is depicted along two dimensions or axes: the degree of inward / outward orientation focus (from internal to external) and the degree of stability / flexibility structure (from flexibility to control) of the organization. Cameron and Quinn (1999) defined four types of organizational cultures for each one of the quadrants of the Quinn and Rohrbaughs framework: (a) clan culture orientation (internal focus and flexibility in structure) with a friendly and supportive work environment, supervisors as mentors, high concern of employees and customers, and emphasis on teamwork; (b) market culture orientation (external focus and control in

structure) with a hard driving and competitive organizational environment, demanding managers, and major organizational goal is winning competitive marketplace; (c) hierarchy culture orientation (internal focus and control in structure) with a formalized and structural work environment, major emphasis on coordination of efforts and efficiency as central focus, procedure driven management of employees, and predictability as a value; and (d) adhocracy culture orientation (external focus and flexibility in structure) where employees are encouraged to act with individual initiative, risk taking is acceptable, and innovation and experimentation are valued. The congruence of the cultural profiles generated on different attributes and by different individuals is a dimension of organizational culture measured by the instrument; other dimensions measured are the dominant type of organizational culture, and the strength of the prevailing culture (Cameron & Quinn, 1999). The cultural congruence means that various aspects of an organizations culture are aligned (Cameron & Quinn, 1999). Nickels (2005) explored the relationship between the congruence of perceptions of the prevailing organizational culture, as an indicator of informal organizational structure, and the perceived maturity level of IT- business alignment. He found that the degree of congruence of the perceptions of the prevailing organizational culture environment among senior level executives and managers from the business and IT functional areas is highly predictive and a moderator for the level of business IT alignment maturity. Measurement of Business IT Alignment Venkatraman (1985) developed a scale to measure business strategies called Strategic Orientation to Business Strategy (STROBE), this is a comparative approach towards describing the difference along a set of characteristics that collectively define the

business strategy (Pierce, 2002). This scale has eight characteristics to measure: (a) aggressiveness, improve competitive position and dominate even if this means reduced prices and cash flow; (b) analysis, searching more deeply the origin of problems with detailed studies prior to action; (c) internal defensiveness, emphasis on cost reduction and efficiency; (d) external defensiveness, forming tough marketplace alliances; (e) futurity, emphasis on longer term over the short term profitability; (f) innovativeness, creativity and experimentation to adopt new technologies and try new solutions; (g) pro-activeness, initiative in open new markets, producing new products, and new ways of serving customers step ahead of the competition; and (h) riskiness, reluctance to risky projects. Chan (1992) developed a model to explain the relation between information systems (IS) strategic fit and the business performance and the IS effectiveness, additionally she developed an instrument to describe and measure the IS strategy called Strategic Orientation to Information Systems (STROIS), this scale was based in the Venkatramans STROBE measurement scale and try to indicate the IS strategy answers to the characteristics of the business strategy defined by STROBE. These instruments are intended to measure implemented strategies, no intended strategies (Pierce, 2002). Chan, Huff, Barclay, and Copeland (1997) redefined the Chans model presenting a conceptual model with the relations between business and IS strategies, its alignment, and business performance, also the relation between the realized IS strategies and IS effectiveness (perceived success and business value of IS). At the same time, they matched the eight characteristics of STROBE with the eight corresponding of the IS strategy creating an overall measure of strategic alignment called Strategic Orientation of the Existing Portafolio of IT Applications (STROEPIS).

This scale has eight characteristics to measure: (a) IS support for aggressiveness through market place actions, (b) IS support for analysis of business situations, (c) IS support for internal defensiveness through improving efficiencies of company operations, (d) IS support for external defensiveness strengthen marketplace links, (e) IS support for futurity through forecasting and anticipation purposes, (f) IS support for pro-activeness through expedite instruction of products and services, (g) IS support for riskiness making business risk assessments, and (h) IS support for innovation facilitating creativity and exploration. The IT strategic alignment is operationalized as the internal consistency between STROBE and STROEPIS metrics, different tendencies in these scores means poor alignment (Hammett, 2008). The growing turbulence and uncertainty of business environment, the increasing dependency of the organizations and pervasiveness of IT influenced approaches with increasing emphasized alignment of business and IT plans (Nash, 2006). Organizations need to adjust the responses to environmental changes by varying their management practices, organizational structures, processes, technologies, and technology management practices (Sabherwal, Hirschheim, & Goles, 2001). Strategic alignment is not a single end state condition, it is dynamic and requires sometimes revolutionary adjustments when environmental turbulence mandates changes to the alignment patterns which may have existed for years (Nash, 2006). Sabherwal, Hirschheim, and Goles (2001) stated that there are snapshots of strategic alignment at specific points in time, and there is a punctuated equilibrium of strategic alignment which posits long periods of gradual evolution and little change that are interrupted by short and

violent periods of rapid change, then the maturity is not and end state or even a forward direction. The punctuated equilibrium model of alignment proposed by Sabherwal et al. (2001) emphasized the social and cultural dimensions of alignment such as the knowledge sharing and common strategic vision of IT and business management, the development of trust and partnership between business and IT, the understanding of IT value by top management, the deep reciprocal strategy formulation process including environmental scanning, and the CIO to be as knowledgeable about emerging changes in business environment and its impact on business. In 1999 Luftman, Papp, and Brier extended the Henderson and Venkatramans SAM model by introducing methods to create IT strategies and plans, considering the enablers and inhibitors to the alignment of business and IT strategies, approaching the social factors of the alignment, their study was based on a survey to 500 IT and non-IT executives. They found six enablers and inhibitors, the enablers are: (a) the senior executive support for IT; (b) IT involved in strategy development, IT and non-IT executives creating enterprise strategies in cooperation and close working relationship; (c) IT understands the business; (d) business IT partnerships; (e) well prioritized IT projects; and (f) IT demonstrates leadership. And the six inhibitors are: (a) business IT lack of close relationships, (b) IT does not prioritize well the projects, (c) IT fails to meet its commitments (projects are late and over budget), (d) IT does not understand the changing business environment, (e) senior executives do not support IT (lack of funding and less innovative applications of IT), and (f) IT management lacks leadership (Luftman, Papp & Brier, 1999)

Alignment is a process that can be enabled or inhibited by certain factors related to organizational structure and behaviors (Luftman, Papp, & Brier, 1999). Luftman (2000) based on earlier studies of Luftman and Brier (1999) created a five level state growth framework that describes the evolution of growth of the state of IT business alignment in an organization, from the least strategically aligned state to the highest state of strategic alignment, this framework is called Strategic Alignment Maturity Model (SAMM). SAMM provides a means by which an organization can assess its current state of strategic alignment and identify steps it needs to take or maintain IT business alignment (Nash, 2006). In SAMM (Luftman, 2000) each of five levels is completely described by six categories that represent management activities or practices that are critical in enabling or inhibiting strategic alignment. These categories are: 1. Communications that encourage knowledge sharing. 2. Competency and value measurement that demonstrate the business value of IT. 3. Governance that ensures business and IT communities that formally discuss and review priorities and allocation of resources. 4. Partnership that address how the business and IT communities perceive the contribution of the other, trust between communities, and how risks and rewards are shared. 5. Scope and architecture that address the extent to which IT is able to drive or enable transformation, provide strategic solutions, design and implement flexible IT infrastructures, effectively evaluate and apply emerging technologies for current and potential needs, enable changes to business processes for competitive advantage, and provide customizable solutions.

6. Human resource skills that enhance the organizational culture and social environment as a component of organizational effectiveness. Considering the scope of this study the SAMM alignment categories and management practices of interest are: 1. Communications as exchange of ideas, knowledge and information among the IT and business organization, enabling to have a clear understanding of the companys strategies, business and IT environments, priorities, and what must be done to achieve them. For communication the alignment practices for measuring are: (a) understanding of business by IT, (b) understanding of IT by business, (c) organizational learning, (d) style and ease of access between business and IT, (e) leveraging intellectual assets, and (f) IT business liaison staff (relationship between them). 2. Governance as a degree to which the authority for making IT decisions is defined and shared among management, and the managers in both IT and business areas apply in setting IT priorities and allocation of IT resources. Nash (2006) mentioned governance as a measure of adherence to standards and use of resources appropriately. For governance the alignment practices for measuring are: (a) formal business and IT strategic planning, (b) organizational structure, (c) CIO reporting relationships, (d) how IT is budgeted, (e) rationale for IT spending, (f) senior level IT steering committees, and (g) how projects are prioritized. 3. Partnership as relationships among the business and IT organizations, including IT involvement in defining business strategies, the degree of trust between the two organizations, and how each one perceives the contribution of the other. For

partnership the alignment practices for measuring are: (a) business perception of IT, (b) ITs role in strategic business planning, (c) shared risks and rewards, (d) managing the IT business relationship, (e) relationship and trust style between business and IT, and (f) existence of business sponsors or champions for IT. 4. Human resources skills as practices such as training, performance feedback, encouraging innovation and providing career opportunities, IT organizations readiness for change, capability for learning, and ability to leverage new ideas. This alignment category try to measure the ability of business and technical resources to work together, and the skill management ability of IT resources to work within business environment (Nash, 2006). For human resources skills the alignment practices for measuring are: (a) innovative and entrepreneurial environment, (b) who makes key IT human resources decisions, (c) change readiness, (d) crossfunctional training and job rotation, (e) social interaction between business and IT, and (f) attract and retain top talent.