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Information Technology and Business Strategy Gap Term Paper


Introduction

Modern businesses have adopted technological tools to accomplish various tasks. As such, the competitive landscape has generally shifted and become so uncertain. Years of rapid growth and innovation have been succeeded by fierce rivalry, sustained fiscal pressure, and unforeseen forces such that survival, not a success, is the main concern (Elmorshidy 819). Consequently, managers continue to face critical decisions on business growth and investment for organizational objectives.

These issues are spread across every business unit to global levels. Thus, business complexity has escalated as solutions become elusive. Among these rare solutions, technology has played a major role in business development globally. Nevertheless, business – IT (information technology) alignment is vital to ensure that IT and business objectives converge to support the overall strategic objectives of an organization. In most instances, however, business objectives and IT objectives appear to contradict. Many academics agree that alignment between the two and sustained over time could lead to favorable outcomes for an organization (El-Telbany and Elragal 250).

The communication gap between IT and the business department is the main cause of concern. It is observed that the gap continues to widen significantly and now needs bridging. The business segment may make several claims, including a lack of confidence in the IT system to provide reliable solutions, limited risk, progress, and problem visibility, or that measuring IT investment value is difficult. Conversely, the IT department may note that the business or an organization has failed to provide adequate resources for its projects, the business does not know what it requires, or it does not understand solutions to develop or its processes.

As such, the two sides argue that the other is responsible for misalignment. From a critical perspective, IT and business departments are both right. The purpose of this term paper is to present alternative solutions for closing the gap between IT and business.

The Challenge

As companies strive to innovate and introduce new IT tools, the gap between IT and business widens (Zhuang 13). Specifically, technological tools and business practices have coevolved fast in the last few decades. While coevolving changes have led to some commendable achievements, there have also been cases of IT failure to deliver its projected potential about the value to the business. As such, this situation has led to the business-IT gap.

Some authors have associated misalignment with failure rates in IT projects (Elmorshidy 819). These failures are however not acceptable in some organizations, and they are classified as projects that drain significant resources from organizations without results. Investments in IT projects are often capital intensive, and the IT – business gap reflects such failures.

Most IT departments have experienced the gap that emanates from the need to tackle critical business issues and deliver solutions, such as reducing costs, creating new robust models, identifying and implementing new strategies, and gaining competitive edge among others, and the capacity to use IT to implement effective business solutions. As previously noted, the business – IT gap may originate from a failure to communicate effectively between the business and IT departments. In some instances, however, IT may deliver anticipated business outcomes, but the firm’s practices are misaligned with the IT (Elmorshidy 819).

Still, organizational practices may be effective, but IT fails to deliver as expected. Further, it is also possible for both organizational practices and IT to work, but some unknown external forces or needs of the business have shifted. These few highlighted cases show that multiple factors could lead to the failure of IT projects.

The business may focus on strategies, external forces, and other internal issues. On the other hand, the IT department concentrates on platforms, applications, and robust legacy systems to run operations. IT and business communications tend to differ. For instance, a business may use an informal approach while IT could adopt formal, deterministic communications. Information exchange in these distinct communications is imperative for both the business and IT.

IT has resulted in new business opportunities, accelerated services delivery, more options, and enhanced operational efficiency, but business misalignment may emanate when exploiting these opportunities. Organizations should recognize that there would always be a gap in communication between IT specialists and corporate strategists. While one must appreciate the presence of the gap, it is imperative to find possible alternatives on how to bridge or close it altogether.

Closing the Gap

Given the existing gap between the IT and business, research is now grounded in attempts to find the best solutions for closing the gap based on tactical, strategic, and operational levels to develop business value using IT (Zhuang 13). Over the years, various stakeholders have focused on different strategies to close the gap between business and IT. Some of these approaches have considered architecture while others have focused on soft problems (the failure by the IT and business to collaborate on most issues and learn from one another).

Promoting communication was adopted, but the gap between IT and business persisted. Other approaches have created various software tools to capture diverse business processes as models. Consequently, detailed models have been created, but they are too complex to be understood by any other stakeholders other than their developers. Such models are further complicated by the lack of input from either the business or IT side.

Nevertheless, closing the gap could be possible. Of course, the IT and business need to work as a team, but these teams should engage in collaborative processes that include their roles. That is, both IT and business should work on projects that are executable together.

Some stakeholders have developed effective approaches aimed at closing the gap. Much of the success attained in attempts to close the gap between the IT and business is attributed to an architectural approach (El-Telbany and Elragal 250). In the architectural approach, the general focus is on different organizational aspects that are responsible for misalignment. Consequently, experts can dedicate their efforts toward specific issues, interact at the certain identified interface, and comprehend other components of an issue that affects their work. This approach ensures that the gap is addressed based on a principled approach.

An architectural approach can provide the same benefits for both the business and IT. Business and IT all have architectural approaches for their processes. Despite tremendous achievements realized in software architecture and recently in the growing field of business architecture, professionals and academics have both appreciated the existing gap between the two. Working from a commonly shared perspective of the architectural approach prepares the path for closing the gap more importantly. In this case, the architectural approach recognizes both functional and non-functional features of the business are similar to the features of IT.

Revenues and profits are a major means of determining business success. In this regard, they can only identify economic and other tangible values after getting facts and, therefore, fiscal health and sustainability of an organization can be ascertained.

An architectural model to business offers an opportunity to concentrate on specific business features by eliminating and comprehending different functional elements, outcomes, and interactions at the interface. Within this context, the business architecture reflects fundamental elements of organizational systems embodied together through various links with principles governing different processes, designs, and evolution.

On this note, architectures of the human social systems, which are the enterprises, come into perspective (Wagner, Beimborn and Weitzel 241). The human social systems are viewed as structures and abstract, which consist of different components that have distinct relationships with each other and to the environment. Human social systems present some unique challenges to IT departments, which is responsible for delivering technology-driven solutions to attain tangible value that can be measured. One major challenge is that social systems are inherently invisible because they generally reflect human relations, which are less controllable and deterministic.

As such, it is often difficult to gauge, control, and/or design social systems effectively. Largely, businesses adopt technologies to ensure that their systems are visible to their stakeholders. According to Wagner, Beimborn, and Weitzel (241), operational alignment and IT business values require a model that includes social aspects of IT and business components aimed at promoting interactions between IT and business at non-strategic levels in normal operations that can assist in closing the gap. By focusing on the social capital theory, the authors attempt to demonstrate the impacts of alignment on organizational performance.

They note that common approaches, such as ‘communicate more’, have failed to enhance alignment and bridge the gap (214). Also, Wagner, Beimborn, and Weitzel (241-272) show that social capital developed between business and IT departments creates alignment and eventually IT business value. The social capital theory offers a fundamental foundation for explaining how IT – business alignment can function.

By considering their findings, Wagner, Beimborn, and Weitzel (241) assert that an operational alignment is an important approach for the strategic alignment of IT. Therefore, managers should consider operational elements of alignment by going beyond communication to encourage knowledge-sharing, trust, and respect and ensure that IT usability and flexibility meet intermediate objectives for IT-business alignment.

The micro-architecture of a business depicts small structural aspects that form fundamental components of a business. From a micro-architecture level, shared practices are observed in business operations and interactions with various stakeholders. Most data captured and managed by the IT department reflect these micro-architecture elements based on different elements of internal organizational structures and trading partners. However, this simplicity fails somewhat to present the actual case because of possible variations in an organization. Hence, the business – IT gap persists.

Business architecture at the macro-level focuses on major components of an organization. Structure and functional aspects of an organization consider different functions of business units. These different structures and functions may necessitate reorganization at the macro-architecture level in which different roles and responsibilities of units are reviewed. From a professional perspective, Ashton of BP claims that ‘bridgers’ go beyond the liaison between the IT and business to include other roles of entrepreneurship meant to create value.

According to some Business-IT specialists, the major role of ‘bridgers’ is to assist the business to comprehend how IT works and support their business strategies, which may include identifying new opportunities, assisting businesses to develop strategies integrated with IT systems, and creating IT strategies that drive optimal benefits to an organization. As such, bridgers require broader views beyond specific IT applications. They should demonstrate organizational and people skills to allow them to handle rifts between business and IT units and assist in the education business and IT specialists. In this regard, bridgers must demonstrate confidence in both business and IT side.

The architectural approach for closing the business-IT gap also presents the eco-architecture level. In this case, the approach focuses on many enterprises that interact with an organization. These interactions are characterized by competition based on a competitive edge. The business ecosystem has been structured based on different roles. For instance, product development is used to depict specialization and cooperation in product development. IT is equally useful in these functions. Additionally, a business may find it useful to outsource other functions based on IT capabilities and business values of such functions.

Even so, different levels of business can still be standardized across various units. According to Ashton of BP, it may be assumed that various ways of conducting business require different systems. However, when all processes and functions are reviewed, it could be, for instance, that a single unit requires specific data concerning its operations faster because of its modes operation. In this case, closing the business-IT gap requires a good, clear architecture to allow smooth management and extraction of data from sophisticated systems depending on the needs of a given business unit. Core systems however may be the same for all units.

The ‘bridger’ has the responsibility of collecting user requirements but must focus on developing solutions through the most preferred central platforms. That is, they sustain entrepreneurial capabilities but develop solutions by relying on common platforms and data centers, which ultimately create economies of scale. Organizations may require various types of bridging to attain this goal.

Overall, the architectural approach may work, but it still requires some critical elements. First, a shared understanding is required between business and IT strategies. Second, business and IT must have a shared focus on the allocation of organizational resources and identify areas for trade-offs. Finally, both business and IT require a trustworthy functional relationship driven by supportive processes in daily operations, feedback, and innovative solutions.

The above-mentioned three factors can be achieved through some steps. First, open communication is imperative in closing IT – business gap. One can only solve a problem when facts are presented. Business and IT departments are fundamentally right in their diverse quests to achieve organizational strategic goals. IT is responsible for enhancing business productivity and success. However, when both departments fail to communicate effectively, then gaps start to emerge.

The IT department must keep other units aware of its role in advancing business. Second, IT must assess and ask business stakeholders their specific requirements and if IT is meeting such needs. Third, an organization should create a plan for IT and business strategy to address both business and IT issues noted. The plan should identify business and IT initiatives and then show how it will align them, prioritize tasks, demonstrate benefits expected necessary resources, and costs.

The strategic plan should be presented to senior executives for their support and inputs. It is imperative to recognize that organizational priorities are subjected to constant changes. As such, IT should realign its initiatives with business goals. Otherwise, it would be difficult or impossible to close the gap. Finally, IT – the business gap is always present in most instances. Also, intended practices may differ from implemented ones, which hinder attempts to close the gap (Zolper, Beimborn, and Weitzel 333-353). As such, it is imperative to review the plan occasionally to ensure that intended IT – business objectives are achieved.

An organizational culture that fosters relationship development can assist in overcoming communication and integration challenges between IT and business (Campbell, Kay, and Avison 653 – 664).

Conclusion

IT- business alignment depicts IT requirements and business objectives for an organization. Nevertheless, IT and business objectives always seem different, leading to a gap. As such, closing the IT- business gap is critical for organizational success. The business value created by IT is an important factor for assessment to determine how IT supports business to deliver its organizational objectives. This paper notes that the architectural approach can be used to close the gap between IT and business. In this case, all factors, including micro, macros, and other external forces, are assessed to determine the causes of the gap.

Shared processes, objectives, meanings, and knowledge delivered through effective communication can help to enhance collaboration processes toward closing the gap. Collaboration activities should be reflected in strategic and operational processes to deliver the desired outcomes. Planning and reviewing IT and business objectives to ensure that they always support and meet the goals of each other can advance the closing of the gap.

Works Cited

Campbell, Bruce, Robert Kay, and David Avison. “Strategic Alignment: A Practitioner’s Perspective.” Journal of Enterprise Information Management 18.6 (2005): 653 – 664. Print.

Elmorshidy, Ahmed. “Aligning IT with Business Objectives: A Critical Survival and Success Factor in Today’s Business.” The Journal of Applied Business Research 29.3 (2013): 819-828. Print.

El-Albany, Ola and Ahmed Elragal. “Business-information Systems Strategies: A Focus on Misalignment.” Procedia Technology 16 (2014): 250–262. Print.

Wagner, Heinz-Theo, Daniel Beimborn and Tim Weitzel. “How Social Capital Among Information Technology and Business Units Drives Operational Alignment and IT Business Value.” Journal of Management Information Systems 31.1 (2014): 241-272. Print.

Zhuang, Lee. “Bridging the Gap between Technology and Business Strategy: A Pilot Study on the Innovation Process.” Management Decision 33.8 (1995): 13 – 21. Print.

Zolper, Katja, Daniel Beimborn and Tim Weitzel. “When the River leaves its Bed: Analyzing Deviations between Planned and Actual Interaction Structures in IT Change Processes.” Journal of Information Technology 28 (2013): 333-353. Print.

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IvyPanda. (2020, September 1). Information Technology and Business Strategy Gap. Retrieved from https://ivypanda.com/essays/information-technology-and-business-strategy-gap/

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"Information Technology and Business Strategy Gap." IvyPanda, 1 Sept. 2020, ivypanda.com/essays/information-technology-and-business-strategy-gap/.

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IvyPanda. "Information Technology and Business Strategy Gap." September 1, 2020. https://ivypanda.com/essays/information-technology-and-business-strategy-gap/.

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IvyPanda. 2020. "Information Technology and Business Strategy Gap." September 1, 2020. https://ivypanda.com/essays/information-technology-and-business-strategy-gap/.

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IvyPanda. (2020) 'Information Technology and Business Strategy Gap'. 1 September.

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