Business-IT Alignment and IT Business Value

One of the key questions within the information systems discipline is about the business value impact of IT. This issue addresses both identification and measurement of the IT business value, and understanding of how the value is created and by which management actions it can be made sustainable. Although promising suggestions have been developed (e.g., Melville et al., MIS Quarterly 2004), still no consistent and agreed-upon framework for a comprehensive investigation of the business value of IT has arised. However, there is wide and considerable agreement that the source of IT business value is not only the existence of IT (in terms of hardware and software) rather than the complementary organizational resources and investments. Among these, business/IT alignment, IS usage, and the human IT resource (IT related skills and competences of the employees) are to be mentioned as the most important ones. Moreover, effetive and efficient IT sourcing can be seen as another crucial factor for creating new and exploiting existing IT potentials. Finally, we are also engaged in research into service-oriented architectures ( SOA) , which is increasingly relevant for a flexible and high-performing IT landscape.

Research into business/IT alignment is grounded in studies that have revealed the decisive role of bridging the gap between business and IT on strategic, tactical, and operational level for creating business value through IT. In this context, social alignment in terms of, e.g., relationships play a crucial role. Despite the fact that business/IT alignment has been one of the top concerns of IT executives over the past decade, there still exists no comprehensive framework for investigating, explaining, and measuring the actual impact of alignment. Consequently, our department is investigating business/IT alignment in order to help develop new and better insights to this elusive construct. In particular, we study dedicated governance structures and alignment mechanisms which prove to considerably leverage both the alignment level and business value in a measurable and significant way.

Although many firms are investigating the decision to adopt service-oriented architectures (SOA)  or have already started to migrate to SOA, no consensus about the concrete benefits, efforts and risks associated with the adoption of SOA as well as how to measure these is reached. Hence the question about the business value of SOA is another point of our research interest in the area of IT business value. The aim of answering this research question is to evaluate the specific business value (e.g., flexibility, integration of business processes, impact on costs, higher potential for business process outsourcing (BPO)) resulting from adopting SOA in concrete business scenarios and how to make it measureable and realizable. The results of our research can support firms in their decision whether or not to adopt SOA in their specific context. Furthermore our results reveal success factors for a successful adoption of SOA in order to maximize the business value due to implementing efficient and effective governance structures.

In recent years we have already conducted surveys to investigate the business value of IT among the top 1,000 German banks (2005), the top 1,500 US banks (2007), the top 1,000 German banks involved in IT outsourcing (2008), and the top 3,000 German organizations in the Services Industries (2009). The analyses delivered valuable insights into the IT value creation on firm as well as on business process level.

Research Team

Prof. Dr. Tim Weitzel, Dr. Daniel Beimborn, Nils Joachim, Frank Schlosser (contact)

Selected Publications