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The impact of shared domain knowledge on strategic information systems planning and alignment

The impact of shared domain knowledge on strategic information systems planning and alignment Page 1 of 12 Original Research The impact of shared domain knowledge on strategic information systems planning and alignment Authors: Background: Lack of alignment or harmony between information technology (IT) and Simla Maharaj business imperatives continues to plague organisations despite decades of research. Strategic Irwin Brown information systems planning (SISP) is the process of coordinating the relationship between IT and the business in order to steer alignment. Shared domain knowledge (SDK) is a factor Affiliations: Department of Information that is posited as important for improving both SISP and alignment, which is theorised to be Systems, University of Cape the main outcome of SISP. Town, South Africa Objectives: The aim of this article is to examine the impact of SDK on SISP and alignment. Correspondence to: Irwin Brown Method: Data were gathered from management consultants in a large, global IT organisation, through the use of a structured questionnaire, and analysed. Email: [email protected] Results: It was shown that SDK positively influences SISP characteristics and the alignment outcome. Specifically, it was found that high levels of rationality in SISP positively influenced Postal address: the intellectual dimension of alignment, whilst IT manager participation in business planning Private Bag, Rondebosch 7701, South Africa influenced the social dimension of alignment. SDK was found to have a bearing on all of the SISP characteristics measured (i.e. rationality, adaptation, business planning-SISP integration Dates: and IT manager participation in business planning). SDK was also found to positively impact Received: 02 Jan. 2014 both the intellectual and social dimensions of alignment. Accepted: 22 Apr. 2015 Published: 23 July 2015 Conclusion: The implications of the findings are that fostering a knowledge sharing How to cite this article: environment in organisations will help improve alignment, as well as the formal processes Maharaj, S. & Brown, I., designed to steer alignment such as SISP. 2015, ‘The impact of shared domain knowledge on strategic information systems planning and alignment’, Introduction South African Journal of Strategic information systems planning (SISP) has been established as a core activity in the Information Management 17(1), Art. #608, 12 pages. governance and management of information technology (IT) in organisations (Bechor et al. 2010; http://dx.doi.org/10.4102/ Hayward 2013). SISP is carried out in organisations primarily as a means to improve the level of sajim.v17i1.608 alignment between IT and business strategies and objectives (Karanja & Patel 2012). Both SISP and business-IT alignment have been consistently ranked as key issues amongst IT managers Copyright: © 2015. The Authors. globally, which highlights the importance of research into these phenomena (Luftman et al. 2013). Licensee: AOSIS SISP can be seen as the process by which alignment is achieved and is variously referred to as OpenJournals. This work is information systems strategic planning (ISSP), information systems (IS) strategy development licensed under the Creative or formation (i.e. formulation and implementation) and IS strategising (Peppard, Galliers & Commons Attribution License. Thorogood 2014). Business-IT alignment has been theorised to be a key outcome of SISP (Lederer & Salmela 1996; Osman, El Beltagi & Hardaker 2013; Yang, Pita & Singh 2014). Business-IT alignment, when viewed as an outcome of SISP, is defined as the state in which IT and business plans and strategies are coherently interrelated, as well as the degree to which there is congruence of vision between business and IT executives on business and IT strategy (Reich & Benbasat 2000; Silvius 2013). Shared domain knowledge (SDK) between business and IT executives is known to enhance efficiency and effectiveness of strategic IT management processes such as SISP (Ranganathan & Sethi 2002). There is evidence too that SDK has a direct impact on business-IT alignment, that is, there is not only an indirect impact through SISP (Preston & Karahanna 2009). The purpose of this research is hence to interrogate the various direct and indirect relationships between SDK, SISP and business-IT alignment in order to gain a better understanding of the dynamics between these important factors (Leonard & Seddon 2012). The research question posed is: What is the impact of shared domain knowledge on strategic information systems planning and its effectiveness, as measured by Read online: Scan this QR alignment? code with your smart phone or mobile device In the next section the key concepts underpinning the study will be elucidated, after which the to read online. research model is established. The methodology by which data were collected and analysed http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 2 of 12 Original Research is then outlined after which the results are presented. cited by Brown 2004; Teubner 2013). This definition for SISP Discussion and implications of the results follow, then the has persisted for over two decades, which demonstrates that article is concluded. SISP is an enduring activity for IT management in a dynamic and rapidly evolving field. Conceptual background Whilst there are a large number of methodologies to choose Shared domain knowledge, strategic information systems from when carrying out SISP, common to most are several planning characteristics and business-IT alignment and their key phases and activities. These methodology-independent interrelationships are the focus of attention in this study, so phases include strategic awareness (preparing for the SISP each will be discussed logically in turn. process), situational analysis (analysing the external and internal business and IS environment), strategy conception (conceiving and evaluating alternative scenarios), strategy Shared domain knowledge (SDK) formulation (selecting a strategy) and implementation SDK is defined as the ability of IT and business executives planning (Mirchandani & Lederer 2014; Newkirk & Lederer to mutually understand the key processes in the domains 2006). of business and IT respectively and to be able to mutually contribute and participate meaningfully in the activities of It has been found that success of SISP varies depending each domain (Chan, Sabherwal & Thatcher 2006). Related on the characteristics of the SISP approach being used in concepts that have received attention in literature include an organisation (Grover & Segars 2005; Osman et al. 2013; shared knowledge and knowledge sharing (Kearns & Silvius & Stoop 2013). Key SISP characteristics include the Lederer 2003; Pai 2005; Preston & Karahanna 2009; Reich & levels of rationality, adaptation and integration with business Benbasat 2000). Shared knowledge is described as ‘an planning (Segars & Grover 1999; Teo & King 1997). SISP understanding and appreciation among IT and line approaches exhibiting high levels of rationality, adaptation managers for the technologies and processes that affect their and integration have been found to be the most successful, mutual performance’ (Reich & Benbasat 2000), whilst Pai especially in the context of a volatile environment (Grovers & (2005) describes knowledge sharing as ‘a set of behaviours Segars 2005). The typical measure of SISP success is the extent that involve the exchange of information or assistance to of business-IT alignment achieved (Sylvius 2013). others’. Implicit in our definition of SDK are the elements of shared knowledge and knowledge sharing; hence, Rationality in SISP is recognised by comprehensiveness in literature related to the latter two concepts has relevance decision-making, a top-down flow of decision-making, a to discussions of SDK too (Preston & Karahanna 2009). focus on control and a high degree of formalisation (Chen A strong environment and culture of knowledge sharing is et al. 2010; Segars & Grover 1999). Adaptation is evidenced argued to be conducive to effective strategising (Teubner by frequent meetings to consider and revise plans and broad 2013). Kearns and Lederer (2003) examined how knowledge participation of stakeholders (Segars & Grover 1999). Business sharing (represented by the transfer of knowledge between planning-IS planning (BP-ISP) integration varies from having CIO and CEO) assists in generating competitive advantage. no integration at one extreme to a fully integrated process at SDK and knowledge sharing have been shown to be key the other extreme. Table 1 provides detailed definitions of considerations in achieving alignment between business and these elements. IT objectives (Chan et al. 2006; Pai 2005; Preston & Karahanna 2009; Reich & Benbasat 2000; Tan & Gallupe 2006). An aspect that is related to BP-ISP integration, but deserves Ranganathan and Sethi (2002) examined the impact of SDK separate consideration in the context of SISP is the level of on rationality in strategic IT decisions and found a strong IT manager participation in business planning (Kearns & and positive influence. Whilst issues such as competitive Lederer 2003). Whilst organisations may have mechanisms advantage, alignment and rationality in decision-making and structures for BP-ISP integration, the level of IT manager are associated with SISP, there have been few studies that participation in business planning may still vary. For explicitly link SDK to SISP; hence, there still remains a research gap on how these phenomena interrelate. The next example, an IT manager may be present at business planning section discusses key characteristics associated with SISP. sessions, but if not fully part of the proceedings, and if their voice is not taken in to account, then participation and involvement of IT managers will still be low (Cordoba 2009). Strategic information systems planning (SISP) and its characteristics Strategic information systems planning (SISP) Improving SISP has persisted as a key issue for IT executives eectiv ff eness – Alignment for several decades now (Luftman et al. 2013); hence, research on this phenomenon remains relevant to pursue. SISP effectiveness has been defined as the extent to which SISP is defined as a strategic endeavour that involves key planning objectives have been fulfilled (Premkumar & identification of a prioritised portfolio of IT applications for King 1994). Key objectives of SISP include alignment an enterprise, together with the necessary infrastructure, between business and IT objectives, analysis of the resources, organisational structure and change management business and IT environment, improved cooperation considerations necessary for implementation (Baker 1995 as between stakeholders to ensure plan implementation and http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 3 of 12 Original Research TABLE 1: Strategic information systems planning process — Characteristics. Characteristic Definition Comprehensiveness The extent to which an organisation aemp tt ts to be exhaustive or inclusive in making and integrating decisions Flow The locus of authority or devolution of responsibilities for strategic planning (top-down, bottom-up, interactive) Focus The balance between creativity and control orientations inherent within the strategic planning system Formalisation The existence of structures, techniques, written procedures and policies that guide the planning process Frequency The frequency of planning activities or cycles and, relatedly, the frequency of evaluation and revision of strategic choices (occasional vs continuous) Participation The breadth of involvement in strategic planning (narrow vs wide) BP-ISP integration The level of integration between business planning and SISP (business-led, IT-led, reciprocal, full integration or proactive) (Reich & Benbasat 2000; Teo & King 1997) IT manager participation in business planning IT manager aendance, participa tt tion and involvement in business planning (Kearns & Sabherwal 2007) Sources: Grover, V. & Segars, A.H., 2005, ‘An empirical evaluation of stages of strategic information systems planning: Paerns tt of process design and eectiv ff eness’ , Information & Management 42, 761–779. http://dx.doi.org/10.1016/j.im.2004.08.002 ; Teo, T. & King, W., 1997, ‘Integration between business planning and information systems planning: An evolutionary contingency perspective’, Journal of Management Information Systems 14(1), 185–214. improvements in organisational capability to carry out SISP H1: BP-ISP integration positively influences the social (Segars & Grover 1999; Yang et al. 2014). From amongst dimension of alignment these objectives, alignment has been persistently noted as H2: BP-ISP integration positively influences the the key objective of SISP (Chen et al. 2010; Karanja & Patel intellectual dimension of alignment 2012; Silvius 2013). SISP rational-adaptation and alignment The concept of alignment is broad and multi-faceted (Chan Grover and Segars (2005) demonstrate that a process & Reich 2007). Alignment can be viewed as a process or characterised by high levels of both rationality and adaptation an outcome (Karpovsky & Galliers 2015). The perspective is associated with successful SISP. Success was measured in adopted in this study is that it is the outcome of SISP. their study by assessing, amongst other elements, alignment. When viewed as an outcome of SISP, key dimensions of The measure of alignment they used included items relating alignment have been identified as the intellectual and to both the intellectual and social dimensions, hence social dimension (Reich & Benbasat 2000). The intellectual supporting the following hypotheses: dimension is defined as the state in which a set of high- quality interrelated business plans and IT plans exist (Reich H3: Rationality in SISP positively influences the social & Benbasat 1996). The social dimension refers to the state dimension of alignment in which IT and business executives understand and are H4: Rationality in SISP positively influences the committed to the business and IT mission, objectives and intellectual dimension of alignment plans (Reich & Benbasat 2000). Reich and Benbasat (2000) H5: Adaptation in SISP positively influences the social further distinguish between short-term social alignment – dimension of alignment the degree of mutual understanding between business H6: Adaptation in SISP positively influences the and IT executives of business and IT objectives – and long- intellectual dimension of alignment term alignment – the congruence of shared vision between business and IT executives. Few studies have considered IT manager participation in business planning both the intellectual and social dimensions in one study, due and alignment to a lack of conceptual clarity around these dimensions and IT manager participation in business planning has been their measurement (Chan & Reich 2007; Schlosser, Wagner shown to lead to positive outcomes such as achieving & Coltman 2012). alignment (Chi et al. 2005; Kearns & Lederer 2003; Kearns & Sabherwal 2007). There needs to be caution against paying lip service to the concept of participation (Cordoba 2009), Hypothesis development for example inviting the IT manager to be part of business Drawing from the literature on SDK, SISP and alignment, a planning activities, but not taking on board their suggestions set of hypotheses to be tested were derived. These will be and input: discussed in turn. H7: IT manager participation in business planning BP-ISP integration and alignment positively influences the social dimension of alignment H8: IT manager participation in business planning Reich and Benbasat (2000) demonstrated a positive positively influences the intellectual dimension of relationship between BP-ISP integration and the social alignment dimension of alignment. BP-ISP integration is also expected to have an impact on the intellectual dimension of alignment. Shared domain knowledge and SISP For example Brown (2004) suggests that greater BP-ISP characteristics integration yields a more useful and comprehensive IS plan, signalling high levels of intellectual alignment. Hence the The benefits of SDK for IT strategic management have been following hypotheses are supported: well reported. Ranganathan and Sethi (2002) demonstrate http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 4 of 12 Original Research its positive impact on rationality in strategic IT decision- making. Rationality was operationalised by dimensions of Shared Domain Knowledge (SDK) comprehensiveness and formalisation, attributes noticeable in a rational SISP process (Segars & Grover 1999). SDK has been associated with IT manager participation in business planning H11 BP-ISP Integration H14 H13 H1 and business manager participation in SISP (Kearns & H2 Sabherwal 2007; Reich & Benbasat 2000); a characteristic of H3 Social Dimension SISP adaptation is business participation in SISP (Grover H9 SISP Rationality of Alignment H4 & Segars 2005). SDK has also been associated with BP-ISP H5 integration (Kearns & Sabherwal 2007; Reich & Benbasat Intellectual 2000). Hence, the following hypotheses are supported: H6 H10 SISP Adaptation Dimension H7 of Alignment H9: Shared domain knowledge positively influences H8 IT Participation rationality in SISP H12 in H10: Shared domain knowledge positively influences Business Planning adaptation in SISP FIGURE 1: Conceptual model. H11: Shared domain knowledge positively influences BP-ISP integration SDK was measured using the Ranganathan and Sethi (2002) H12: Shared domain knowledge positively influences IT instrument supplemented by measures from Kearns and manager participation in business planning Sabherwal (2007). SISP rationality was operationalised in this study by the dimensions of comprehensiveness and Shared domain knowledge and alignment formalisation as in Ranganathan and Sethi (2002). The A lack of shared knowledge between business and IT is measurement scales for comprehensiveness and formalisation argued to be one of the key challenges to achieving alignment were adapted from instruments developed by Segars and (Chan & Reich 2007). Chan et al. (2006) demonstrate the effect Grover (1999). For the higher order characteristic of SISP of SDK on the intellectual dimension of alignment, whilst adaptation, dimensions of participation and frequency were Reich and Benbasat (2000) and Preston and Karahanna (2009) used, again using measures developed by Segars and Grover demonstrate this impact on the social dimension of alignment (1999). IT manager participation in business planning was in the long term and short term respectively. Hypotheses measured with the instrument developed by Kearns and supported are: Sabherwal (2007). H13: Shared domain knowledge positively influences the For BP-ISP integration the measure by Teo and King (1997) social dimension of alignment was used, which provided a typology of integration varying H14: Shared domain knowledge positively influences the from administrative (little or no integration) to sequential intellectual dimension of alignment (SISP follows business planning) to reciprocal (SISP and business planning are mutually interacting) to full integration The conceptual model illustrating these 14 hypotheses is (no separate SISP and business planning). Reich and Benbasat illustrated in Figure 1. (2000) also identified proactive integration (SISP precedes business planning) as a type of integration, so this mode was also added to the measure. Respondents were asked to select Research methodology which description most closely fitted the BP-ISP integration The research methodology followed a positivist, quantitative, level in the organisation they were involved with. hypothetico-deductive approach. Further details on the research instrument, the data collection process and the data The research questions used for measuring the social analysis procedure are provided in this section. dimension of alignment construct were adapted from an instrument from a study by Cohen and Toleman (2006). Development of the measures for research This instrument included both short-term and long- constructs term alignment measures. For measuring the intellectual dimension of alignment measures were adapted from an The measures used in this study were based on validated instruments from relevant studies (Cohen & Toleman instrument by Kearns and Lederer (2003). 2006; Kearns & Lederer 2003; Kearns & Sabherwal 2007; Ranganathan & Sethi 2002; Reich & Benbasat 2000; Segars Data collection & Grover 1999; Teo & King 1997). These measures and their Sampling sources are illustrated in Appendix 1. A seven-point Likert scale ranging from 1 for ‘strongly disagree’ to 7 for ‘strongly The target population for this study consisted of consultants agree’ was employed in the questionnaire for all items except from a large, global IT organisation who were based at BP-ISP integration, which employed a typology of integration companies that had conducted SISP in the last 10 years. These modes as per Teo and King (1997). consultants had participated in SISP at the specific company http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 5 of 12 Original Research in which they were based. Most studies in SISP rely on the Frequency tables based on the demographic data in the views of the IT executive to represent the organisation, whilst a responses were developed. The next part of the data few also include the business executive. The views of external analysis was the execution of a factor analysis exercise consultants are not often represented in SISP research. The to validate the items and to identify if there were any advantage of obtaining a consultant perspective is that it may structures in the relationships between items. The offer a perhaps less biased view of SISP in organisations than Cronbach’s alpha coefficient for the final set of research that of IT or business executives. Random sampling was used items was thereafter applied to test reliability. Finally the so that each population member had an equal chance of being hypotheses developed in this study were tested using selected. Three-hundred consultants from the large global IT multiple linear regression. organisation were asked to respond to the questionnaire. Data analysis and results Pilot testing Demographic profile The questionnaire was first pre-tested by three academics The demographic profile of the respondents is illustrated with experience in this area of research. Wording of questions in the tables below. Table 2 reveals that 72% of the sample (such as tenses) was amended as a result. A pilot test was had senior executive experience and 74% had more than thereafter conducted with five IT consultants, three of whom 10 years of IS experience. Approximately 90% of the were from the large, global IT organisation with two others respondents had up to 15 years of SISP experience with from other organisations. Based on the feedback, some about 9% of the respondents having more than 15 years of questions were reworded and some questions were removed SISP experience. as the respondents felt that they were repetitive. Generally, the questionnaire was well understood with positive Diverse industries were represented in the sample. feedback, for example that the instructions were clear and the Manufacturing and finance had the most responses – length of the questionnaire was adequate. The changes that about 32% and 31% of the sample respectively (Table 3). were suggested in the feedback were made accordingly and The transport, engineering, service, government, retail, the final questionnaire was posted on a website to be used for communications and IT industries had less than 10% data collection. responses each, but together they accounted for about 35% of the responses. Other descriptive data revealed that most organisations were large in terms of annual revenue. About Data collection procedure The online questionnaire was hosted on a general survey TABLE 2: Level of experience of respondents. website and all consultants in the sample were sent an email Item f % which included the link to the questionnaire. Confidentiality Level of management experience of responses was assured and respondents were asked to Junior 5 8.6 provide their contact details in the survey if they wished to Middle 10 17.2 receive a copy of the findings of this study. Email reminders Senior 42 72.4 were sent every two weeks for one month to ensure Number of years of IS experience <5 7 12.1 that the maximum number of consultants answered the 5–10 7 12.1 questionnaire. The responses to the questionnaire were saved 10–15 17 29.3 to the website’s database and downloads of the responses 15–20 15 25.9 were available at all times. >20 11 19.0 Number of years of SISP experience Response rate <5 20 34.5 5–10 25 43.1 Three-hundred consultants from one large, global IT 10–15 7 12.1 organisation were targeted for this survey and on closure of 15–20 4 6.9 the online survey, a total of 175 consultants had responded >20 1 1.7 to the survey. On analysis of the responses, it was found that 59 questionnaires were answered completely, representing TABLE 3: Industry in which SISP was conducted. a 19.7% response rate. Although low, this was deemed an Industry f % acceptable response rate for this type of survey, as it is widely Manufacturing 19 32.8 acknowledged that surveys targeting senior level managers Communications 5 8.6 and professionals suffer from low response rates. Other SISP Finance 18 31.0 survey-based studies have had similar response rates (e.g. Retail 1 1.7 Cohen 2008; Mirchandani & Lederer 2014). IT 3 5.2 Government 4 6.9 Transport 3 5.2 Data analysis procedure Engineering 1 1.7 The first part of the data analysis process was to conduct Service 3 5.2 basic descriptive statistics on the questionnaire responses. f, frequency http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 6 of 12 Original Research TABLE 4: Descriptive statistics. 38% had revenues in excess of USD 500 million and only 9% Item M SD had revenues of less than USD 5 million. Shared domain knowledge (SDK) 4.9 0.97 SISP rationality (RATIONAL) 4.4 1.13 Construct and discriminant validity SISP adaptation (ADAPT) 4.9 1.19 IT manager participation business planning (ISBP) 4.3 1.53 The questionnaire was derived from previously validated Social dimension of alignment 4.5 1.23 instruments, so confirmatory factor analysis (CFA) was Intellectual dimension of alignment 4.5 1.23 used to assess construct and discriminant validity (Tan & M, mean; SD, standard deviation Teo 2000). Commonly applied decision rules were used, including using a minimum eigenvalue of 1 as a cut-off value each other’s unique contribution and challenges. The mean for extraction, deleting items with factor loadings of less scores for SISP rationality (RATIONAL) and IT manager than 0.5 on all factors, or greater than 0.5 on two or more participation in business planning (ISBP) were about 4, factors, using varimax rotation and so on (Tan & Teo 2000). implying respondents were on average neutral with respect Through progressive refinement, a set of validated constructs to the extent to which their organisations exhibited a high emerged. degree of rationality and participation in business planning. SISP adaptation (ADAPT), social alignment and intellectual Appendix 2 shows the factor loadings achieved after alignment had means that were closer to 5. This reveals that elimination of items. SDK loaded on two factors – one related respondents on average agreed that there was a high degree to business knowledge of IS (SDK_BUS) and the other related of SISP adaptation. They also agreed on average that there to IS knowledge of business (SDK_IS). Together these two was a state within the respective companies where business sub-factors made up SDK. Also loading as distinct factors and IT executives understood and were committed to the were SISP rationality (RATIONAL) and SISP adaptation business and IT mission, objectives and plans, and they (ADAPT). It was expected that rationality would have two agreed on average that there was a close linkage between the sub-factors – comprehensiveness and formalisation – but IS strategy and business strategy. these two loaded together as a single factor of rationality (RATIONAL), which was nevertheless consistent with their BP-ISP integration types common underlying meaning. Adaptation too was expected to have two factors – participation and frequency – but once In terms of BP-ISP integration, just over 48% of organisations again it loaded as a single factor (ADAPT), which was again exhibited sequential integration, which means that a consistent with the commonality in meaning. IT manager sequential relationship existed between business planning participation in business planning (ISBP) loaded as a separate and SISP, with IS plans primarily focused on providing factor, as expected. support for business plans. About 19% of the companies exhibited administrative integration, which represents a Amongst the alignment factors two major dimensions weak relationship between business planning and SISP. were expected – the social dimension of alignment and About 16% of the companies exhibited reciprocal integration, representing a reciprocal and interdependent relationship intellectual dimension of alignment. The social dimension between business planning and SISP, in which SISP plays had two separate sub-factors – long-term alignment (SOC_ a role in both supporting and influencing business plans. LT ALIGN) and short-term alignment (SOC_STALIGN). The About 12% of the sample claimed there was full BP-ISP intellectual dimension of alignment also had two sub-factors – integration with little distinction between business planning IS plan-business plan alignment (INT_ISPBPALIGN) and processes and SISP processes. Only 5% of the sample showed business plan-IS plan alignment (INT_BPISPALIGN). The proactive BP-ISP integration in which IS objectives precede refined constructs thus exhibited adequate construct and the formulation of business objectives and are used as input discriminant validity. to their development. Hence, all BP-ISP integration types were present, demonstrating the diversity of the sample. Instrument reliability In order to assess reliability of the refined instrument, the Multiple linear regression Cronbach’s alpha was calculated for each construct (Tan & Multiple linear regression was used to test the 14 hypotheses Teo 2000). Reliability is indicated if the Cronbach’s alpha is formulated in this study. The dependent variables against greater than 0.7. The lowest Cronbach’s alpha was 0.76, thus which the independent variables were regressed were demonstrating that all measures exhibited reliability (see the social dimension of alignment, intellectual dimension Appendix 2). of alignment and the SISP characteristics (rationality, adaptation, BP-ISP integration and IT manager participation Items means and standard deviations in business planning). The common dependent variable Table 4 shows that the mean for SDK is close to 5, which was SDK. The results of the multiple linear regression reveals that respondents on average agreed that IT and are illustrated in Table 5 together with the associated business executives had the ability to understand and were hypotheses. p-values that were less than or equal to 0.05 were considered significant. able to participate in the others’ key processes and to respect http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 7 of 12 Original Research TABLE 5: Results of multiple linear regression. Dependent item Hypothesis Independent item Beta p-level Social dimension of alignment H1 BP-ISP integration −0.04 0.624 H3 Rationality 0.15 0.124 H5 Adaptation 0.07 0.550 H7 IT manager participation in business planning 0.55 0.000 H13 SDK 0.25 0.022 Intellectual dimension of alignment H2 BP-ISP integration 0.05 0.620 H4 Rationality 0.26 0.026 H6 Adaptation 0.05 0.726 H7 IT manager participation in business planning 0.21 0.091 SISP characteristics H14 SDK 0.38 0.006 Rationality H9 SDK 0.41 0.001 Adaptation H10 SDK 0.68 0.000 BP-ISP integration H11 SDK 0.52 0.000 IT manager participation in business planning H12 SDK 0.65 0.000 knowledge of IS and IS knowledge of business), intellectual Business dimension of alignment (IS plan-business plan alignment and IS Knowledge of Knowledge Business business plan-IS plan alignment) and the social dimension of of IS alignment (long-term and short-term alignment). Shared Domain Knowledge Discussion and implications (SDK) IS Plan – SISP characteristics and alignment Business Plan H9 H14 The social and intellectual dimensions of alignment respec- Intellectual Alignment SISP Rationality Dimension tively were used as a measure of SISP effectiveness. The H4 of Alignment Business Plan – impact of the SISP characteristics of rationality, adaptation, H12 H13 IS Plan BP-ISP integration and IT manager participation in business Alignment planning were tested. It was found that there was support only for IT manager participation in business planning positively influencing the social dimension of alignment. The Long-Term positive influence arises because IT manager participation in Alignment IT Participation Social business planning involves IT executives regularly attending H7 in Business Dimension of business meetings, participating in setting business goals and Planning Alignment Short-Term objectives and being involved early in the meetings for major Alignment projects. All of these actions ultimately contribute to the social dimension of alignment: the shared vision of business FIGURE 2: Refined conceptual model. and IS executives on the role of IS in the organisation and the mutual understanding of each other’s domains. This finding It was noticeable that all hypotheses concerning the impact is in keeping with the results of Kearns and Sabherwal (2006). of SDK (H9 to H14) were supported, meaning that SDK had The lack of influence of rationality, BP-ISP integration and an impact on all SISP characteristics (rationality, adaptation, adaptation would suggest that formalised SISP procedures, BP-ISP integration and IT manager participation in business structural mechanisms for BP-ISP integration, business planning), as well SISP effectiveness (social dimension of executive participation in SISP sessions and frequent SISP alignment and intellectual dimension of alignment). In terms meetings are less useful for achieving social alignment. of the influence of SISP characteristics on alignment, the Business executives would likely not have time to attend too social dimension of alignment was impacted by IT manager many SISP sessions, so a better strategy is for the IT manager participation in business planning only (H7) and not by to go to the business planning meetings and there make rationality, adaptation or BP-ISP integration. The intellectual contributions for the strategic use of IT in organisations. dimension of alignment was impacted by rationality only (H4) and not adaptation, BP-ISP integration or IT manager In terms of the influence of the aforementioned SISP participation in business planning. characteristics on the intellectual dimension of alignment, there was only support for SISP rationality positively influencing The results in Table 5 lead to the refined conceptual model, as intellectual alignment. So, a high level of comprehensiveness, shown in Figure 2. SISP adaptation and BP-ISP integration were formalised procedures and documentation of outputs in SISP only weakly associated with the alignment dimensions and so ensures that the documented IS plan reflects the business were removed from the model. The factor analysis revealed a mission and goals and supports the business strategies. In a two-factor structure for shared domain knowledge (business like manner, it ensures that the business plan can refer to the http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 8 of 12 Original Research IS plan and that it utilises the strategic capability of IS and Summary contains reasonable expectations of IS. The lack of influence of In summary, the findings suggest that organisations should adaptation, BP-ISP integration and IT manager participation focus on creating a knowledge sharing environment in business planning perhaps indicates that for achieving between business and IT and seek for ways to strengthen IS alignment on the intellectual level, the best strategy is a highly knowledge of business and business knowledge of IS. In this rational SISP process that follows a formal methodology and way SISP characteristics and outcomes such as alignment procedure and yields a comprehensive well-documented IS will be improved. plan, with links and references to business plans and strategies. In all, these findings yield interesting insights into the Limitations and future research role of SISP in achieving alignment and how the different The target population of this study consisted of consultants characteristics affect alignment. Segars and Grover (1999) show from one large, global IT organisation, based at various through cluster analysis that a SISP process characterised by customer sites around the world, who participated or observed rationality and adaptation is associated with SISP effectiveness the SISP in the company where they were based. Even though (alignment, analysis, cooperation and capability improvement the responses were based on various types of organisation from respectively). Their study never tests the relationships between various industries, including responses from consultants only the separate SISP characteristics and the separate dimensions could be a limitation of this study. Bias could result from these of SISP effectiveness. This study makes a contribution by consultants possibly having a deeper knowledge of IS, which empirically testing the relationships between specific SISP could have resulted in them responding to the questionnaire characteristics and alignment and reveals that the rationality from an IS perspective. A suggestion for further research dimension of SISP is important for intellectual alignment, whilst could be to test the research model that was developed in this for social alignment, the IT manager participation in business study by including various roles from business and IT in the planning might be more important than a formal SISP process. target population. A further limitation is the small number of completed questionnaires on which the conclusions of this study were based. Even though there were 175 responses, only SDK and SISP characteristics 59 of the 175 were complete. Future research could try to elicit The SISP characteristics of rationality, adaptation, BP-ISP a higher response rate in order to test if all the hypotheses in integration and IT manager participation in business planning this study still hold true with more response data. have been shown to be important, not only to alignment, but also to other measures of SISP effectiveness such as Conclusion analysis, cooperation, capability improvement, IS function performance, IS contribution to business performance and The objective of this study was to investigate the impact of improved business performance itself (Kearns & Sabherwal SDK on SISP and its effectiveness, as measured by alignment. 2007; Premkumar & King 1994; Segars & Grover 1999). Hence, The research model included the examination of how SDK it is important that ways of enhancing these characteristics impacted the SISP process dimensions (rationality, adaptation, are found. SDK was found to positively influence all of the BP-ISP integration and IT manager participation in business aforementioned characteristics. Hence, improving SDK (i.e. IS planning), how the SISP process dimensions (rationality, knowledge of business and business knowledge of IS) provides adaptation, BP-ISP integration and IT manager participation for an important strategy for improving SISP in organisations. in business planning) impacted SISP effectiveness (measured by social and intellectual alignment) and lastly how SDK impacted SISP effectiveness (i.e. alignment). Few, if any, SDK and SISP eectiv ff eness – Alignment studies have investigated all these facets in a single study. With the overall SISP effectiveness being measured by the social dimension of alignment and the intellectual dimension On a methodological level, the study has contributed by of alignment, SDK was tested against both and it was found demonstrating the validity and reliability of measures for that there was support for SDK positively influencing both investigating SISP characteristics, alignment and SDK, these the social and intellectual dimensions of alignment. The being taken from disparate sources. The study reveals a findings suggest that achieving social alignment may not two-factor structure for SDK (business knowledge of IS require a detailed formalised SISP process. Rather, through and IS knowledge of business), the intellectual dimension improving SDK in an organisation, a shared vision and of alignment (IS plan-business plan alignment and vice shared understanding between business and IS executives versa) and the social dimension of alignment (long-term can be achieved. Coupled with IT manager participation in and short-term alignment respectively), in keeping with the business planning, which itself is strengthened by SDK, the conceptualisation of these constructs. social dimension of alignment can be strongly realised. The study makes a theoretical contribution by revealing the For achieving intellectual alignment a rational SISP process is impact of SISP on two dimensions of alignment – the social and still needed, but even in this case, SDK will be of complementary intellectual respectively. In so doing it is shown that a formal, value both to improving levels of rationality and directly to comprehensive rational SISP process is the key driver of the improving the intellectual dimension of alignment. intellectual dimension of alignment, whilst the social dimension http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 9 of 12 Original Research Karanja, E. & Patel, S.C., 2012, ‘A review of research trends in strategic information of alignment is more likely achievable by the IT manager systems planning’, International Journal of Business Information Systems 10(2), participating in business planning rather than vice versa (i.e. 151–177. http://dx.doi.org/10.1504/IJBIS.2012.047145 business executives participating in SISP). Shared domain Karpovsky, A. & Galliers, R.D., 2015, ‘Aligning in practice: From current cases to a new agenda’, Journal of Information Technology 30, 136–160. http://dx.doi. knowledge between business and IT executives positively org/10.1057/jit.2014.34 influences both SISP and the dimensions of alignment. Kearns, G.S. & Lederer, A.L., 2003, ‘A resource-based view of IT strategic alignment: How knowledge sharing creates competitive advantage’, Decision Sciences 34(1), 1–29. http://dx.doi.org/10.1111/1540-5915.02289 These findings are of practical benefit, as three actions for Kearns, G.S. & Sabherwal, R., 2006, ‘Strategic alignment between business and information technology: A knowledge-based view of behaviours, outcomes, and organisations to implement can be garnered, these being: (1) consequences’, Journal of Management Information Systems 23(3), 129–162. http://dx.doi.org/10.2753/MIS0742-1222230306 improve rationality of SISP processes as a means to improving Kearns, G.S. & Sabherwal, R., 2007, ‘Antecedents and consequences of information the intellectual dimension of alignment; (2) involve IT systems planning integration’, IEEE Transactions on Engineering Management managers strategically in business planning to improve the 54(4), 628–643. http://dx.doi.org/10.1109/TEM.2007.906848 Lederer, A.L. & Salmela, H., 1996, ‘Toward a theory of strategic information systems social dimension of alignment; (3) establish a knowledge planning’, Journal of Strategic Information Systems 5(3), 237–253. http://dx.doi. sharing culture and implement mechanisms to build shared org/10.1016/S0963-8687(96)80005-9 domain knowledge in the organisation. Implementing these Leonard, J. & Seddon, P., 2012, ‘A meta-model of alignment’, Communications of the Association for Information Systems 31(11), 230–259. initiatives will improve both SISP and the aforementioned Luftman, J., Zadeh, H.S., Derksen, B., Santana, M., Rigoni, E.H. & Huang, Z.D., facets of alignment. 2013, ‘Key information technology and management issues 2012–2013: An international study’, Journal of Information Technology 28(4), 354–366. http:// dx.doi.org/10.1057/jit.2013.22 Mirchandani, D.A. & Lederer, A.L., 2014, ‘Autonomy and procedural justice in strategic Acknowledgements systems planning’, Information Systems Journal 24(1), 29–59. http://dx.doi. org/10.1111/j.1365-2575.2012.00419.x Competing interests Newkirk, H.E. & Lederer, A.L., 2006, ‘The eectiv ff eness of strategic information systems planning under environmental uncertainty’, Information & Management The authors declare that they have no financial or personal 43(4), 481–501. http://dx.doi.org/10.1016/j.im.2005.12.001 relationships that may have inappropriately influenced them Osman, E., El Beltagi, I.M. & Hardaker, G., 2013, ‘The impact of leadership orientation in writing this article. on strategic information systems planning processes, with an application to Libyan organizations’, Information Technology for Development November, 1–27. http:// dx.doi.org/10.1080/02681102.2013.856283 Pai, J.-C., 2005, ‘An empirical study of the relationship between knowledge sharing Authors’ contributions and IS/IT strategic planning (ISSP)’, Management Decision 44(1), 105–122. http:// dx.doi.org/10.1108/00251740610641490 S.M. (University of Cape Town) conducted the overall study Peppard, J., Galliers, R.D. & Thorogood, A., 2014, ‘Information systems strategy as whilst registered as a student at the University of Cape practice: Micro strategy and strategizing for IS’, Journal of Strategic Information Systems 23(1), 1–10. http://dx.doi.org/10.1016/j.jsis.2014.01.002 Town. I.B. (University of Cape Town) supervised the study Premkumar, G. & King, W.R., 1994, ‘Organisational characteristics and information and contributed to writing the article. systems planning: An empirical study’, Information Systems Research 5, 75–109. http://dx.doi.org/10.1287/isre.5.2.75 Preston, D.M. & Karahanna, E., 2009, ‘Antecedents of IS strategic alignment: A References nomological network’, Information Systems Research 20(2), 159–179. http:// dx.doi.org/10.1287/isre.1070.0159 Bechor, T., Neumann, S., Zviran, M. & Glezer, C., 2010, ‘A contingency model for Ranganathan, C. & Sethi, V., 2002, ‘Rationality in strategic information estimating success of strategic information systems planning’, Information & technology decisions: The impact of shared domain knowledge and IT unit structure’, Management 47(1), 17–29. http://dx.doi.org/10.1016/j.im.2009.09.004 Decision Sciences 33(1), 59–86. http://dx.doi.org/10.1111/j.1540-5915.2002. tb01636.x Brown, I.T.J., 2004, ‘Testing and extending theory in strategic information systems planning through literature analysis’, Information Resources Management Journal Reich, B.H. & Benbasat, I., 1996, ‘Measuring the linkage between business and 17(4), 19–47. http://dx.doi.org/10.4018/irmj.2004100102 information technology objectives’, MIS Quarterly 20, 453–468. http://dx.doi. org/10.2307/249542 Chan, Y.E. & Reich, B.H., 2007, ‘IT alignment: What have we learned?’, Journal of Information Technology 22(4), 297–315. http://dx.doi.org/10.1057/palgrave. 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Engineering 5(4), 243–257. http://dx.doi.org/10.1007/s12599-013-0279-z 08.002 Yang, J., Pita, Z. & Singh, M., 2014, ‘Measurement of determinants for enhancing Hayward, J., 2013, ‘Vision and strategic information systems planning in the UK HE strategic information systems planning (SISP) success and dynamic capabilities Sector’, Proceedings of the UK Academy for Information Systems Conference 2013, in South Korea’, Proceedings of the 25th Australasian Conference on Information Paper 13, viewed from http://aisel.aisnet.org/ukais2013/13 Systems, 8–10 December, Auckland, New Zealand. Appendix starts on the next page → http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 10 of 12 Original Research Appendix APPENDIX 1: Item measures. Item Variable Source Shared domain knowledge measure Business knowledge SDK1 Business executives recognised the potential of IS as a competitive weapon. Ranganathan and Sethi (2002) SDK2 Business executives recognised IS as a tool to increase productivity. Ranganathan and Sethi (2002) SDK3 Business executives were highly knowledgeable about the firm’s information technology assets and opportunities. Kearns and Sabherwa (2007) SDK4 Business executives agreed that information technology could have important intangible benefits that should be Kearns and Sabherwal (2007) funded. IS knowledge SDK5 IS executives were highly knowledgeable about business operations of the firm. Ranganathan and Sethi (2002) SDK6 IS executives were highly knowledgeable about business strategies of the firm. Ranganathan and Sethi (2002) SISP rationality measure Comprehensiveness COMP1 The company aemp tt ted to be exhaustive in gathering information relevant for SISP. Segars and Grover (1999) COMP2 Before a decision was made, each possible course of action was thoroughly evaluated. Segars and Grover (1999) COMP3 The company aemp tt ted to determine optimal courses of action from identified alternatives. Segars and Grover (1999) COMP4 There was little trial-and-error in the SISP process. Segars and Grover (1999) COMP5 Decisions were delayed until they were sure that all alternatives were evaluated. Segars and Grover (1999) Formalisation FORM1 Policies and procedures greatly influenced the process of SISP within the firm. Segars and Grover (1999) FORM2 Formalised planning techniques in the SISP process were utilised. * Segars and Grover (1999) FORM3 The process for strategic planning was very structured. Segars and Grover (1999) FORM4 Written guidelines to structure strategic IS planning existed in the organisation. * Segars and Grover (1999) FORM5 The process and outputs of strategic IS planning were formally documented. Segars and Grover (1999) SISP adaptation measure Participation PART1 Business executives were actively involved in strategic IS planning. Segars and Grover (1999) PART2 A variety of functional area managers participated in the process of IS planning. Segars and Grover (1999) PART3 The process for strategic IS planning included numerous participants. Segars and Grover (1999) PART4 Strategic IS planning was a relatively isolated organisational activity (R). * Segars and Grover (1999) PART5 The level of participation in SISP by diverse interests of the organisation was high. * Segars and Grover (1999) Frequency FREQ1 Conformance to strategic plans were constantly evaluated and reviewed.* Segars and Grover (1999) FREQ2 Strategic plans were frequently adjusted to beer adap tt t them to changing conditions. Segars and Grover (1999) FREQ3 Strategic IS planning was a continuous process. Segars and Grover (1999) FREQ4 Formal planning for information systems was undertaken as the need arose. Segars and Grover (1999) FREQ5 Face-to-face meetings to discuss strategic planning issues were frequently scheduled. Segars and Grover (1999) BP-ISP integration measure AI Administrative integration: In this type of integration, there is a weak relationship between business planning (BP) Teo and King (1997) and information systems planning (ISP). Generally there is little significant eort t ff o use information technology (e.g. computers, telecommunications) to support business plans. SI Sequential integration: In this type of integration, a sequential relationship exists between business planning (BP) Teo and King (1997) and information systems planning (ISP). BP provides direction for ISP. ISP primarily focuses on providing support for business plans. RI Reciprocal integration: In this type of integration, there is a reciprocal and interdependent relationship between Teo and King (1997) business planning (BP) and information systems planning (ISP). ISP plays both a role in supporting and influencing business plans. FI Full integration: In this type of integration, there is little distinction between the business planning (BP) process Teo and King (1997) and the information systems planning (ISP) process. Business and information systems strategies are developed concurrently in the same integrated planning process. PI Proactive: IS objectives precede the formulation of business objectives and are used as input to their development. Reich and Benbasat (2000) IS is considered significant in changing the basis of competition. IT manager participation in business planning ISBP1 IS executives regularly aended business mee tt tings. Kearns and Sabherwal (2006) ISBP2 IS executives participated in setting business goals and strategies. Kearns and Sabherwal (2006) ISBP3 IS executives were involved early in the meetings for major projects. Kearns and Sabherwal (2006) Social dimension of alignment measure Long-term alignment SOC_LT_AL1 Business and IS executives shared a common vision for the long-term role of IS within the organisation. Cohen and Toleman (2006) SOC_LT_AL2 Business and IS executives agreed on priorities for the organisational use of IS. Cohen and Toleman (2006) SOC_LT_AL3 Business and IS executives agreed on the key IS management issues aecting the or ff ganisation. Cohen and Toleman (2006) *, Dropped items. Appendix 1 continues on the next page → http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 11 of 12 Original Research APPENDIX 1 (Continues...): Item measures. Item Variable Source Social dimension of alignment measure† Short-term alignment IS understands business SOC_ST_AL_IS_BUS1 IS executives had a good level of understanding of strategic business plans. Cohen and Toleman (2006) SOC_ST_AL_IS_BUS2 IS executives had a good level of understanding of the work environment of the business. * Cohen and Toleman (2006) Business understands IS SOC_ST_AL_BUS_IS1 Business executives had a good level of understanding of the work environment of the IS function. * Cohen and Toleman (2006) SOC_ST_AL_IS_BUS2 Business executives had a good level of understanding of strategic IS plans. Cohen and Toleman (2006) Intellectual dimension of alignment IS plan-business plan alignment INT_AL1 The IS plan reflected the business plan mission. Kearns and Lederer (2003) INT_AL2 The IS plan reflected the business plan goals. Kearns and Lederer (2003) INT_AL3 The IS plan supported the business strategies. Kearns and Lederer (2003) INT_AL4 The IS plan recognised external business environment factors. Kearns and Lederer (2003) INT_AL5 The IS plan reflected the business plan resource constraints. Kearns and Lederer (2003) Business plan-IS plan alignment INT_AL6 The business plan referred to the IS plan. Kearns and Lederer (2003) INT_AL7 The business plan referred to specific IS applications. * Kearns and Lederer (2003) INT_AL8 The business plan referred to specific information technologies. * Kearns and Lederer (2003) INT_AL9 The business plan utilised the strategic capability of IS. Kearns and Lederer (2003) INT_AL10 The business plan contained reasonable expectations of IS. Kearns and Lederer (2003) *, Dropped items. †, Data continues from previous column. http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 12 of 12 Original Research APPENDIX 2: Cronbach’s alpha and factor analysis. Items ADAPT RATIONAL SDK_BUS ISBP SDK_IS Cronbach’s alpha 0.88 0.91 0.84 0.94 0.91 SDK1 0.43 0.10 0.71 0.19 0.04 SDK2 0.24 −0.11 0.64 0.35 0.02 SDK3 0.11 0.25 0.70 0.27 0.23 SDK4 0.03 −0.05 0.80 0.06 −0.08 SDK5 0.23 0.04 0.17 0.31 0.79 SDK6 0.26 0.10 0.04 0.20 0.79 COMP1 −0.12 0.73 0.44 −0.07 0.16 COMP2 0.26 0.80 0.18 0.09 −0.01 COMP3 0.35 0.68 0.15 0.00 0.20 COMP4 0.03 0.57 0.16 0.32 −0.06 COMP5 −0.01 0.77 −0.06 0.18 −0.04 FORM1 −0.02 0.79 −0.08 0.15 −0.07 FORM3 0.26 0.74 −0.03 0.16 0.23 FORM5 0.38 0.71 0.13 0.17 0.23 PART1 0.62 0.19 0.24 0.43 0.24 PART2 0.72 0.06 0.30 0.17 0.38 PART3 0.82 0.06 0.00 0.12 −0.04 FREQ2 0.51 0.47 0.01 0.26 0.20 FREQ3 0.59 0.38 0.23 0.24 0.11 FREQ4 0.60 0.50 0.04 0.21 0.26 FREQ5 0.59 0.19 0.34 0.06 0.10 ISBP1 0.26 0.22 0.29 0.77 0.15 ISBP2 0.25 0.31 0.16 0.81 0.20 ISBP3 0.19 0.16 0.16 0.81 0.17 Explained variance 4.08 6.02 4.20 4.86 2.75 Proportional total 0.11 0.16 0.11 0.13 0.07 Items INT_ISPBPALIGN INT_BPISPALIGN SOC_STALIGN SOC_LTALIGN Cronbach’s alpha 0.93 0.92 0.76 0.92 SOC_LT_AL1 0.20 0.36 0.45 0.54 SOC_LT_AL2 0.22 0.12 0.39 0.78 SOC_LT_AL3 0.25 −0.02 0.39 0.63 SOC_ST_AL_IS_BUS1 0.38 0.15 0.65 0.21 SOC_ST_AL_BUS_IS2 0.14 0.33 0.72 0.35 INT_AL1 0.80 0.22 0.19 0.28 INT_AL2 0.78 0.27 0.21 0.24 INT_AL3 0.72 0.19 0.36 0.20 INT_AL4 0.80 0.01 0.12 −0.19 INT_AL5 0.85 0.15 0.04 0.14 INT_AL6 0.26 0.58 0.19 0.22 INT_AL9 0.19 0.55 0.36 −0.03 INT_AL10 0.32 0.54 0.32 0.07 Explained Variance 4.36 4.20 4.86 2.42 Proportional total 0.12 0.11 0.13 0.07 http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png SA Journal of Information Management Unpaywall

The impact of shared domain knowledge on strategic information systems planning and alignment

SA Journal of Information ManagementJul 23, 2015

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Page 1 of 12 Original Research The impact of shared domain knowledge on strategic information systems planning and alignment Authors: Background: Lack of alignment or harmony between information technology (IT) and Simla Maharaj business imperatives continues to plague organisations despite decades of research. Strategic Irwin Brown information systems planning (SISP) is the process of coordinating the relationship between IT and the business in order to steer alignment. Shared domain knowledge (SDK) is a factor Affiliations: Department of Information that is posited as important for improving both SISP and alignment, which is theorised to be Systems, University of Cape the main outcome of SISP. Town, South Africa Objectives: The aim of this article is to examine the impact of SDK on SISP and alignment. Correspondence to: Irwin Brown Method: Data were gathered from management consultants in a large, global IT organisation, through the use of a structured questionnaire, and analysed. Email: [email protected] Results: It was shown that SDK positively influences SISP characteristics and the alignment outcome. Specifically, it was found that high levels of rationality in SISP positively influenced Postal address: the intellectual dimension of alignment, whilst IT manager participation in business planning Private Bag, Rondebosch 7701, South Africa influenced the social dimension of alignment. SDK was found to have a bearing on all of the SISP characteristics measured (i.e. rationality, adaptation, business planning-SISP integration Dates: and IT manager participation in business planning). SDK was also found to positively impact Received: 02 Jan. 2014 both the intellectual and social dimensions of alignment. Accepted: 22 Apr. 2015 Published: 23 July 2015 Conclusion: The implications of the findings are that fostering a knowledge sharing How to cite this article: environment in organisations will help improve alignment, as well as the formal processes Maharaj, S. & Brown, I., designed to steer alignment such as SISP. 2015, ‘The impact of shared domain knowledge on strategic information systems planning and alignment’, Introduction South African Journal of Strategic information systems planning (SISP) has been established as a core activity in the Information Management 17(1), Art. #608, 12 pages. governance and management of information technology (IT) in organisations (Bechor et al. 2010; http://dx.doi.org/10.4102/ Hayward 2013). SISP is carried out in organisations primarily as a means to improve the level of sajim.v17i1.608 alignment between IT and business strategies and objectives (Karanja & Patel 2012). Both SISP and business-IT alignment have been consistently ranked as key issues amongst IT managers Copyright: © 2015. The Authors. globally, which highlights the importance of research into these phenomena (Luftman et al. 2013). Licensee: AOSIS SISP can be seen as the process by which alignment is achieved and is variously referred to as OpenJournals. This work is information systems strategic planning (ISSP), information systems (IS) strategy development licensed under the Creative or formation (i.e. formulation and implementation) and IS strategising (Peppard, Galliers & Commons Attribution License. Thorogood 2014). Business-IT alignment has been theorised to be a key outcome of SISP (Lederer & Salmela 1996; Osman, El Beltagi & Hardaker 2013; Yang, Pita & Singh 2014). Business-IT alignment, when viewed as an outcome of SISP, is defined as the state in which IT and business plans and strategies are coherently interrelated, as well as the degree to which there is congruence of vision between business and IT executives on business and IT strategy (Reich & Benbasat 2000; Silvius 2013). Shared domain knowledge (SDK) between business and IT executives is known to enhance efficiency and effectiveness of strategic IT management processes such as SISP (Ranganathan & Sethi 2002). There is evidence too that SDK has a direct impact on business-IT alignment, that is, there is not only an indirect impact through SISP (Preston & Karahanna 2009). The purpose of this research is hence to interrogate the various direct and indirect relationships between SDK, SISP and business-IT alignment in order to gain a better understanding of the dynamics between these important factors (Leonard & Seddon 2012). The research question posed is: What is the impact of shared domain knowledge on strategic information systems planning and its effectiveness, as measured by Read online: Scan this QR alignment? code with your smart phone or mobile device In the next section the key concepts underpinning the study will be elucidated, after which the to read online. research model is established. The methodology by which data were collected and analysed http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 2 of 12 Original Research is then outlined after which the results are presented. cited by Brown 2004; Teubner 2013). This definition for SISP Discussion and implications of the results follow, then the has persisted for over two decades, which demonstrates that article is concluded. SISP is an enduring activity for IT management in a dynamic and rapidly evolving field. Conceptual background Whilst there are a large number of methodologies to choose Shared domain knowledge, strategic information systems from when carrying out SISP, common to most are several planning characteristics and business-IT alignment and their key phases and activities. These methodology-independent interrelationships are the focus of attention in this study, so phases include strategic awareness (preparing for the SISP each will be discussed logically in turn. process), situational analysis (analysing the external and internal business and IS environment), strategy conception (conceiving and evaluating alternative scenarios), strategy Shared domain knowledge (SDK) formulation (selecting a strategy) and implementation SDK is defined as the ability of IT and business executives planning (Mirchandani & Lederer 2014; Newkirk & Lederer to mutually understand the key processes in the domains 2006). of business and IT respectively and to be able to mutually contribute and participate meaningfully in the activities of It has been found that success of SISP varies depending each domain (Chan, Sabherwal & Thatcher 2006). Related on the characteristics of the SISP approach being used in concepts that have received attention in literature include an organisation (Grover & Segars 2005; Osman et al. 2013; shared knowledge and knowledge sharing (Kearns & Silvius & Stoop 2013). Key SISP characteristics include the Lederer 2003; Pai 2005; Preston & Karahanna 2009; Reich & levels of rationality, adaptation and integration with business Benbasat 2000). Shared knowledge is described as ‘an planning (Segars & Grover 1999; Teo & King 1997). SISP understanding and appreciation among IT and line approaches exhibiting high levels of rationality, adaptation managers for the technologies and processes that affect their and integration have been found to be the most successful, mutual performance’ (Reich & Benbasat 2000), whilst Pai especially in the context of a volatile environment (Grovers & (2005) describes knowledge sharing as ‘a set of behaviours Segars 2005). The typical measure of SISP success is the extent that involve the exchange of information or assistance to of business-IT alignment achieved (Sylvius 2013). others’. Implicit in our definition of SDK are the elements of shared knowledge and knowledge sharing; hence, Rationality in SISP is recognised by comprehensiveness in literature related to the latter two concepts has relevance decision-making, a top-down flow of decision-making, a to discussions of SDK too (Preston & Karahanna 2009). focus on control and a high degree of formalisation (Chen A strong environment and culture of knowledge sharing is et al. 2010; Segars & Grover 1999). Adaptation is evidenced argued to be conducive to effective strategising (Teubner by frequent meetings to consider and revise plans and broad 2013). Kearns and Lederer (2003) examined how knowledge participation of stakeholders (Segars & Grover 1999). Business sharing (represented by the transfer of knowledge between planning-IS planning (BP-ISP) integration varies from having CIO and CEO) assists in generating competitive advantage. no integration at one extreme to a fully integrated process at SDK and knowledge sharing have been shown to be key the other extreme. Table 1 provides detailed definitions of considerations in achieving alignment between business and these elements. IT objectives (Chan et al. 2006; Pai 2005; Preston & Karahanna 2009; Reich & Benbasat 2000; Tan & Gallupe 2006). An aspect that is related to BP-ISP integration, but deserves Ranganathan and Sethi (2002) examined the impact of SDK separate consideration in the context of SISP is the level of on rationality in strategic IT decisions and found a strong IT manager participation in business planning (Kearns & and positive influence. Whilst issues such as competitive Lederer 2003). Whilst organisations may have mechanisms advantage, alignment and rationality in decision-making and structures for BP-ISP integration, the level of IT manager are associated with SISP, there have been few studies that participation in business planning may still vary. For explicitly link SDK to SISP; hence, there still remains a research gap on how these phenomena interrelate. The next example, an IT manager may be present at business planning section discusses key characteristics associated with SISP. sessions, but if not fully part of the proceedings, and if their voice is not taken in to account, then participation and involvement of IT managers will still be low (Cordoba 2009). Strategic information systems planning (SISP) and its characteristics Strategic information systems planning (SISP) Improving SISP has persisted as a key issue for IT executives eectiv ff eness – Alignment for several decades now (Luftman et al. 2013); hence, research on this phenomenon remains relevant to pursue. SISP effectiveness has been defined as the extent to which SISP is defined as a strategic endeavour that involves key planning objectives have been fulfilled (Premkumar & identification of a prioritised portfolio of IT applications for King 1994). Key objectives of SISP include alignment an enterprise, together with the necessary infrastructure, between business and IT objectives, analysis of the resources, organisational structure and change management business and IT environment, improved cooperation considerations necessary for implementation (Baker 1995 as between stakeholders to ensure plan implementation and http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 3 of 12 Original Research TABLE 1: Strategic information systems planning process — Characteristics. Characteristic Definition Comprehensiveness The extent to which an organisation aemp tt ts to be exhaustive or inclusive in making and integrating decisions Flow The locus of authority or devolution of responsibilities for strategic planning (top-down, bottom-up, interactive) Focus The balance between creativity and control orientations inherent within the strategic planning system Formalisation The existence of structures, techniques, written procedures and policies that guide the planning process Frequency The frequency of planning activities or cycles and, relatedly, the frequency of evaluation and revision of strategic choices (occasional vs continuous) Participation The breadth of involvement in strategic planning (narrow vs wide) BP-ISP integration The level of integration between business planning and SISP (business-led, IT-led, reciprocal, full integration or proactive) (Reich & Benbasat 2000; Teo & King 1997) IT manager participation in business planning IT manager aendance, participa tt tion and involvement in business planning (Kearns & Sabherwal 2007) Sources: Grover, V. & Segars, A.H., 2005, ‘An empirical evaluation of stages of strategic information systems planning: Paerns tt of process design and eectiv ff eness’ , Information & Management 42, 761–779. http://dx.doi.org/10.1016/j.im.2004.08.002 ; Teo, T. & King, W., 1997, ‘Integration between business planning and information systems planning: An evolutionary contingency perspective’, Journal of Management Information Systems 14(1), 185–214. improvements in organisational capability to carry out SISP H1: BP-ISP integration positively influences the social (Segars & Grover 1999; Yang et al. 2014). From amongst dimension of alignment these objectives, alignment has been persistently noted as H2: BP-ISP integration positively influences the the key objective of SISP (Chen et al. 2010; Karanja & Patel intellectual dimension of alignment 2012; Silvius 2013). SISP rational-adaptation and alignment The concept of alignment is broad and multi-faceted (Chan Grover and Segars (2005) demonstrate that a process & Reich 2007). Alignment can be viewed as a process or characterised by high levels of both rationality and adaptation an outcome (Karpovsky & Galliers 2015). The perspective is associated with successful SISP. Success was measured in adopted in this study is that it is the outcome of SISP. their study by assessing, amongst other elements, alignment. When viewed as an outcome of SISP, key dimensions of The measure of alignment they used included items relating alignment have been identified as the intellectual and to both the intellectual and social dimensions, hence social dimension (Reich & Benbasat 2000). The intellectual supporting the following hypotheses: dimension is defined as the state in which a set of high- quality interrelated business plans and IT plans exist (Reich H3: Rationality in SISP positively influences the social & Benbasat 1996). The social dimension refers to the state dimension of alignment in which IT and business executives understand and are H4: Rationality in SISP positively influences the committed to the business and IT mission, objectives and intellectual dimension of alignment plans (Reich & Benbasat 2000). Reich and Benbasat (2000) H5: Adaptation in SISP positively influences the social further distinguish between short-term social alignment – dimension of alignment the degree of mutual understanding between business H6: Adaptation in SISP positively influences the and IT executives of business and IT objectives – and long- intellectual dimension of alignment term alignment – the congruence of shared vision between business and IT executives. Few studies have considered IT manager participation in business planning both the intellectual and social dimensions in one study, due and alignment to a lack of conceptual clarity around these dimensions and IT manager participation in business planning has been their measurement (Chan & Reich 2007; Schlosser, Wagner shown to lead to positive outcomes such as achieving & Coltman 2012). alignment (Chi et al. 2005; Kearns & Lederer 2003; Kearns & Sabherwal 2007). There needs to be caution against paying lip service to the concept of participation (Cordoba 2009), Hypothesis development for example inviting the IT manager to be part of business Drawing from the literature on SDK, SISP and alignment, a planning activities, but not taking on board their suggestions set of hypotheses to be tested were derived. These will be and input: discussed in turn. H7: IT manager participation in business planning BP-ISP integration and alignment positively influences the social dimension of alignment H8: IT manager participation in business planning Reich and Benbasat (2000) demonstrated a positive positively influences the intellectual dimension of relationship between BP-ISP integration and the social alignment dimension of alignment. BP-ISP integration is also expected to have an impact on the intellectual dimension of alignment. Shared domain knowledge and SISP For example Brown (2004) suggests that greater BP-ISP characteristics integration yields a more useful and comprehensive IS plan, signalling high levels of intellectual alignment. Hence the The benefits of SDK for IT strategic management have been following hypotheses are supported: well reported. Ranganathan and Sethi (2002) demonstrate http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 4 of 12 Original Research its positive impact on rationality in strategic IT decision- making. Rationality was operationalised by dimensions of Shared Domain Knowledge (SDK) comprehensiveness and formalisation, attributes noticeable in a rational SISP process (Segars & Grover 1999). SDK has been associated with IT manager participation in business planning H11 BP-ISP Integration H14 H13 H1 and business manager participation in SISP (Kearns & H2 Sabherwal 2007; Reich & Benbasat 2000); a characteristic of H3 Social Dimension SISP adaptation is business participation in SISP (Grover H9 SISP Rationality of Alignment H4 & Segars 2005). SDK has also been associated with BP-ISP H5 integration (Kearns & Sabherwal 2007; Reich & Benbasat Intellectual 2000). Hence, the following hypotheses are supported: H6 H10 SISP Adaptation Dimension H7 of Alignment H9: Shared domain knowledge positively influences H8 IT Participation rationality in SISP H12 in H10: Shared domain knowledge positively influences Business Planning adaptation in SISP FIGURE 1: Conceptual model. H11: Shared domain knowledge positively influences BP-ISP integration SDK was measured using the Ranganathan and Sethi (2002) H12: Shared domain knowledge positively influences IT instrument supplemented by measures from Kearns and manager participation in business planning Sabherwal (2007). SISP rationality was operationalised in this study by the dimensions of comprehensiveness and Shared domain knowledge and alignment formalisation as in Ranganathan and Sethi (2002). The A lack of shared knowledge between business and IT is measurement scales for comprehensiveness and formalisation argued to be one of the key challenges to achieving alignment were adapted from instruments developed by Segars and (Chan & Reich 2007). Chan et al. (2006) demonstrate the effect Grover (1999). For the higher order characteristic of SISP of SDK on the intellectual dimension of alignment, whilst adaptation, dimensions of participation and frequency were Reich and Benbasat (2000) and Preston and Karahanna (2009) used, again using measures developed by Segars and Grover demonstrate this impact on the social dimension of alignment (1999). IT manager participation in business planning was in the long term and short term respectively. Hypotheses measured with the instrument developed by Kearns and supported are: Sabherwal (2007). H13: Shared domain knowledge positively influences the For BP-ISP integration the measure by Teo and King (1997) social dimension of alignment was used, which provided a typology of integration varying H14: Shared domain knowledge positively influences the from administrative (little or no integration) to sequential intellectual dimension of alignment (SISP follows business planning) to reciprocal (SISP and business planning are mutually interacting) to full integration The conceptual model illustrating these 14 hypotheses is (no separate SISP and business planning). Reich and Benbasat illustrated in Figure 1. (2000) also identified proactive integration (SISP precedes business planning) as a type of integration, so this mode was also added to the measure. Respondents were asked to select Research methodology which description most closely fitted the BP-ISP integration The research methodology followed a positivist, quantitative, level in the organisation they were involved with. hypothetico-deductive approach. Further details on the research instrument, the data collection process and the data The research questions used for measuring the social analysis procedure are provided in this section. dimension of alignment construct were adapted from an instrument from a study by Cohen and Toleman (2006). Development of the measures for research This instrument included both short-term and long- constructs term alignment measures. For measuring the intellectual dimension of alignment measures were adapted from an The measures used in this study were based on validated instruments from relevant studies (Cohen & Toleman instrument by Kearns and Lederer (2003). 2006; Kearns & Lederer 2003; Kearns & Sabherwal 2007; Ranganathan & Sethi 2002; Reich & Benbasat 2000; Segars Data collection & Grover 1999; Teo & King 1997). These measures and their Sampling sources are illustrated in Appendix 1. A seven-point Likert scale ranging from 1 for ‘strongly disagree’ to 7 for ‘strongly The target population for this study consisted of consultants agree’ was employed in the questionnaire for all items except from a large, global IT organisation who were based at BP-ISP integration, which employed a typology of integration companies that had conducted SISP in the last 10 years. These modes as per Teo and King (1997). consultants had participated in SISP at the specific company http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 5 of 12 Original Research in which they were based. Most studies in SISP rely on the Frequency tables based on the demographic data in the views of the IT executive to represent the organisation, whilst a responses were developed. The next part of the data few also include the business executive. The views of external analysis was the execution of a factor analysis exercise consultants are not often represented in SISP research. The to validate the items and to identify if there were any advantage of obtaining a consultant perspective is that it may structures in the relationships between items. The offer a perhaps less biased view of SISP in organisations than Cronbach’s alpha coefficient for the final set of research that of IT or business executives. Random sampling was used items was thereafter applied to test reliability. Finally the so that each population member had an equal chance of being hypotheses developed in this study were tested using selected. Three-hundred consultants from the large global IT multiple linear regression. organisation were asked to respond to the questionnaire. Data analysis and results Pilot testing Demographic profile The questionnaire was first pre-tested by three academics The demographic profile of the respondents is illustrated with experience in this area of research. Wording of questions in the tables below. Table 2 reveals that 72% of the sample (such as tenses) was amended as a result. A pilot test was had senior executive experience and 74% had more than thereafter conducted with five IT consultants, three of whom 10 years of IS experience. Approximately 90% of the were from the large, global IT organisation with two others respondents had up to 15 years of SISP experience with from other organisations. Based on the feedback, some about 9% of the respondents having more than 15 years of questions were reworded and some questions were removed SISP experience. as the respondents felt that they were repetitive. Generally, the questionnaire was well understood with positive Diverse industries were represented in the sample. feedback, for example that the instructions were clear and the Manufacturing and finance had the most responses – length of the questionnaire was adequate. The changes that about 32% and 31% of the sample respectively (Table 3). were suggested in the feedback were made accordingly and The transport, engineering, service, government, retail, the final questionnaire was posted on a website to be used for communications and IT industries had less than 10% data collection. responses each, but together they accounted for about 35% of the responses. Other descriptive data revealed that most organisations were large in terms of annual revenue. About Data collection procedure The online questionnaire was hosted on a general survey TABLE 2: Level of experience of respondents. website and all consultants in the sample were sent an email Item f % which included the link to the questionnaire. Confidentiality Level of management experience of responses was assured and respondents were asked to Junior 5 8.6 provide their contact details in the survey if they wished to Middle 10 17.2 receive a copy of the findings of this study. Email reminders Senior 42 72.4 were sent every two weeks for one month to ensure Number of years of IS experience <5 7 12.1 that the maximum number of consultants answered the 5–10 7 12.1 questionnaire. The responses to the questionnaire were saved 10–15 17 29.3 to the website’s database and downloads of the responses 15–20 15 25.9 were available at all times. >20 11 19.0 Number of years of SISP experience Response rate <5 20 34.5 5–10 25 43.1 Three-hundred consultants from one large, global IT 10–15 7 12.1 organisation were targeted for this survey and on closure of 15–20 4 6.9 the online survey, a total of 175 consultants had responded >20 1 1.7 to the survey. On analysis of the responses, it was found that 59 questionnaires were answered completely, representing TABLE 3: Industry in which SISP was conducted. a 19.7% response rate. Although low, this was deemed an Industry f % acceptable response rate for this type of survey, as it is widely Manufacturing 19 32.8 acknowledged that surveys targeting senior level managers Communications 5 8.6 and professionals suffer from low response rates. Other SISP Finance 18 31.0 survey-based studies have had similar response rates (e.g. Retail 1 1.7 Cohen 2008; Mirchandani & Lederer 2014). IT 3 5.2 Government 4 6.9 Transport 3 5.2 Data analysis procedure Engineering 1 1.7 The first part of the data analysis process was to conduct Service 3 5.2 basic descriptive statistics on the questionnaire responses. f, frequency http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 6 of 12 Original Research TABLE 4: Descriptive statistics. 38% had revenues in excess of USD 500 million and only 9% Item M SD had revenues of less than USD 5 million. Shared domain knowledge (SDK) 4.9 0.97 SISP rationality (RATIONAL) 4.4 1.13 Construct and discriminant validity SISP adaptation (ADAPT) 4.9 1.19 IT manager participation business planning (ISBP) 4.3 1.53 The questionnaire was derived from previously validated Social dimension of alignment 4.5 1.23 instruments, so confirmatory factor analysis (CFA) was Intellectual dimension of alignment 4.5 1.23 used to assess construct and discriminant validity (Tan & M, mean; SD, standard deviation Teo 2000). Commonly applied decision rules were used, including using a minimum eigenvalue of 1 as a cut-off value each other’s unique contribution and challenges. The mean for extraction, deleting items with factor loadings of less scores for SISP rationality (RATIONAL) and IT manager than 0.5 on all factors, or greater than 0.5 on two or more participation in business planning (ISBP) were about 4, factors, using varimax rotation and so on (Tan & Teo 2000). implying respondents were on average neutral with respect Through progressive refinement, a set of validated constructs to the extent to which their organisations exhibited a high emerged. degree of rationality and participation in business planning. SISP adaptation (ADAPT), social alignment and intellectual Appendix 2 shows the factor loadings achieved after alignment had means that were closer to 5. This reveals that elimination of items. SDK loaded on two factors – one related respondents on average agreed that there was a high degree to business knowledge of IS (SDK_BUS) and the other related of SISP adaptation. They also agreed on average that there to IS knowledge of business (SDK_IS). Together these two was a state within the respective companies where business sub-factors made up SDK. Also loading as distinct factors and IT executives understood and were committed to the were SISP rationality (RATIONAL) and SISP adaptation business and IT mission, objectives and plans, and they (ADAPT). It was expected that rationality would have two agreed on average that there was a close linkage between the sub-factors – comprehensiveness and formalisation – but IS strategy and business strategy. these two loaded together as a single factor of rationality (RATIONAL), which was nevertheless consistent with their BP-ISP integration types common underlying meaning. Adaptation too was expected to have two factors – participation and frequency – but once In terms of BP-ISP integration, just over 48% of organisations again it loaded as a single factor (ADAPT), which was again exhibited sequential integration, which means that a consistent with the commonality in meaning. IT manager sequential relationship existed between business planning participation in business planning (ISBP) loaded as a separate and SISP, with IS plans primarily focused on providing factor, as expected. support for business plans. About 19% of the companies exhibited administrative integration, which represents a Amongst the alignment factors two major dimensions weak relationship between business planning and SISP. were expected – the social dimension of alignment and About 16% of the companies exhibited reciprocal integration, representing a reciprocal and interdependent relationship intellectual dimension of alignment. The social dimension between business planning and SISP, in which SISP plays had two separate sub-factors – long-term alignment (SOC_ a role in both supporting and influencing business plans. LT ALIGN) and short-term alignment (SOC_STALIGN). The About 12% of the sample claimed there was full BP-ISP intellectual dimension of alignment also had two sub-factors – integration with little distinction between business planning IS plan-business plan alignment (INT_ISPBPALIGN) and processes and SISP processes. Only 5% of the sample showed business plan-IS plan alignment (INT_BPISPALIGN). The proactive BP-ISP integration in which IS objectives precede refined constructs thus exhibited adequate construct and the formulation of business objectives and are used as input discriminant validity. to their development. Hence, all BP-ISP integration types were present, demonstrating the diversity of the sample. Instrument reliability In order to assess reliability of the refined instrument, the Multiple linear regression Cronbach’s alpha was calculated for each construct (Tan & Multiple linear regression was used to test the 14 hypotheses Teo 2000). Reliability is indicated if the Cronbach’s alpha is formulated in this study. The dependent variables against greater than 0.7. The lowest Cronbach’s alpha was 0.76, thus which the independent variables were regressed were demonstrating that all measures exhibited reliability (see the social dimension of alignment, intellectual dimension Appendix 2). of alignment and the SISP characteristics (rationality, adaptation, BP-ISP integration and IT manager participation Items means and standard deviations in business planning). The common dependent variable Table 4 shows that the mean for SDK is close to 5, which was SDK. The results of the multiple linear regression reveals that respondents on average agreed that IT and are illustrated in Table 5 together with the associated business executives had the ability to understand and were hypotheses. p-values that were less than or equal to 0.05 were considered significant. able to participate in the others’ key processes and to respect http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 7 of 12 Original Research TABLE 5: Results of multiple linear regression. Dependent item Hypothesis Independent item Beta p-level Social dimension of alignment H1 BP-ISP integration −0.04 0.624 H3 Rationality 0.15 0.124 H5 Adaptation 0.07 0.550 H7 IT manager participation in business planning 0.55 0.000 H13 SDK 0.25 0.022 Intellectual dimension of alignment H2 BP-ISP integration 0.05 0.620 H4 Rationality 0.26 0.026 H6 Adaptation 0.05 0.726 H7 IT manager participation in business planning 0.21 0.091 SISP characteristics H14 SDK 0.38 0.006 Rationality H9 SDK 0.41 0.001 Adaptation H10 SDK 0.68 0.000 BP-ISP integration H11 SDK 0.52 0.000 IT manager participation in business planning H12 SDK 0.65 0.000 knowledge of IS and IS knowledge of business), intellectual Business dimension of alignment (IS plan-business plan alignment and IS Knowledge of Knowledge Business business plan-IS plan alignment) and the social dimension of of IS alignment (long-term and short-term alignment). Shared Domain Knowledge Discussion and implications (SDK) IS Plan – SISP characteristics and alignment Business Plan H9 H14 The social and intellectual dimensions of alignment respec- Intellectual Alignment SISP Rationality Dimension tively were used as a measure of SISP effectiveness. The H4 of Alignment Business Plan – impact of the SISP characteristics of rationality, adaptation, H12 H13 IS Plan BP-ISP integration and IT manager participation in business Alignment planning were tested. It was found that there was support only for IT manager participation in business planning positively influencing the social dimension of alignment. The Long-Term positive influence arises because IT manager participation in Alignment IT Participation Social business planning involves IT executives regularly attending H7 in Business Dimension of business meetings, participating in setting business goals and Planning Alignment Short-Term objectives and being involved early in the meetings for major Alignment projects. All of these actions ultimately contribute to the social dimension of alignment: the shared vision of business FIGURE 2: Refined conceptual model. and IS executives on the role of IS in the organisation and the mutual understanding of each other’s domains. This finding It was noticeable that all hypotheses concerning the impact is in keeping with the results of Kearns and Sabherwal (2006). of SDK (H9 to H14) were supported, meaning that SDK had The lack of influence of rationality, BP-ISP integration and an impact on all SISP characteristics (rationality, adaptation, adaptation would suggest that formalised SISP procedures, BP-ISP integration and IT manager participation in business structural mechanisms for BP-ISP integration, business planning), as well SISP effectiveness (social dimension of executive participation in SISP sessions and frequent SISP alignment and intellectual dimension of alignment). In terms meetings are less useful for achieving social alignment. of the influence of SISP characteristics on alignment, the Business executives would likely not have time to attend too social dimension of alignment was impacted by IT manager many SISP sessions, so a better strategy is for the IT manager participation in business planning only (H7) and not by to go to the business planning meetings and there make rationality, adaptation or BP-ISP integration. The intellectual contributions for the strategic use of IT in organisations. dimension of alignment was impacted by rationality only (H4) and not adaptation, BP-ISP integration or IT manager In terms of the influence of the aforementioned SISP participation in business planning. characteristics on the intellectual dimension of alignment, there was only support for SISP rationality positively influencing The results in Table 5 lead to the refined conceptual model, as intellectual alignment. So, a high level of comprehensiveness, shown in Figure 2. SISP adaptation and BP-ISP integration were formalised procedures and documentation of outputs in SISP only weakly associated with the alignment dimensions and so ensures that the documented IS plan reflects the business were removed from the model. The factor analysis revealed a mission and goals and supports the business strategies. In a two-factor structure for shared domain knowledge (business like manner, it ensures that the business plan can refer to the http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 8 of 12 Original Research IS plan and that it utilises the strategic capability of IS and Summary contains reasonable expectations of IS. The lack of influence of In summary, the findings suggest that organisations should adaptation, BP-ISP integration and IT manager participation focus on creating a knowledge sharing environment in business planning perhaps indicates that for achieving between business and IT and seek for ways to strengthen IS alignment on the intellectual level, the best strategy is a highly knowledge of business and business knowledge of IS. In this rational SISP process that follows a formal methodology and way SISP characteristics and outcomes such as alignment procedure and yields a comprehensive well-documented IS will be improved. plan, with links and references to business plans and strategies. In all, these findings yield interesting insights into the Limitations and future research role of SISP in achieving alignment and how the different The target population of this study consisted of consultants characteristics affect alignment. Segars and Grover (1999) show from one large, global IT organisation, based at various through cluster analysis that a SISP process characterised by customer sites around the world, who participated or observed rationality and adaptation is associated with SISP effectiveness the SISP in the company where they were based. Even though (alignment, analysis, cooperation and capability improvement the responses were based on various types of organisation from respectively). Their study never tests the relationships between various industries, including responses from consultants only the separate SISP characteristics and the separate dimensions could be a limitation of this study. Bias could result from these of SISP effectiveness. This study makes a contribution by consultants possibly having a deeper knowledge of IS, which empirically testing the relationships between specific SISP could have resulted in them responding to the questionnaire characteristics and alignment and reveals that the rationality from an IS perspective. A suggestion for further research dimension of SISP is important for intellectual alignment, whilst could be to test the research model that was developed in this for social alignment, the IT manager participation in business study by including various roles from business and IT in the planning might be more important than a formal SISP process. target population. A further limitation is the small number of completed questionnaires on which the conclusions of this study were based. Even though there were 175 responses, only SDK and SISP characteristics 59 of the 175 were complete. Future research could try to elicit The SISP characteristics of rationality, adaptation, BP-ISP a higher response rate in order to test if all the hypotheses in integration and IT manager participation in business planning this study still hold true with more response data. have been shown to be important, not only to alignment, but also to other measures of SISP effectiveness such as Conclusion analysis, cooperation, capability improvement, IS function performance, IS contribution to business performance and The objective of this study was to investigate the impact of improved business performance itself (Kearns & Sabherwal SDK on SISP and its effectiveness, as measured by alignment. 2007; Premkumar & King 1994; Segars & Grover 1999). Hence, The research model included the examination of how SDK it is important that ways of enhancing these characteristics impacted the SISP process dimensions (rationality, adaptation, are found. SDK was found to positively influence all of the BP-ISP integration and IT manager participation in business aforementioned characteristics. Hence, improving SDK (i.e. IS planning), how the SISP process dimensions (rationality, knowledge of business and business knowledge of IS) provides adaptation, BP-ISP integration and IT manager participation for an important strategy for improving SISP in organisations. in business planning) impacted SISP effectiveness (measured by social and intellectual alignment) and lastly how SDK impacted SISP effectiveness (i.e. alignment). Few, if any, SDK and SISP eectiv ff eness – Alignment studies have investigated all these facets in a single study. With the overall SISP effectiveness being measured by the social dimension of alignment and the intellectual dimension On a methodological level, the study has contributed by of alignment, SDK was tested against both and it was found demonstrating the validity and reliability of measures for that there was support for SDK positively influencing both investigating SISP characteristics, alignment and SDK, these the social and intellectual dimensions of alignment. The being taken from disparate sources. The study reveals a findings suggest that achieving social alignment may not two-factor structure for SDK (business knowledge of IS require a detailed formalised SISP process. Rather, through and IS knowledge of business), the intellectual dimension improving SDK in an organisation, a shared vision and of alignment (IS plan-business plan alignment and vice shared understanding between business and IS executives versa) and the social dimension of alignment (long-term can be achieved. Coupled with IT manager participation in and short-term alignment respectively), in keeping with the business planning, which itself is strengthened by SDK, the conceptualisation of these constructs. social dimension of alignment can be strongly realised. The study makes a theoretical contribution by revealing the For achieving intellectual alignment a rational SISP process is impact of SISP on two dimensions of alignment – the social and still needed, but even in this case, SDK will be of complementary intellectual respectively. In so doing it is shown that a formal, value both to improving levels of rationality and directly to comprehensive rational SISP process is the key driver of the improving the intellectual dimension of alignment. intellectual dimension of alignment, whilst the social dimension http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 9 of 12 Original Research Karanja, E. & Patel, S.C., 2012, ‘A review of research trends in strategic information of alignment is more likely achievable by the IT manager systems planning’, International Journal of Business Information Systems 10(2), participating in business planning rather than vice versa (i.e. 151–177. http://dx.doi.org/10.1504/IJBIS.2012.047145 business executives participating in SISP). Shared domain Karpovsky, A. & Galliers, R.D., 2015, ‘Aligning in practice: From current cases to a new agenda’, Journal of Information Technology 30, 136–160. http://dx.doi. knowledge between business and IT executives positively org/10.1057/jit.2014.34 influences both SISP and the dimensions of alignment. Kearns, G.S. & Lederer, A.L., 2003, ‘A resource-based view of IT strategic alignment: How knowledge sharing creates competitive advantage’, Decision Sciences 34(1), 1–29. http://dx.doi.org/10.1111/1540-5915.02289 These findings are of practical benefit, as three actions for Kearns, G.S. & Sabherwal, R., 2006, ‘Strategic alignment between business and information technology: A knowledge-based view of behaviours, outcomes, and organisations to implement can be garnered, these being: (1) consequences’, Journal of Management Information Systems 23(3), 129–162. http://dx.doi.org/10.2753/MIS0742-1222230306 improve rationality of SISP processes as a means to improving Kearns, G.S. & Sabherwal, R., 2007, ‘Antecedents and consequences of information the intellectual dimension of alignment; (2) involve IT systems planning integration’, IEEE Transactions on Engineering Management managers strategically in business planning to improve the 54(4), 628–643. http://dx.doi.org/10.1109/TEM.2007.906848 Lederer, A.L. & Salmela, H., 1996, ‘Toward a theory of strategic information systems social dimension of alignment; (3) establish a knowledge planning’, Journal of Strategic Information Systems 5(3), 237–253. http://dx.doi. sharing culture and implement mechanisms to build shared org/10.1016/S0963-8687(96)80005-9 domain knowledge in the organisation. Implementing these Leonard, J. & Seddon, P., 2012, ‘A meta-model of alignment’, Communications of the Association for Information Systems 31(11), 230–259. initiatives will improve both SISP and the aforementioned Luftman, J., Zadeh, H.S., Derksen, B., Santana, M., Rigoni, E.H. & Huang, Z.D., facets of alignment. 2013, ‘Key information technology and management issues 2012–2013: An international study’, Journal of Information Technology 28(4), 354–366. http:// dx.doi.org/10.1057/jit.2013.22 Mirchandani, D.A. & Lederer, A.L., 2014, ‘Autonomy and procedural justice in strategic Acknowledgements systems planning’, Information Systems Journal 24(1), 29–59. http://dx.doi. org/10.1111/j.1365-2575.2012.00419.x Competing interests Newkirk, H.E. & Lederer, A.L., 2006, ‘The eectiv ff eness of strategic information systems planning under environmental uncertainty’, Information & Management The authors declare that they have no financial or personal 43(4), 481–501. http://dx.doi.org/10.1016/j.im.2005.12.001 relationships that may have inappropriately influenced them Osman, E., El Beltagi, I.M. & Hardaker, G., 2013, ‘The impact of leadership orientation in writing this article. on strategic information systems planning processes, with an application to Libyan organizations’, Information Technology for Development November, 1–27. http:// dx.doi.org/10.1080/02681102.2013.856283 Pai, J.-C., 2005, ‘An empirical study of the relationship between knowledge sharing Authors’ contributions and IS/IT strategic planning (ISSP)’, Management Decision 44(1), 105–122. http:// dx.doi.org/10.1108/00251740610641490 S.M. (University of Cape Town) conducted the overall study Peppard, J., Galliers, R.D. & Thorogood, A., 2014, ‘Information systems strategy as whilst registered as a student at the University of Cape practice: Micro strategy and strategizing for IS’, Journal of Strategic Information Systems 23(1), 1–10. http://dx.doi.org/10.1016/j.jsis.2014.01.002 Town. I.B. 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Engineering 5(4), 243–257. http://dx.doi.org/10.1007/s12599-013-0279-z 08.002 Yang, J., Pita, Z. & Singh, M., 2014, ‘Measurement of determinants for enhancing Hayward, J., 2013, ‘Vision and strategic information systems planning in the UK HE strategic information systems planning (SISP) success and dynamic capabilities Sector’, Proceedings of the UK Academy for Information Systems Conference 2013, in South Korea’, Proceedings of the 25th Australasian Conference on Information Paper 13, viewed from http://aisel.aisnet.org/ukais2013/13 Systems, 8–10 December, Auckland, New Zealand. Appendix starts on the next page → http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 10 of 12 Original Research Appendix APPENDIX 1: Item measures. Item Variable Source Shared domain knowledge measure Business knowledge SDK1 Business executives recognised the potential of IS as a competitive weapon. Ranganathan and Sethi (2002) SDK2 Business executives recognised IS as a tool to increase productivity. Ranganathan and Sethi (2002) SDK3 Business executives were highly knowledgeable about the firm’s information technology assets and opportunities. Kearns and Sabherwa (2007) SDK4 Business executives agreed that information technology could have important intangible benefits that should be Kearns and Sabherwal (2007) funded. IS knowledge SDK5 IS executives were highly knowledgeable about business operations of the firm. Ranganathan and Sethi (2002) SDK6 IS executives were highly knowledgeable about business strategies of the firm. Ranganathan and Sethi (2002) SISP rationality measure Comprehensiveness COMP1 The company aemp tt ted to be exhaustive in gathering information relevant for SISP. Segars and Grover (1999) COMP2 Before a decision was made, each possible course of action was thoroughly evaluated. Segars and Grover (1999) COMP3 The company aemp tt ted to determine optimal courses of action from identified alternatives. Segars and Grover (1999) COMP4 There was little trial-and-error in the SISP process. Segars and Grover (1999) COMP5 Decisions were delayed until they were sure that all alternatives were evaluated. Segars and Grover (1999) Formalisation FORM1 Policies and procedures greatly influenced the process of SISP within the firm. Segars and Grover (1999) FORM2 Formalised planning techniques in the SISP process were utilised. * Segars and Grover (1999) FORM3 The process for strategic planning was very structured. Segars and Grover (1999) FORM4 Written guidelines to structure strategic IS planning existed in the organisation. * Segars and Grover (1999) FORM5 The process and outputs of strategic IS planning were formally documented. Segars and Grover (1999) SISP adaptation measure Participation PART1 Business executives were actively involved in strategic IS planning. Segars and Grover (1999) PART2 A variety of functional area managers participated in the process of IS planning. Segars and Grover (1999) PART3 The process for strategic IS planning included numerous participants. Segars and Grover (1999) PART4 Strategic IS planning was a relatively isolated organisational activity (R). * Segars and Grover (1999) PART5 The level of participation in SISP by diverse interests of the organisation was high. * Segars and Grover (1999) Frequency FREQ1 Conformance to strategic plans were constantly evaluated and reviewed.* Segars and Grover (1999) FREQ2 Strategic plans were frequently adjusted to beer adap tt t them to changing conditions. Segars and Grover (1999) FREQ3 Strategic IS planning was a continuous process. Segars and Grover (1999) FREQ4 Formal planning for information systems was undertaken as the need arose. Segars and Grover (1999) FREQ5 Face-to-face meetings to discuss strategic planning issues were frequently scheduled. Segars and Grover (1999) BP-ISP integration measure AI Administrative integration: In this type of integration, there is a weak relationship between business planning (BP) Teo and King (1997) and information systems planning (ISP). Generally there is little significant eort t ff o use information technology (e.g. computers, telecommunications) to support business plans. SI Sequential integration: In this type of integration, a sequential relationship exists between business planning (BP) Teo and King (1997) and information systems planning (ISP). BP provides direction for ISP. ISP primarily focuses on providing support for business plans. RI Reciprocal integration: In this type of integration, there is a reciprocal and interdependent relationship between Teo and King (1997) business planning (BP) and information systems planning (ISP). ISP plays both a role in supporting and influencing business plans. FI Full integration: In this type of integration, there is little distinction between the business planning (BP) process Teo and King (1997) and the information systems planning (ISP) process. Business and information systems strategies are developed concurrently in the same integrated planning process. PI Proactive: IS objectives precede the formulation of business objectives and are used as input to their development. Reich and Benbasat (2000) IS is considered significant in changing the basis of competition. IT manager participation in business planning ISBP1 IS executives regularly aended business mee tt tings. Kearns and Sabherwal (2006) ISBP2 IS executives participated in setting business goals and strategies. Kearns and Sabherwal (2006) ISBP3 IS executives were involved early in the meetings for major projects. Kearns and Sabherwal (2006) Social dimension of alignment measure Long-term alignment SOC_LT_AL1 Business and IS executives shared a common vision for the long-term role of IS within the organisation. Cohen and Toleman (2006) SOC_LT_AL2 Business and IS executives agreed on priorities for the organisational use of IS. Cohen and Toleman (2006) SOC_LT_AL3 Business and IS executives agreed on the key IS management issues aecting the or ff ganisation. Cohen and Toleman (2006) *, Dropped items. Appendix 1 continues on the next page → http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 11 of 12 Original Research APPENDIX 1 (Continues...): Item measures. Item Variable Source Social dimension of alignment measure† Short-term alignment IS understands business SOC_ST_AL_IS_BUS1 IS executives had a good level of understanding of strategic business plans. Cohen and Toleman (2006) SOC_ST_AL_IS_BUS2 IS executives had a good level of understanding of the work environment of the business. * Cohen and Toleman (2006) Business understands IS SOC_ST_AL_BUS_IS1 Business executives had a good level of understanding of the work environment of the IS function. * Cohen and Toleman (2006) SOC_ST_AL_IS_BUS2 Business executives had a good level of understanding of strategic IS plans. Cohen and Toleman (2006) Intellectual dimension of alignment IS plan-business plan alignment INT_AL1 The IS plan reflected the business plan mission. Kearns and Lederer (2003) INT_AL2 The IS plan reflected the business plan goals. Kearns and Lederer (2003) INT_AL3 The IS plan supported the business strategies. Kearns and Lederer (2003) INT_AL4 The IS plan recognised external business environment factors. Kearns and Lederer (2003) INT_AL5 The IS plan reflected the business plan resource constraints. Kearns and Lederer (2003) Business plan-IS plan alignment INT_AL6 The business plan referred to the IS plan. Kearns and Lederer (2003) INT_AL7 The business plan referred to specific IS applications. * Kearns and Lederer (2003) INT_AL8 The business plan referred to specific information technologies. * Kearns and Lederer (2003) INT_AL9 The business plan utilised the strategic capability of IS. Kearns and Lederer (2003) INT_AL10 The business plan contained reasonable expectations of IS. Kearns and Lederer (2003) *, Dropped items. †, Data continues from previous column. http://www.sajim.co.za doi:10.4102/sajim.v17i1.608 Page 12 of 12 Original Research APPENDIX 2: Cronbach’s alpha and factor analysis. Items ADAPT RATIONAL SDK_BUS ISBP SDK_IS Cronbach’s alpha 0.88 0.91 0.84 0.94 0.91 SDK1 0.43 0.10 0.71 0.19 0.04 SDK2 0.24 −0.11 0.64 0.35 0.02 SDK3 0.11 0.25 0.70 0.27 0.23 SDK4 0.03 −0.05 0.80 0.06 −0.08 SDK5 0.23 0.04 0.17 0.31 0.79 SDK6 0.26 0.10 0.04 0.20 0.79 COMP1 −0.12 0.73 0.44 −0.07 0.16 COMP2 0.26 0.80 0.18 0.09 −0.01 COMP3 0.35 0.68 0.15 0.00 0.20 COMP4 0.03 0.57 0.16 0.32 −0.06 COMP5 −0.01 0.77 −0.06 0.18 −0.04 FORM1 −0.02 0.79 −0.08 0.15 −0.07 FORM3 0.26 0.74 −0.03 0.16 0.23 FORM5 0.38 0.71 0.13 0.17 0.23 PART1 0.62 0.19 0.24 0.43 0.24 PART2 0.72 0.06 0.30 0.17 0.38 PART3 0.82 0.06 0.00 0.12 −0.04 FREQ2 0.51 0.47 0.01 0.26 0.20 FREQ3 0.59 0.38 0.23 0.24 0.11 FREQ4 0.60 0.50 0.04 0.21 0.26 FREQ5 0.59 0.19 0.34 0.06 0.10 ISBP1 0.26 0.22 0.29 0.77 0.15 ISBP2 0.25 0.31 0.16 0.81 0.20 ISBP3 0.19 0.16 0.16 0.81 0.17 Explained variance 4.08 6.02 4.20 4.86 2.75 Proportional total 0.11 0.16 0.11 0.13 0.07 Items INT_ISPBPALIGN INT_BPISPALIGN SOC_STALIGN SOC_LTALIGN Cronbach’s alpha 0.93 0.92 0.76 0.92 SOC_LT_AL1 0.20 0.36 0.45 0.54 SOC_LT_AL2 0.22 0.12 0.39 0.78 SOC_LT_AL3 0.25 −0.02 0.39 0.63 SOC_ST_AL_IS_BUS1 0.38 0.15 0.65 0.21 SOC_ST_AL_BUS_IS2 0.14 0.33 0.72 0.35 INT_AL1 0.80 0.22 0.19 0.28 INT_AL2 0.78 0.27 0.21 0.24 INT_AL3 0.72 0.19 0.36 0.20 INT_AL4 0.80 0.01 0.12 −0.19 INT_AL5 0.85 0.15 0.04 0.14 INT_AL6 0.26 0.58 0.19 0.22 INT_AL9 0.19 0.55 0.36 −0.03 INT_AL10 0.32 0.54 0.32 0.07 Explained Variance 4.36 4.20 4.86 2.42 Proportional total 0.12 0.11 0.13 0.07 http://www.sajim.co.za doi:10.4102/sajim.v17i1.608

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SA Journal of Information ManagementUnpaywall

Published: Jul 23, 2015

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