Definition of Terms

Alignment is the degree to which a state of harmony is achieved between the

business and IT functional constituents (finance, marketing, sales, etc.) within the
organization (Luftman, 2003).
Alignment is when the business objectives are enabled, supported, and stimulated
by IT strategies (Luftman, Lewis & Oldach, 1993).
Alignment ensures IT resources, operations, and performance metrics are in
harmony with the strategic objectives of the company and its assorted business units
(Hammet, 2008). The alignment between business and IT strategies is necessary for
planners to make the appropriate investments and decisions regarding IT, as the enabler for
implementation of the business strategy (Sage, 2006).
Competitive advantage is the lead that organizations achieve over their competitors
by offering products or services that have a lower costs or some benefit that justifies an
additional cost (Sage, 2006).
Enterprise Architecture (EA) is defined as the activities of organizaing logic for
business processes and IT infrastructure reflecting the integration and standardization
requirements of the organizations operating model (Ross, Weil, & Robertson, 2006). EA
represents a set of objectives, activities, products or architecture components, models,
plans, tools, processes, metrics, principles, policies and governance to enable the different
factors that constitute elements for the strategic alignment of business and IT.
Strategic alignment is when an organization applies IT in a strategic and timely
manner that is also linked in harmony with business strategies, goals, and needs (Luftman,
Papp & Brier, 1999).

Dimensions of Business IT Alignment

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

The social factors of the business IT alignment are composed mainly by the actors
in the organization, their values, communications with each other, and the understanding of
each others domain (Hammet, 2008).
Sage (2006) presents a third factor for alignment, the behavioral factor, which is a
measure of the degree to which the business is aligned with the IT department, relative to
successful delivery and operationalization of technology based projects and systems.
Galliers and Sutherland (as cited in Galliers & Leidner, 2003) defined a model of
growth with six stages of organization behaviors relative to the level of alignment and
degree of maturity with the following stages: (a) ad hoc level with uncontrolled ad hoc
approaches to use of IT, (b) IT foundation is created, (c) centralized dictatorship or
initiation of comprehensive planning, (d) democratic dialectic denotes cooperation
between IT and business, (e) entrepreneurial opportunity, and (f) full alignment of business
- IT with an integrated and harmonious relationship between the business and IT.
Henderson and Venkatraman (1993) published a paper that condense several years
of studies about the business IT strategies alignment and presents a process for this
alignment called Strategic Alignment Model (SAM), this is the most complete and detailed
model about this phenomenon and divide the process in two sides, the external and internal
side, and the business and IT side. The external side represents the business and IT
strategies decomposed in three aspects: scope, distinctiveness or competencies, and
governance for each one; the internal side is composed by the administrative and IT
resources needed to carry out the strategies proposed by the senior managers and applied to
the business and IT sides, it has three aspects: infrastructure (architecture in the IT side),
business and IT processes, and personnel skills.

The characteristic of the Henderson and Venkatramans model of alignment is the

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

project or a new service that modify the business strategy (new mobile application),
in order to fulfill the technical requirements the business department must align its
strategies and modify its infrastructure, processes and personnel skills if it is
necessary to use the new product.
4. Service level, where the IT strategy is the enabler and some world-class or critical
service is proposed without the necessity of adapting the business strategy; in this
case the IT infrastructure and processes are adapted to the new IT strategy and the
administrative infrastructure is operationally integrated with the IT infrastructure.
For instance, IT detects a new product or technology (video conferencing on line or
unified communications) and adapts its infrastructure, processes and personnel
skills to implement this new product or technology, once it is implemented an
operational integration is made with the administrative infrastructure of the business
to permit the use of the new technology.