Alignment of IT and business strategies in small and medium-size enterprises in the Eastern Cape Province.
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Date
2017
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Abstract
In today’s business environment, leveraging Information Technology (IT) is of key
importance as it helps organisations improve their performance. However, to achieve this,
companies must ensure that their IT and business strategies are aligned.
The fundamental goal of aligning IT and business strategies is to ensure that IT capability
supports, enables and leads business strategy where appropriate. Alignment explains the
degree to which the business plans, goals, and mission support, or are supported by their
IT complements (Reich & Benbasat, 1996; Walter, Kellermanns, Floyd, Veiga, &
Matherne, 2013). In this, alignment develops into a relationship where business and IT
functions adjust their strategies simultaneously. Such alignment can improve business
performance. Importantly, large amounts of research conducted in this area focus on large
organisations, particularly in developed countries. Yet little is known about the subject in
SMEs especially in developing countries.
This study investigates the alignment of IT and business strategies in SMEs in the Eastern
Cape Province. A survey methodology was employed to collect data, with a questionnaire
as a tool. Forty-two questions developed from four main questions: the state of
communication, the state of IT metrics, the state of IT business planning, and the state of
alignment practices. According to data obtained from the Border-Kei Chamber, at the time
of data collection, there were one hundred and seventy-three SMEs registered with the
organisation. However, from that population, one hundred and twenty-eight questionnaires
were filled, returned and analysed. The results showed significant agreement that there is
communication between IT and business strategies in SMEs, on Metrics and on IT
Business planning. However, pertaining the use of alignment models and alignment
practises, there was a significant disagreement.
The study recommends that SMEs should create platforms to educate IT personnel about
the business; more work on value metric is required. Participation of IT in business
strategic planning should be encouraged. It is recommended that SMEs look into alignment
model/s that can be used to support how IT planning/ investment, managing and
governance of IT is done.
Description
Master of Commerce in Information Ssytems and Technology. University of KwaZulu-Natal, Pietermaritzburg, 2017.