Alignment of Business Strategy and it Strategy: A Case Study of A Fortune 50 Financial Services Company

Abstract

In recent years, information technology (IT) has become a critical tool for the execution of business strategy and a driver of business strategy. The alignment of business strategy and IT strategy has emerged as a critical issue for organizations. Using a case study approach, this research study identifies the reasons why alignment gaps exist between business strategy and IT strategy and suggests methods which can be used to minimize those strategy alignment gaps. Senior executives at a large Fortune 50 financial services company were interviewed in order to examine whether alignment gaps between business strategy and IT strategy existed at this organization, the reasons why the strategy alignment gaps exist, and how the strategy alignment gaps could be minimized. The results suggest that improving the business strategy and vision, and communication of the business strategy and vision has the greatest potential for improving the alignment of business strategy and IT strategy. The degree of alignment between various business areas was found to have a major impact on the alignment of business strategy and IT strategy. Two effective methods of aligning IT strategy and business strategy were identified: (i) developing a robust, business architecture, and, (ii) establishing a separate, centralized IT department.