An Empirical Study on Strategic Alignment of Enterprise Systems

Abstract

This study examines the relationship between business strategy, ES strategy, strategic alignment of these strategies, flexibility and the business performance. The study examines alignment as a matching approach. A questionnaire survey was conducted to gather data from North American participants from service and manufacturing industries. The Partial Least Squares (PLS) method that is a Structured Equation Modeling (SEM) based statistical tool was used for analyzing the data. The study results show alignment has a significant and positive impact on performance. The alignment mediates the relationship between strategic flexibility of ERP and business performance. In order for ES to contribute to business value or performance, ES strategies need to be aligned with business strategies. The main limitations of this study include sample size (N=92) and possibly the nature of the data as the study uses cross-sectional data rather than a longitudinal study. The study results can help managers and practitioners to prioritize their ES plans and investments. The practitioner-oriented version of the instrument of this study and the methods can be used to continuously assess the organizations’ realized business strategy instead of planned strategies, especially when there is a shift in the business environment.