Abstract
Academic and management literature hypothesize that organizations that adopt organizational and management practices (“complementary factors”) that improve IT-business communications and partnership are better able to transform their business models. This implies that these firms obtain higher productivity and profitability from IT investments than organizations with comparable levels of IT investment. This study employs a stage-growth model (the “strategic alignment maturity model”) that focuses on the evolution of a bilateral and ideally co-adaptive relationship between business and information technology functions to empirically test that hypothesis. Employing the results of a survey of pharmaceutical industry business and IT executives, this research provides new insights into the relationship between IT-business strategic alignment maturity and firm-level productivity and profitability. This study also helps to quantify important “complementary factors” that provide transformational impact on a firm’s production function by its investments in IT.
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