Contingent dynamics of IS strategic alignment in small and medium‐sized enterprises

Abstract

PurposeThis paper seeks to understand how strategic information systems (IS) alignment takes place in small and medium‐sized enterprises (SMEs).Design/methodology/approachThe paper employs a qualitative and quantitative analysis of data from 27 cases.FindingsA contingent model allows re‐interpretation of earlier findings that appear to be inconsistent. First, benefit realisation depends on alignment between IS and business strategies. Second, IS investment is frequently limited to supporting operations and transactions. Third, organizations with more sophisticated IS tend to perform less successfully than those with less complex systems, the greatest alignment and highest performance are reported for systems to improve efficiency, and organizations that adopt a low‐cost approach are unlikely to use IS strategically.Research limitations/implicationsThe paper extends understanding of the contingent nature of SMEs' investment in, and use of, IS, and of the effect of market position on IS management. It provides guidelines by describing the dominant paths to alignment. The limitations are that the SME sample is not random, the scoring protocols rely on author coding, whether the research identifies cycles of alignment, alternative interpretations of path hierarchy, and if an SME's location uniquely defines its alignment path.Originality/valuePerformance is a function of the alignment between IS strategy and other business domains. However, prior research has focused on outcomes, rather than the processes by which alignment is developed. Using multiple case data, this paper investigates alignment in SMEs, explaining why different SMEs follow different paths to alignment. Four paths are identified, with the path chosen contingent on an SME's market position.