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Assessing the relationships among information technology flexibility, IT-business strategic alignment, and information technology effectiveness An investigation of business intelligence implementation
ASSESSING THE RELATIONSHIPS AMONG INFORMATION TECHNOLOGY FLEXIBILITY, IT-BUSINESS STRATEGIC ALIGNMENT, AND INFORMATION TECHNOLOGY EFFECTIVENESS: AN INVESTIGATION OF BUSINESS INTELLIGENCE IMPLEMENTATION by Jordan Bani LAWRENCE NESS, PhD, Faculty Mentor and Chair KATHLEEN HARGISS, PhD, Committee Member MARY KARLENE SANBORN, EdD, Committee Member William A. Reed, PhD, Acting Dean, School of Business and Technology A Dissertation Presented in Partial Fulfillment Of the Requirements for the Degree Doctor of Philosophy Capella University March 2011 UMI Number: 3449293 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI 3449293 Copyright 2 011 by ProQuest LLC. All rights reserved. This edition of the work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, MI 48106-1346 © Jordan Bani, 2009 Abstract Many researchers called for research on the relationship among IT-business strategic alignment (SA), IT flexibility (ITF), and IT effectiveness (ITE) to be extended to broader business environments in private and public sectors. The goal of this study was to fill the gap and address a limitation in previous scholarly research study (Ness, 2005) in the IT executive’s perception of SA, ITF, and ITE via the implementation of business intelligence (BI) applications within the public school districts. The role of BI solution in business is becoming a focal point because BI can be considered as a business driven technologies that delivers the right information in the right way to the right people in the most effective way for effective strategic and operational business decisions. In pursuit of the optimal IT effectiveness, the study findings provided empirical evidence to support the study hypothesis that IT-business strategic alignment has a stronger positive correlation with school districts’ IT effectiveness than IT flexibility; therefore, tighter IT- business strategic alignment and responsiveness were found critical and valuable for school districts’ IT effectiveness and business productivity. The research findings depicted that ITF has no overall impact on ITE; but, ITE in school districts is ultimately decided based on their IT-business strategic alignment. In addition, it can be concluded that sufficient ITF could be considered as an enabler and a prerequisite component for an advanced maturity level of strategic alignment in school districts. Indeed, more research is needed to assess which construct(s) (ITF, SA, and/or ITFxSA) affect organizations’ IT effectiveness and productivity. In a future study, the researcher recommends conducting a cross-industry (private and public sectors) comparison of these constructs via BI systems implementation and usage from both IT and business executives’ perspective. iii Dedication This dissertation study is dedicated to my parents and my wife for their continuous support and encouragement to complete this research. I would like to dedicate this research to my sons and my daughters for their help and encouragement during this study, who tolerated my countless hours of endless research. Finally, I would like to dedicate this study to my oldest brother Dr. Bani, who has been a life-long friend, mentor, and inspiration. iv Acknowledgments I would like to acknowledge and thank my distinguished mentor, Dr. Ness, and my committee members, Dr. Hargiss and Dr. Sanborn, for their guidance, encouragement, and speedy and valuable feedback throughout the dissertation milestones; it has been my distinct honor to work with and to be guided by this committee through my dissertation journey. I would like to thank all the participants of the study survey for their time and willingness to take the survey questionnaire, which made this study findings possible and worthy to both the practitioner and the scholar. v Table of Contents Acknowledgments iv List of Tables viii List of Figures ix CHAPTER 1. INTRODUCTION 1 Introduction to the Problem 3 Background of the Study 7 Statement of the Problem 10 Purpose of the Study 12 Rationale 14 Research Questions 15 Significance of the Study 17 Definition of Terms 18 Assumptions and Limitations 23 Nature of the Study 24 Organization of the Remainder of the Study 24 CHAPTER 2. LITERATURE REVIEW 27 Introduction 27 Information Technology Flexibility (ITF) 29 IT-Business Strategic Alignment (SA) 41 Information Technology Effectiveness (ITE) 60 Business Intelligence (BI) 65 CHAPTER 3. METHODOLOGY 75 vi Purpose of the Study 75 Restatement of the Problem 76 Research Questions 78 Statement of Hypotheses 79 Extended Conceptual Framework Model 81 Operational Definition of Variables 82 Research Design 85 Sample 86 Setting 88 Instrumentation/Measures 89 Data Collection 90 Data Analysis 91 Validity and Reliability 94 Ethical Considerations 95 CHAPTER 4. DATA COLLECTION AND ANALYSIS RESULTS 96 Introduction 96 Research Study Survey 97 Research Study Results 99 Data Analysis for Research Questions 124 CHAPTER 5. DISCUSSION, IMPLICATIONS, RECOMMENDATIONS 136 Overview 136 Discussion 140 Conclusions 145 vii Limitations and Recommendations 147 REFERENCES 149 APPENDIX A. CONSTRUCT ELEMENT TABLE 161 APPENDIX B. IT EXECUTIVES SURVEY QUESTIONNAIRE 166 APPENDIX C. LETTER OF INVITATION TO PARTICIPATE 181 APPENDIX D. DESCRIPTIVE STATISTICS FREQUENCIES 184 APPENDIX E. CORRELATION AND REGRESSION ANALYSIS 233 viii List of Tables Table 1. Scale: Independent and Dependent Variables Cronbach's Alpha 101 Table 2. ITF-Connectivity (ITF1) Frequency Distribution 103 Table 3. ITF-Compatibility (ITF2) Frequency Distribution 104 Table 4. ITF-Modularity (ITF3) Frequency Distribution 105 Table 5. IT Personnel Competency (ITF4) Frequency Distribution 106 Table 6. SA-Communications (SA1) Frequency Distribution 108 Table 7. SA-Value (SA2) Frequency Distribution 109 Table 8. SA-Governance (SA3) Frequency Distribution 109 Table 9. SA-Partnership (SA4) Frequency Distribution 110 Table 10. SA - Scope and Architecture (SA5) Frequency Distribution 112 Table 11. SA-Skills (SA6) Frequency Distribution 113 Table 12. ITE-Quality of service (ITE1) Frequency Distribution 115 Table 13. ITE-Users’ Satisfaction (ITE2) Frequency Distribution 116 Table 14. ITE-Helpfulness of IT Staff to Users (ITE3) Frequency Distribution 117 Table 15. Chi-Square Crosstabs Analysis (n = 174) 119 Table 16. Bivariate Correlations - Analysis (n = 174) 120 Table 17. Partial Correlations - Analysis (n = 157) 124 Table 18. Inter-Scale Correlation Analysis Results (n = 157) 125 Table 19. Stepwise Multiple Regression Model Summary (n = 157) 130 Table 20. Stepwise Multiple Regression Model – Coefficients (n = 157) 131 [...]... enable the company to gain superior business performance and to sustain competitive advantage (Hosseini & Mazinani, 2006; Luftman, 2005; Rajendran & 5 Vivekanandan, 2008) Achieving and sustaining IT -business strategic alignment, flexibility, and effectiveness have been long-standing goals that many IT and business leaders are continually looking and striving to accomplish in their organizations (Luftman,... presentation of critical data and information which allows executives to vie, explore, and make decisions Thus, improving IT efficiency and effectiveness can enable and drive innovation and add business value in an enterprise The attainment of IT efficiency and effectiveness should be the focus of a business s attention and strategic orientation; the goal of IT investment is to complement company strategy and. .. business success and enhances the corporate performance (Chan, Sabherwal, & Thatcher, 2006) IT -business strategic alignment is a high degree of connection between IT and business planning; the corporate business strategic plan asserts the objectives of IT in the business planning, while the IT strategic plan cites the business strategic plan as its foundation (Hu & Huang, 2006) Luftman and Kempaiah (2007)... the enterprise’s vision, goals, and strategies; it is a basic principle of interaction between IT and business Strategic alignment of IT exists when an organization’s goals and activities and the information systems that support them remain in synchronization and provide the support and become an enabler (McKeen & Smith, 2003) Alignment between IT and business strategies enhances business success and. .. how strategic alignment impacts IT flexibility, strategic flexibility, and IT -business value activities, and they have developed a model to examine how IT and strategic flexibility interact with and shape strategic alignment (Tallon & Kraemer, 2003), investigated the information systems’ strategic orientation and its relationship with business performance (Rajendran & Vivekanandan, 2008), examined the. .. IT -business Strategic Alignment (SA) IT -business strategic alignment can be defined as the degree of alignment, fit, and integration among business strategy, IT strategy, IT infrastructure, and business infrastructure (Henderson & Venkatraman, 1993) According to Huang and Hu (2007), IT -business strategic alignment (SA) involves active design, management, and execution of the IT functions in accordance... Organizations have been using and implementing IT applications and BI applications to create efficiency and effectiveness, and add value creation IT organization must show IT’s effectiveness and efficiency in meeting business strategic and operational services (Luftman, 2005) Hosseini and Mazinani (2006) concluded that the effectiveness of IT services and their support of business processes is 20 directly... partners, and other stakeholders) to interact and access data, and provides them with the ability to conduct appropriate analyses to perform actions Thus, the process of BI is the transformation of data and information from diverse data sources and applications to information and knowledge, then to decisions and actions The empirical 22 study of K-12 public school districts wass designed to assess the relationship... agility and flexibility by promoting and providing effective use of BI across the organization A key selling point of BI is its 19 flexibility to meet diverse and rapidly changing business requirements (Soh, Sia, Boh, & Tang, 2003) Attaining IT flexibility requires close relationships and partnerships between IT and business, and leadership and commitment by IT and business executives (Luftman, 2005) The. .. efficiency and IT effectiveness according to Tallon, Kraemer, and Gurbaxani (2000); IT efficiency achieves as a result of using IT automation and standardization to improve performance and productivity and to reduce operation costs Information technology effectiveness comes as a result of using IT flexibility and 2 IT -business strategic alignment to foster greater responsiveness and flexibility to the dynamic . ASSESSING THE RELATIONSHIPS AMONG INFORMATION TECHNOLOGY FLEXIBILITY, IT -BUSINESS STRATEGIC ALIGNMENT, AND INFORMATION TECHNOLOGY EFFECTIVENESS: AN INVESTIGATION OF BUSINESS INTELLIGENCE IMPLEMENTATION. understand that IT effectiveness and efficiency can lead to better organization performance and support and enable its strategic business needs. Ranganathan and Brown (2006) asserted that organizations. and effectiveness can enable and drive innovation and add business value in an enterprise. The attainment of IT efficiency and effectiveness should be the focus of a business s attention and