Alignment of information systems strategy with business strategy: impact on the use of IS for competitive advantage

The strategic application of information systems can convey important competitive advantages. For this reason, it is essential to understand what factors influence the strategic use of information resources and what relationships exist among these factors. This dissertation introduces a research model for studying the influence of strategic alignment on the ability of the firm to provide IS-based competitive advantage. The model uses three reference theories: contingency theory, strategic management theory, and the resource-based view of the firm. The variables of the model are operationalized using a combination of previously tested and new measures. The primary dependent variable, the use of information systems to provide competitive advantage, is measured using questions based in Porter's theory of competitive forces. Responses from 161 surveys completed by IS executives provided data for a structural equation model. The model has six factors: (1) the information intensity of the organization's value chain: (2) the IS executive's participation in business planning; (3) the CEO's participation in IS planning; (4) the alignment of the IS plan with the business plan; (5) the alignment of the business plan with the IS plan; and (6) the use of IS for competitive advantage. Six of the eight relationships among the factors are statistically significant at the.01 level. In particular, the analysis supports hypotheses that the information intensity of the value chain influences both the IS executive's participation in business planning and the CEO's participation in IS planning. The analysis also supports the hypothesis that the level of the IS executive's participation in business planning influences strategic alignment of the IS plan with the business plan. Further, high levels of that alignment are associated with increased use of information resources for competitive advantage. Researchers, and practitioners can benefit from this study. Researchers can consider using the resource-based view, a relatively new approach to studies in information systems, in their own work. Researchers can also benefit from the increased understanding of the relationships herein and thus can test further related hypotheses. Practitioners can benefit from the knowledge of how organizations use participation in planning to create alignment and thus IS-based competitive advantage.