Aligning IT with Business Objectives

The research on IT and business performance has found that $($a$)$ the more successfully a firm can align information technology with its business goals, the more profitable it will be$,$ and $($b$)$ only one$-$quarter of firms achieve alignment of IT with the business. About half of a business firm$$s profits can be explained by alignment of IT with business $($Luftman$,2003).$

Most businesses get it wrong: Information technology takes on a life of its own and does not serve management and shareholder interests very well. Instead of businesspeople taking an active role in shaping IT to the enterprise, they ignore it$,$ claim not to understand IT$,$ and tolerate failure in the IT area as just a nuisance to work around. Such firms pay a hefty price in poor performance. Successful firms and managers understand what IT can do and how it works, take an active role in shaping its use, and measure its impact on revenues and profits.$$Management Checklist: Performing a Strategic Systems Analysis$$ to analyze an organization Tata Motors $.$

What is the structure of the industry in which the firm is located?

What are some of the competitive forces at work in the industry? Are there new entrants to the industry? What is the relative power of suppliers, customers, and substitute products and services over prices?

Is the primary basis of competition quality, price, or brand?

What are the direction and nature of change within the industry? From where are the momentum and change coming?

How is the industry currently using information technology? Is your organization behind or ahead of the industry in its application of information systems?

Has your organization aligned IT with its business strategy and goals?