Alignment between business and IT strategies : a case study at a transport organisation

Abstract

For almost three decades practitioners, academics, consultants, and research organisations have identified 'attaining alignment between IT and business' (Luttman & Kempaiah, 2007), as a pervasive problem. Despite the wide acceptance of the term "strategic alignment", there was no consensus on how to achieve alignment. The research philosophy was of an interpretive study and an inductive research approach was used. The research strategy was by means of a case study, namely PRASA Western Cape, a business unit of Passenger Rail Agency of South Africa (PRASA). The time horizon for this research was cross sectional. For the data collection a semi-structured interview, supported by secondary data from the business plan and annual report, was used. The research problem was "PRASA has dysfunctional and fragmented institutional arrangements, resulting in misalignment between business and IT". The primary research question to address this problem was "How can PRASA manage strategic alignment between business and IT?" The aim of this research was to understand why the misalignment between business and IT strategies exists at PRASA. A further aim was to propose a guideline to manage alignment between business and IT strategies with the intention of overcoming the fragmented and dysfunctional institutional arrangements. To address resolving the research problem three theoretical models were used. The strategic alignment model was used to ascertain the strategic perspective of PRASA as well as to identify the external strategic fit and internal functional integration of an organisation. The second model used was the strategic alignment maturity model. This model was used to identify the alignment maturity of the business/IT strategies. The final model used was the balanced scorecard. Alignment is one of the best practices recommended by the balanced scorecard, and it recommends aligning all to the strategy of the company. The reason for using the balanced scorecard was that the company currently uses this tool to manage performance. The research finding concluded that PRASA had the strategic execution alignment perspective - business strategy dictates the IT strategy. The overall strategic alignment maturity of the organisation was found to be in initial process. The balanced scorecard methodology was known by all, yet few knew what the performance measures for the organisation was for the year. The triangulated conclusion was that strategic alignment between business and IT was a problem at PRASA. The recommendation was that the organisation conducts three surveys firstly to identify its strategic choice, secondly to identify the strategic alignment maturity and lastly to do a balanced scorecard best practice survey.