It alignment

Short communication

Information Technology Alignment Planning—a case study

Dan Peak a,*, C. Steve Guynes a,1, Verlyn Kroon b

a College of Business, University of North Texas, P.O. Box 305249, Denton, TX 76203-5249, USAb Omaha Public Power District, 444 S. 16 Street Mall, Omaha, NE 68102, USA

Received 6 May 2003; received in revised form 11 November 2003; accepted 27 February 2004

Available online 6 February 2005

Abstract

This paper describes the Information Technology (IT) Alignment Planning process—a strategic IT planning process created

to complement the corporate planning model used by a major utility company in the Midwest. Corporate planning activities

produced the divisional strategies, critical success factors (CSFs), and goals that then were used to by the ITAlignment Planning

process to align IT within the company.

The process is intended to aid in making the best possible use of IT resources in meeting the corporation’s business

objectives. Fifty-eight managers from five major business units participated in the study. Several important factors and their

resulting benefits were identified. The model utilized an intuitive color-coded alternative to statistical output that was readily

accepted by management. We found that the process helped align IT with business strategies and improved and facilitated

communication on IT project management and development.

# 2004 Elsevier B.V. All rights reserved.

Keywords: IT Alignment Planning; Corporate planning; Critical success factors; Business units; Goals; Main thing

www.elsevier.com/locate/dsw

Information & Management 42 (2005) 635–649

1. Introduction

IT Alignment Planning is a process that enables IT

clients to achieve their objectives by delivering quality

information from IT products and services. It involves

the identification of requirements and, delivery if

information, products, and services and continual

monitoring and measurement of the effectiveness of

the system [5].

* Corresponding author. Tel.: +1 940 565 3110;

fax: +1 940 565 4935.

E-mail addresses: [email protected] (D. Peak), [email protected]

(C.S. Guynes), [email protected] (V. Kroon).1 Tel.: +1 940 369 7210; fax: +1 940 565 4935.

0378-7206/$ – see front matter # 2004 Elsevier B.V. All rights reserved

doi:10.1016/j.im.2004.02.009

Alignment of strategic corporate planning with

plans of the strategic business units still remains a key

need of business executives [7,18]. In a supporting

role, IT Alignment Planning also has emerged as a

necessary task of many senior managers [16,12] while

commercial IT research organizations such as Gartner

[21,22] have listed IT alignment as a top issue of

American companies. Understanding and leveraging

the business–IT partnership allows organizations to

use IT as a business strategy enabler [15]. The

resulting harmony can then be extended and applied

throughout the organization.

By tying the IT planning process directly to each

business units’ critical success factors (CSFs), IT

.

D. Peak et al. / Information & Management 42 (2005) 635–649636

Table 1

IT roles

Role description IT role in

regulatory

IT role in

competition

Business Operational Strategic

Planning Operational Strategic

Maintenance and support Primary Secondary

Consulting and advisory Secondary Primary

Visioning Secondary Primary

Developing business long-term vision Secondary Primary

Developing client long-term vision Secondary Primary

Alignment Planning takes a strategic view across the

corporation. It identifies or discovers and creates new

IT strategies, identifies and creates new IT resources,

provides input into strategic and tactical planning

processes, and factors in the effects of competition

with the primary objective of improving information

quality for IT clients [19,24,23].

IT alignment involves making good use of IT

resources in meeting the corporation’s business

objectives [4]. Strategically, it is a process for

anticipating future IT requirements of the corporation

to ensure that it will be prepared to meet the challenges

of competitors. Tactically, it is a process of corporate-

wide IT resource allocation, analogous to labor or

asset resource allocation. Operationally, it is a process

for achieving IT effectiveness and efficiency, in an

effort to keep the business running smoothly and

supporting customer requirements.

IT alignment has become a top issue for manage-

ment and is expected to remain so [8,13,17,20]. The IT

Alignment Planning process fits well with corporate

strategic planning, particularly when it also involves

corporate alignment.

2. Deregulation as a motivation for IT

Alignment Planning in the USA

The US electric utility industry, directed by US

federal legislation, is transitioning from a regional,

regulated environment to a national, competitive one

where retail customers choose their supplier. Dereg-

ulation throughout the US is occurring on a state-by-

state basis, with the push for competition originating

from large consumers in markets where electricity

prices are high. The US Congress reacted, in 1978, by

passing the Public Utility Regulatory Policies Act

(PURPA), which made it possible for non-utility

generators to sell electricity in the wholesale power

market, though it appears that electric transmission

and distribution will remain regulated and non-

competitive [6].

Throughout the United States, industry, and the state

legislators are investigating the effect of deregulation

on utility supply, delivery, and investments. Although

all states are planning electric industry deregula-

tion, each will decide when and may even halt the

process.

Some states have enacted a time-certain approach;

the legislature designates a timetable for deregulation.

However, Nebraska has adopted a condition-certain

approach, where a set of pre-specified market condi-

tions, as they arise, trigger deregulation. In Nebraska,

the wholesale market price of electric power must

match or fall below the Nebraska utility price for a

specified period before the legislature can proceed

with the plan [1].

2.1. Deregulation brings competition

Deregulation is a powerful motivator for trans-

forming IT into a strategic role. In companies where it

plays a supporting role, the IT organization focuses on

client support activities, but IT clients predict their

own future. Thus, IT is not heavily involved in the

long-term, executive-level planning process.

In companies where IT plays a strategic role, it still

supports its clients but is strategically involved with

them—both IT and clients predict the future. IT is

intimately involved in the long-term, executive-level

planning process, because this role casts it as a

strategic resource (Table 1).

Deregulation highlights the importance of aligning

business goals across the corporation and aligning

business goals with IT. A competitive company can

use IT Alignment Planning to connect strategic and

tactical business goals with IT strategies, resources,

systems, and services, providing business units with

the information they need to be competitive.

3. The Alignment Planning context

Omaha Public Power District (here termed ‘‘the

Company’’) is a not-for-profit organization. It is a

D. Peak et al. / Information & Management 42 (2005) 635–649 637

governmental subdivision of the state of Nebraska

and owned by its approximately 3,00,000 customers. It

is a vertically integrated retailer and wholesaler,

containing both nuclear and fossil fuel generating

plants, a transmission and distribution infrastructure,

and marketing and service units. The management

structure is hierarchical, with a president/CEO

reporting to an elected board of directors. The eight

board members, who campaign and run for public

office every 2 years, serve as the representative rate-

setting body. The president and the direct reports make

rate recommendations to the board based on revenue

estimates. Board-approved rates serve to recoup costs,

maintain the operating capability, anticipate future

requirements, and provide value to customer–owners

and security to bondholders.

In 1998, the information technology division (ITD)

of the company jointly developed an IT Alignment

Planning model with their Energy Services Unit.

The model was used to create an Energy Services

IT Alignment Roadmap, which identified areas of

concern and resulted in the plans for IT systems and

related products. The alignment roadmap served as a

pilot for the corporate-wide implementation of an IT

Alignment Planning process.

In 2000, the process was revised to make it more

efficient. The data collection was automated with

electronic group meeting software and spreadsheets

were designed to analyze the data. With the support of

upper management, the process was applied to the five

company business units with the object of providing a

high-level, management view of information concerns

and possible solutions.

3.1. Corporate strategic Alignment Planning

Every year, the company went through a strategic

planning process: plan, deploy, and review (PDR).

This was a process whose purpose was to focus the

company’s activities and resources against established

priorities and to ensure alignment with corporate goals

and measures. PDR was not a strategic planning

method in a traditional sense, because it had no

alignment component. Instead, PDR was a systematic,

top-down, goal-oriented planning and alignment

process that successively allocated performance

responsibility for corporate-level goals from the top

through the lower levels, which were funded through a

budgeting process; performance against budget was

measured from the bottom up. The company largely

determined its own performance success, conditioned

by the market environment, based on the performance

results aggregated from lower-level goals. The PDR

process also drove the performance measurement

system for professional employees. PDR was docu-

mented in The Power of Alignment [10].

After corporate-level pdr, the corporate strategic

plan was developed by the business units, divisions,

and departments through all levels of the hierarchy.

Responsibility is allocated by job function, except in

cases of shared measures, where PDR identified key

business processes that extended beyond divisional or

unit boundaries. Management determined that shared

measures fostered alignment across unit boundaries

and contributed to an overall alignment with corporate

business goals. Several PDR items are defined as

follows (Fig. 1):

� M

zation. The element that could improve performance

in the near term. Determined by customers through

consensus achieved at a facilitated meeting.

� C

indicator of success.

� S

nity for breakthrough improvement in performance.

It is actionable, measurable, and achievable. Because

it is fundamental to organizational performance,

a PDR Planning Goal could take years to achieve.

3.2. IT Alignment Planning and information quality

The measures of information quality (IQ) were

developed jointly by the IT and client organizations

during the pilot study. For many years, IQ was a critical

concern and active area of IT research [9,11,14].

However, the inconsistency of the results and lack of an

accepted IQ standard, other than TQM and the Baldridge

Award methods, led them to develop an IQ measure that

both the IT staff and clients considered appropriate.

4. Theoretical foundation for the model

Detailed planning alone or isolated strategic

decision making will not provide a good change

D. Peak et al. / Information & Management 42 (2005) 635–649638

Fig. 1. Strategic Alignment Planning: critical success factors.

strategy. What is required is an integrated and dynamic

view of the organization and its environment, where

strategy making is part of a continuous process as a

part of organizational growth and survival. Aligning

the IT strategy with an existing business plan allows

managers and planners to define a course of action and

develop an IT strategy to bridge the gap between IT

reality and the strategic target. Alignment takes into

account management processes and practices, coordi-

nated planning capabilities, accountability processes,

service level agreements, and organizational princi-

ples, culture, and structure.

IT Alignment Planning advocates that an IT

organization should plan with clients, not just for

them. Thus IT will support the CSFs, processes, and

drivers of all business units and becomes an integrative

and binding force across the corporation (see Fig. 2).

The deliverable for each business unit, a custom

IT Alignment Roadmap, contains a list of ranked

concerns (information gaps), a prioritized develop-

ment plan with a schedule of candidate IT solutions,

and a management-level portfolio of IS. The deliver-

able, the IT Alignment Plan that integrates the

business unit Roadmaps, provides consistent, corpo-

rate-wide IT vision and status, and also functions as a

capital budgeting tool for major IT resources, projects,

and systems (see Fig. 3).

This becomes a high-level IT planning product

customized for each corporate business unit. Major

deliverables include: (1) a management-level portfolio

of important IT systems and products; (2) a prioritized

list of information solutions (e.g., systems, enhance-

ments, strategies, projects, training programs) contain-

ing estimates of size, resources, new technologies,

dependencies, cost benefit, and installation date; and

(3) a solution delivery schedule.

The IT Alignment Plan reconciles and integrates

the IT Alignment Roadmaps. Major deliverables

include: (1) a consistent, comparative, prioritized

view of new and current IT projects across the

corporation that can be used for strategic planning and

capital budgeting; (2) a consistent view of major

information needs and concerns across the corpora-

tion. IT Alignment Planning creates links between

the strategic and the operational levels of the cor-

poration.

4.1. Four information dimensions used to assess

information quality

There are four information dimensions to assess

IQ: CSFs, business process, information needs, and IT

products and systems (Fig. 4). These four were

selected as major elements of the PDR and company

IT planning processes to examine IQ from the strategic

through operational levels, and to highlight the areas

of concern by examining their dimensions two at a

time.

D. Peak et al. / Information & Management 42 (2005) 635–649 639

Fig. 2. IT Alignment Planning: building the BU IT alignment

roadmap.

4.1.1. Information dimension I: critical success

factors

A CSF is a key operational or cultural indicator

of success within control of the organization. Each

‘‘Main thing’’ is expressed with approximately three

to six CSFs, against which responsible managers

are measured. Managers are measured against one or

more CSFs.

4.1.2. Information dimension II: business

processes

Managers are responsible for all or parts of a

business process which transforms inputs to outputs,

adding value for the customer. The corporation has

five major processes, while business units have

approximately six. Vice presidents are responsible

for all processes within control of their unit, and

partially responsible for shared processes across units.

Division managers are responsible for all processes

within control of their division and partially respon-

sible for shared processes across divisions or units.

4.1.3. Information dimension III: information

needs

Employees need some information to complete

their task; whether they are able to acquire it or not, it

is an information need (IN). Information needs are

divided into five categories:

(a) O

(b) B

five and seven specific elements; e.g., customer

knowledge, service, and satisfaction.

(c) P

recruitment, skill assessment and training.

(d) F

analytical and forecasting for several units.

(e) I

effectiveness, system selection methodology.

4.1.4. Information dimension IV: IT systems

and products

Information is provided to employees by IS,

products, and services.

Based on customer perceptions of performance and

customer requirements, some IT products should be

enhanced, some may call for more customer training,

and some may suggest a study to define customer

concerns. Fig. 4 illustrates the four business informa-

tion dimensions, listed in order from most strategic to

most operational.

5. Methodology

Out of approximately 200 professional managers in

the corporation, 75 senior and upper-middle managers

were identified by IT and senior management as

candidates to participate in the IT Alignment Planning

process. Because it was not known by people in

other areas, a representative group who were both

knowledgeable and willing participants were selected.

D. Peak et al. / Information & Management 42 (2005) 635–649640

Fig. 3. Buisness unit IT alignment roadmaps align BU information requirements with the BU strategic plans.

Fig. 4. The four business information dimensions reveal information concerns, which suggest IT solutions.

D. Peak et al. / Information & Management 42 (2005) 635–649 641

In addition, all managers were given allowed to

involve senior professionals who possessed manage-

ment-level understanding of their information needs

as advisors or substitutes. Ultimately, 58 individuals

participated in the study, including 49 managers and

nine selected professionals.

Using their 1998 pilot study templates as a model,

information templates for each BU were prepared from

four information matrices, constructed of paired

information dimensions. The rows and columns of

each matrix were filled with preliminary information.

The CSFs columns were primed with those in the

business unit strategic plan. The business processes

and information systems were extracted from IT

information architecture files. To complete the plan-

ning templates for each BU, the authors then met with

IT and BU managers to confirm the BU processes,

identify information needs, and confirm which were

the important information systems.The data collection

process of IT Alignment involved four main steps:

(1) I

Key management-level personnel from each

business unit were identified and contacted. This

information was used to prepare a template IT

Alignment Roadmap and IQ survey.

(2) A

Assessment Survey was administered electroni-

cally to managerial-level personnel for each

business unit. Three surveys with approximately

700 questions were administered using an electro-

nic data collection tool. The survey results were

plotted in four 2 � 2 matrices, using color to

indicate missing (black), inadequate (red), marginal

(yellow), or adequate (green) information. Man-

agers could view IQ trends in color—e.g., a

predominantly green chart indicated that the

business unit perceived it was receiving adequate

information.

(3) D

tion: Based on perceived importance of information

received, the survey results were stratified into

three categories: high, medium, and low impor-

tance. Those receiving the highest importance

and the lowest quality scores were the gaps, and

these areas were grouped into information concerns

which were presented to the business unit managers

for verification and prioritization.

(4) I

systems: Based on the results and BU verification,

both IT and the business units jointly identified

possible solutions for top information concerns.

Solutions included: (a) strategies, such as studies,

plans, tasks; (b) new projects, such as product

acquisition, process reengineering, enhancement;

and (c) systems, such as new or acquired IS

designed to address the issues. The IT alignment

participant managers then estimated budget,

cost/benefit, schedule, resource requirements

and assigned priorities. These candidate solutions

were entered into the BU IT Alignment Roadmap.

Solutions that achieved the corporate acceptance

thresholds became part of the final BU IT

Alignment Roadmap and the IT Alignment Plan,

and ultimately part of the IT Strategic Plan.

6. Assessing information quality andinformation gaps

Clients of IT assessed the quality of information

they received as they performed their jobs. To assess

the IQ of a paired set of information dimensions,

clients were asked: Are both of these dimensions

important to me as I perform my job? and if the answer

was ‘’Yes,’’ then What is the quality of information

that I receive as I perform my job?

Mentally acclimating study participants to the

questions that described the impact of paired

dimensions on them required mental effort and

patience on everyone’s part.

IQ scores collected from management were

recorded in four information quality matrices.

Matrix A—Business processes to CSFs. This

represented the highest strategic level of inquiry.

Managers will be responsible for all or part of one or

more processes. They will also be assigned to perform

to one or more CSFs. Management was asked to assess

IQ they receive as they performed a process and as

they satisfied the CSF (Fig. 5A).

Matrix B—Information needs to CSFs. Every

manager had information needs that could be assessed

individually. However, by assessing how that informa-

tion need was served in the performance of a specific

CSF focused on the issue and served as the basis for

user-directed discussion (Fig. 5B).

D. Peak et al. / Information & Management 42 (2005) 635–649642

Matrix C—Business processes to IT systems or

products. Managers and their employees are clients of

IT and users of IT systems and other products.

Managers were provided with a list of IT systems

and products they identified as important to them, and

then asked to assess the quality of information they

received from them as they performed a specific

business process (Fig. 5C).

Fig. 5. Information quality matrices with paired information quality d

www.coba.unt.edu/oppd).

Matrix D—Information needs to IT systems or

products. This represents the lowest operational

level of inquiry. Managers were asked to assess

the quality of information they received in fulfil-

ling their information needs. A low IQ score

indicated that a specific IT system provided

inadequate support for a specific information need

(Fig. 5D).

imensions and information quality scores (For color see http://

D. Peak et al. / Information & Management 42 (2005) 635–649 643

Fig. 5. (Continued ).

6.1. Information quality scores

When the respondents (IT client managers)

assessed the quality of the information they received,

the resulting numerical assessment ratings were called

information quality scores (IQS). Respondents could

choose from five color-coded information quality

scores, where the IQS could be: 3 (Adequate = green),

D. Peak et al. / Information & Management 42 (2005) 635–649644

Fig. 6. Facilitate.com questionaire reponses: A column of information quality scores in matrix B—information needs to CSFs. (For color see

http://www.coba.unt.edu/oppd).

2 (Marginal = yellow), 1 (Inadequate = red), 0

(Missing = black), or N/A (Not applicable = white).

Stoplight colors ere intuitive to managers, and a

matrix of such scores could easily be interpreted by

most people. A mostly green matrix indicated overall

adequate information, while a mostly red matrix

indicated inadequate information (Fig. 6).

6.2. Information concerns

An information concern is the information gap for

an IT client; it is then a candidate for immediate

attention. Although IQ matrices may exhibit multiple

areas where IQSs are inadequate, the true objective

is to identify a high-concern areas that require

priority attention. If the respondent has identified an

information area as important and does not feel that

he/she has been receiving adequate information, then

there must be an information concern—resulting

from a low IQS and a high information need

importance rating (INIR). This is the first indicator

of information importance. It is the average rating

that respondents assign to each of their stated

information needs (IN). Respondents could rate an

IN as having low (0), medium (1), or high (2)

importance. They entered their ratings into the

Facilitate.com electronic meeting software, which

collected, calculated, and assigned an average score

for each user information need [3]. Thus, INs for all

BUs were scored the same way across the corporation.

Because BUs competed with each other for IT services

and project resources, comparable scoring was

essential. It partially eliminated the inclination of

some managers to bias their responses for comparative

advantage. It also gave senior managers an apples-to-

apples view of information needed across the cor-

poration; it was the senior managers who were the final

authority on project priorities.

D. Peak et al. / Information & Management 42 (2005) 635–649 645

The number of voters was the second indicator.

When managers rated the IQ they received for a

question, they were asked to respond only if the

question area was important in their job. For example,

if two managers in the same business unit had

orthogonal responsibilities, each would respond to

different questions. If a higher percentage responded

to one, the higher percentage response was deemed

more important. Corporate managers understood the

implications of majority voting and were willing to

adjust importance levels after the scores were

tabulated. As the INIR scores were interpreted in

the context of the IT alignment process, this process

was more likely to provide IT clients the information

they believe that they needed.

6.3. The importance of visualization and color

A key feature of the ITAlignment Planning process

was being able to visualize information quality. A

group of clients and IT managers authored this

technique. When the planning model was being

developed, the pilot group consistently stressed the

need for intuitive visual scoring and analysis.

Numbers and statistics told a part of the story, but

they wanted a picture to aid them. After considering a

number of alternatives, the group settled on colors as

the preferred technique.

During the pilot study, managers assigned informa-

tion quality scores with color alone. The group would

discuss each square and decide its appropriate color.

As the discussion progressed, the matrices would

gradually evolve into splashes of color. Not surpris-

ingly, color scoring was intuitively compelling but

extremely slow. The group agreed that the scoring

process should be faster.

Data collection was automated by using a GDS

tool: Facilitate.com. This cut data collection time

substantially and made it practical to implement IT

Alignment Planning across the entire company. A

color data display has, however, become the primary

output feature of the process.

6.4. Assigning an information quality score

During data collection, respondents were asked

to assess the quality of information they received as

they performed their jobs. If they were receiving the

‘‘right’’ information to make the best decisions or the

‘‘right’’ information to do their job, then the IQ was

adequate. Detailed knowledge of neither the delivery

technology nor the information origin was necessary.

Respondents were also asked to use their own

perception of IQ, reflecting their own job needs,

points of view, and best judgment.

To score an item, respondents went through a

two-stage assessment process. First, the information

had to be important to them. If not, they skipped the

question, and it received the default N/A. Second, if

the information was important, they assessed the IQ:

if any important aspect was questionable (e.g., not

immediately available, inaccurate, unreliable), the

item would receive a score of 2 (marginal) or less (see

Fig. 6).

Managers may believe that they need information,

whether it was available or not. Regardless, the IT

Alignment Planning process attempted to identify

information gaps wherever they existed and resolve

them.

7. Formulating IT solutions

BU CSF and business processes studied during the

BU strategic planning process can generate IT

Alignment information gaps. These, when identified

and ranked in importance, encouraged discussion

between the IT organization and the BU for possible

solution. Sometimes these were apparent, but some-

times they required additional thought and activity.

IT solutions included new projects, systems, and

other IT products. Solutions also included the

development of new IT strategies. To plan and

implement a solution, IT managers aggregated groups

of related projects and activities into activity (work)

streams and then estimated the required resources,

finally putting them into an activity stream schedule—

the master. As a result, IT Alignment tied the

information gaps identified at the strategic and process

levels of the organization to IT system and product

solutions. Thus strategic information concerns were

operationalized into solutions that could contain a

spectrum of projects, systems, products, and other

means, or just a single task or project.

Specific BU solutions were indentified and listed in

the BU IT Alignment Roadmaps, where they were

D. Peak et al. / Information & Management 42 (2005) 635–649646

Fig. 7. Business–IT projects are reconciled in the IT alignment plan.

Fig. 8. The summary information quality matrix, which aggregates

scores of each of the four information quality matrices.

prioritized and scheduled into activity streams that

gave managers a grouped, high-level perspective of

similar solutions. Once all proposed BU solutions had

been justified as valid cases, aggregated activity

streams and projects from across the corporation were

reconciled in the IT Alignment Plan with strategic

input provided by senior management. Finally, all

activities and projects, with enabling technology and

resource requirements, were factored into the IT

Strategic Plan (Fig. 7).

7.1. The summary information quality matrix

The summary information quality matrix in Fig. 8

was a four-quadrant synthesis of the four paired

information dimension matrices. It was a composite,

color-coded, meta-matrix of the four information

quality matrices created for each BU, representing a

continuum on the y axis from operational information

(lower left quadrant) to strategic information with a

continuum on the x axis from individual, functional

information requirements (lower left quadrant) to

business process information requirements. Each

D. Peak et al. / Information & Management 42 (2005) 635–649 647

quadrant was then assigned a color that summarized

the numerous IQ cells into a single quadrant cell.

Using this scheme, matrix A (upper right quadrant)

provides the most strategic view of the organization’s

IQ, showing that the organization’s business process

information supported its CSF. Matrix D (lower left

quadrant) provided the operational view, showing how

well its job information requirements were being met

by IT systems or products.

The IQ of each BU, then, was summarized to four

quadrants. At a glance, a manager could then absorb

the quality of information being received by a dozen

BU summary matrices. An outcome of IT client

assessment, using a summary matrix with a green ‘‘A’’

quadrant and a red ‘‘D’’ quadrant shows that the

clients have been receiving adequate strategic

information but inadequate operational information.

The summary matrix provided a scorecard for IT,

measuring how its clients perceived that they were

being supported.

8. Limitations

Despite a successful pilot study with a major

business unit, other units expressed apprehension,

because the pilot took 8 months. The VP of the pilot

unit championed the process and, with the support of

the company President, all units eventually partici-

pated. Immediate and full participation would have

greatly sped up the process.

The sheer number of individuals involved and the

data collected was daunting. Not surprisingly, the

meetings required for each participating manager

were either met with enthusiasm or resistance. For

example, two BUs meeting together to collect data as a

group had some traveling managers, requiring that

Table 2

A summary of results

Major results and benefits of the IT Alignment Planning Process

Aligns corporate and client business goals with IT

Creates a decision and capital budgeting tool for IT projects across the c

Dovetails with the corporate strategic planning process

Develops IT vision integrated with business goals and critical success fa

Facilitates executive-level understanding and communication on IT acros

Helps improve operational IT support of clients while addressing long-term

Brings IT and client closer together

data be collected from them individually, using an

online questionnaire with identical formats and

questions—but no facilitator. In four cases, the

researchers met with managers to take them indivi-

dually through the questions. This attention doubled

the data collection time from the scheduled 2–4

months.

Maintaining matrix spreadsheets for each BU and

then consolidating them was a non-trivial task.

Microsoft Excel lends itself well to displaying colored

cell values but is awkward to program.

Finally, training the managers to think in paired

information dimensions was challenging and

demanded patience and understanding. The authors

met individually with every manager to explain the IT

Alignment Planning process. At GDS sessions, the

authors preceded the data collection activity with an

explanation and demonstration. However, once the

data was processed, managers exhibited interest and

enthusiasm, especially since the validation prioritized

their own unit’s IT projects and services side-by-side

with those of competing units.

9. Conclusions

The IT Alignment Planning process was a

successful 4 year activity that involved a pilot

implementation and company-wide implementation

of the IT Alignment Planning process. The benefits for

the company are summarized in Table 2. A corporate-

wide alignment of the business unit goals and

associated IT with the IT unit goals and priorities

was achieved. Our evidence for the success of the

activity came from management feedback in the

annual IT evaluation questionnaire. Also, the added

understanding of BU projects and their priorities

orporation

ctors

s the company

client needs

D. Peak et al. / Information & Management 42 (2005) 635–649648

significantly aided in the preparation of the IT

Strategic Plan.

The process produced a uniform and consistent

decision tool: a capital budgeting tool, for proposing,

evaluating, and measuring IT projects across the

corporation.

It is also noteworthy that the second iteration

required significantly less time to collect information

than the first. The major reason for time efficiency was

the use of a GDS tool. Such tools can also aid the

posting of IQ questions in a Web questionnaire.

Managers need not meet to participate. In addition,

senior managers could monitor the whole alignment

process using the tools.

Non-IT perceptions of ‘‘not good enough informa-

tion’’ called attention to problems that had not

previously been addressed. The products of this

planning activity, together with a high-level of user

satisfaction, were shared throughout the company. The

IT Alignment Planning process improved and facili-

tated communication on IT and the projects through-

out the company, from the executive to the operational

level, and brought the IT and client units closer

together.

References

[1] Wanted Industrial Engineers for Continuous Improvement, IIE

Solutions, 29 December 1997. 26–29.

[3] Omaha Public Power District Annual Report, 2000.

[4] Status of State Electric Industry Restructuring Activity-As

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[7] W.B. Arthur, How Fast is Technology Evolving? Scientific

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1996, pp. 7–14.

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[13] L. Gotlieb, Information Management Commentary. CMA

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[15] G. Hamel, C.K. Prahalad, Competing for the Future, Harvard

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Further reading

[2] Kaizen is not enough. Management Review: Cutting Edge,

September 1997, pp. 25–29.

[25] J.L. Mariotti, Ten steps for shifting an organization, Manage-

ment Review 87.1, January 1998, pp. 367–373.

[26] R.J. Mayer, C.B. Perakath, E.C. Bruce, K.P. Michael, A

Framework and a Suite of Methods for Business Process

Reengineering, Business Process Change, HD 58.8.G77,

1995.

[27] S. Mingay, J. Furlonger, F. Magee, E. Andren. The five pillars

of IS organizational effectiveness, document R-06-6660, Man-

agement Strategies and Directions, GartnerGroup, 18 Novem-

ber 1998.

D. Peak et al. / Information & Management 42 (2005) 635–649 649

[28] R. Papp, Business–IT alignment: productivity paradox payoff?

Industrial Management and Data Systems 99.8, 1999, pp. 367–

373.

[29] Y.A. Pollalis, A systematic approach to change management,

Information Systems Management 13.2, Spring 1996, pp. 19–

25.

[30] J.F. Rockart, J.E. Micheal, W.R. Jeanne, Eight Imperatives for

the new IT Organization, Sloan Management Review, Fall

1996, pp. 43–55.

[31] J. Rosa, CIOs challenged by disparate goals, Computer Resel-

ler News, 7 December 1998, 43.

[32] B. Rosser, C. Smith. Aligning Business and IT Strategies,

Document R-410-103, Management Strategies and Directions,

GartnerGroup, 9 September 1996.

[33] F. Schlier, R. Hunter, K. Harris, T. Berg., Enterprise 2003: the

technology-enabled enterprise, Industry Trends and Directions

Document R-ITD-120, GartnerGroup, 29 January 1998.

[34] D.M. Strong, IT process designs for improving information

quality and reducing exception handling: a simulation experi-

ment, Information and Management 31.5, 1997, pp. 251–263.

[35] B. Tan, Effects of variability on the due-time performance of a

continuous materials flow production system in series, Inter-

national Journal of Production Economics 54.1, 1998, pp. 87–

100.

[36] H.J. Thamhain, Best practices for controlling technology-

based projects, Project Management Journal 27.4, December

1996, pp. 37–48.

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1996, pp. 5–34.

Daniel A. Peak received his PhD in

Business Computer Information Systems

in 1994 from the University of North

Texas (UNT), with majors in Business

Computer Information Systems and in

Finance. An Associate Professor, he has

recently moved back to the UNT College

of Business Administration after serving

at the University of Nebraska at Omaha’s

College of Information, Science and

Technology, which he helped develop. His research interests include

IT governance, strategic IT planning, media systems and human

factors. Dr. Peak has more than 20 years of IT consulting and

planning experience with numerous Fortune 500 companies, and has

won and participated in numerous production and research grants.

C. Stephen Guynes is a Regents Profes-

sor of Business Computer Information

Systems at the University of North Texas.

He received a doctorate in quantitative

analysis from Texas Tech University. Dr.

Guynes’ areas of specialization are client/

server computing, visual computing, data

administration, and information resource

management. His most recent research

efforts have been directed in the areas

of client/server computing and data administration. Some of the

journals in which Dr. Guynes has published include Information &

Management, Communications of the ACM, The Journal of Infor-

mation Systems Management, Journal of Accountancy, Journal of

Systems Management, The Journal of Database Management, The

CPA Journal, The Journal of Computer Information Systems, Infor-

mation Strategy, Computers and Security, and Computers and

Society.

Verlyn Kroon is Division Manager of

Information Technology and CIO of

Omaha Public Power District, a publicly

owned, business-managed electric utility

with approximately 3,00,000 customers

in southeastern Nebraska. As a 29 year

veteran in the electric utility industry, he

has extensive leadership experience in

both the Information Technology and

corporate planning functions of business.

His special interests are in technology planning, and in providing

innovative, practical ideas which add real value to the business. He

shares his business experiences with numerous technology advisory

boards and academic institutions in the Omaha metropolitan area to

further the education of Information Technology professionals. He

sponsored several applied Information Technology research projects

for his employer with faculty of local universities and is an advocate

for strengthening collaboration of the academic and business com-

munities.