Effective Management of Information Technology Closing the...

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Journal of Scientific & Industrial Research Vol. 58, March - April 1999, pp 17 1-1 80

Effective Management of Information Technology -Closing the Strategic Divide!

Janice M Burn School of MIS Edi th Cowan Universi ty Perth , W. A., 60 18 Australi a

e-mail: j.burn @cowan.edu.au; Fax: 618 9273 8332

and

Colonel Szeto Far East Data Limited, I OfF On Yuen Bldg. , 485A Nathan Road, Yau Ma Tei, Kowl oon Hong Kon g;

e-mai l: fareast@alu mni .cuhk .edu .hk ; Fax: (852) 2394 1372

A stud y to determine whether there are any significant difTerences in perspectives of IT and business managers wit h regard to the factors which contribute to successfu l strategic ali gnment using Henderson and venkatraman's strategic ali gnment model as the research framework has been rcported .. A general survey was undertaken over a range of industrics and resu lt s indicate th at the two perspectives were largely equ ivalent except for their overall perception of the factors whi ch contributed to success in strategic align ment. However, deta il ed case studies on three cont ainer terminal operators showed very different patterns of al ignment which suggest that successful alignment of IT in industries which are hi ghl y IT dependent wou ld require very different

perspecti ves from both IT and business managers although these perspecti ves were sti ll convergent within the organi sat ion.

Introduction

The co mpl ex iti es of achieving business success throu g h in c reased effi c ie ncy, effec tiv e ness and competitiveness, combined with innovative applications of informati on techn ology (IT), have he ightened the awareness of both IT and busi ness managers toward s more strateg ically oriented approaches for planning and management (Luftman, et at. , 1993). In particular, the need to strateg icall y a lign business and IT planning has been emph as ised as bo th c riti ca ll y important but increas in g ly probl e mati c ( Brancheau et at, 1996, Brancheau and Wetherbe 1987, Burn et at, 1992 and Niederman et at, 1991 ). Thi s paper reports on a study to determine whether there are any significant differences in perspectives ofIT and business managers with regard to the factors which contribute to successful strateg ic alignment and hence contribute to the problems. The study uses the strategic a lignment model Henderson and Venkatraman 's 1989 as the research framework within whi ch data ca n be ana lysed. A general survey was unde rtake n over a range of indu stri es a nd res ults indi cated th at th e tw o pe rspec ti ves were large ly equivalent except for the ir overa ll perception of the

fac to rs whi c h contributed to success in stra tegic a lignment. The combined views of both sets of managers gave a specific pattern of alignment which the majo rity of organi sations appeared to follow to implement their a lignment strategies. However, two detailed case studies on the container terminal operators showed very different patterns of a li gnment which suggested that successful alignment of IT in industri es whi ch are hi ghl y IT dependent would require very different perspectives from both IT and business m a nage rs although th ese pe rs pec ti ves we re still co n ve rge nt within th e organisation.

The conclusion of thi s analys is suggests that strateg ic alignment varies primaril y in relation to the nature of industry and/or its dependence on IT. This also indicates a direc ti on for future research studies of this nature.

Strategic Alignment Model ·

In order to better understand how IT can alter the basic nature of an indu stry, He nderson and Venkatraman, developed a Strategic Alignment Model. Thi s model impli es that effec tive and e ffici e nt utili sa ti on of informati on technology requires the alignment of IT

172 J SCI IND RES VOL 58 MARCH - APRIL 1999

External

Strategic Integration

Internal

Cross-Domain Alignments

Business IT

Business

Strategy

Automation Linkage

Organizational IS

Infrastructure Infrastrucrure

& Processes & Processes

Functional Integration

Figure 1 - Strategic Alignment Model (Adapted fro m Henderson

and Venk ataraman , 1989)

strategies with business strategies , and reflects the view that business success depends on the linkage of business strategy, information technology strategy, organizational infrastructure and processes, as well as IT infrastructure and processes . Figure I shows the strategic alignment model.

This model has two building blocks. Strateg ic fit recogni zes the need for any strategy to address both ex te rnal and in te rn a I domai n s . It is th e ve rti ca I relat ionship of the strategic alignment model. Strategic fit emphasizes the need to make choices that position the enterpri se in an external marketplace and decide how best to structure internal arrangements to execute thi s market-positi oning strategy. The choices that position the enterpri se in a market are called business strategy, and those choices that determine the internal structure of the enterpri se are organizational infrastructure and processes . Performance of the enterprise is defined by the extent to which the choices containing these two strategies are consistent. Using information technology to enhance th ese vertical choices provides th e opportunity for strategic advantages.

Functional integration, on the other hand , refers to the fit between external positioning and internal domain . It is the hori zontal re lationship of the strateg ic alignment mode l. As business strategies change, IT strategies and processes must a lso keep pace. It is in these situations

where different functional relationships are defined. Effective positioning of the firm in the technology market is crucial to its ability to adapt and effectively leverage technology. Functional integration g ives IT the opportunity to provide competitive advantage (White; 1986; Van and Drazin, 1985).

It is the contention of this research study that effecti ve alignment of IT and business strategies can be attained by means of Strategic Information Systems Planning (SISP). Thus, the study attempts to identify factors which contribute to successful alignment in thi s investigation. By coordinating the objectives and views of IT and business managers, it is proposed that companies can outperform those without such alignment. Table I shows the four perspectives of the strategic alignment model and the associated performance criteria which relate to these. Using these, one can identify the factors which should be considered by management to accomplish effective strategic alignment of their IT and business strategies. This has been extensively evaluated by Chan and Huff, 1992 to provide guidance to managers for strategy development and implementat ion and these factors will also be applied in thi s study.

Methodological Considerations

The approach selected for the study was to perfo rm a two-stage investigation. Stage I would be based on a survey which would attempt to identify the factors which impac ted on bus iness and IT managers during the st rategic alignment process . Thi s wou ld enable an analys is of the ir strategic perspecti ves wh ich could be matched against those in Table I, thereby allow ing us to classify the ir strateg ic approaches and contrast the two groups. This had previously been recogni sed as a "cu lture gap" in the study by Galliers ef aI, 1994.

Stage 2 of the in vestigation would be inte rview based and would select a specific industry grou p who reflected a high degree of success in strategic a lignment. These would be compared with the general survey resu lts to see whether there we re sign ificant differences in perspectives. This mixed approach has been strongly supported in the research literature (Straub, 1987; Cook & and Campbe ll , 1979).

In des ig nin g th e qu es ti on na ire, th e fo ll owing assumptions were made: ( I) All companies will perform planning, albeit short

or long term, formal or in fo rmal. (2) All companies will have se parate ge ne ra l

management and IT management members.

...

BURN & SZETO MANAGEMENT OF INFORMATION TECHNOLOGY 173

Table I- The four perspecti ves of Strategic Alignment Model (Adapted from Henderson and Venkataraman, 1989)

Perspecti ves Dri ver Role o f Top Role of IS Performance

Management Management Criteri a

Strategy executi on Business strategy Strategy formul ator Strategy implementor Cost/Service centre

Technology

transformati on Business strategy Technology visionary Technology architect Tec hnology leadership

Competitive potenti al IT stra tegy Business visionary Catalys t Business leadership

Service Level IT strategy Prioriti zer

(3) All companies will have experience in computers and information systems regardless of the size and capac ity of the ir equipment.

(4) The popul a ti on o f IT m anage rs a nd bu s iness managers are both normally, or approxim ate ly normally, distributed. All observations drawn from these two samples are independent in nature and are not re lated to others.

The four perspec ti ves of strategy alignment , name ly, s tra teg y executi o n , tec hn o logy tra ns fo rm a ti o n , competitive potential and service level, were translated into a questi onnaire format. The questi onnaire adhered to th e log ica l s te ps o f s tra teg ic pl annin g a nd implementati on starting with moti ves, objectives and expectation of strateg ic planners. It then shi fts focus to strategic management sty les, roles of management and performance measurement and finall y, the problems and key success factors. By guiding the respondents th rough the comm on stra teg ic manageme nt process, it was believed that the accuracy and re li ability of the survey results could be increased .

In order to collect re liable informati on frolll a small sample size, a pilot test containing fi ve sample companies in banking, insurance and manufacturing industries was carri ed out. All the suggesti ons and recommendations co ll ected in thi s ph ase we re ac knowl ed ge d a nd incorporated into the fin al ve rsion of the questi onnaire for subsequent full scale survey.

A total of 93 replies (22.36 percent) were received in thi s survey. However, fi ve of them were incomplete and

Executi ve leadership Customer sati sfaction

di scarded later. The response rate of around 2 1.15 percent is fairly typical for this type of study. Table 2 shows the breakdown of respondents by industries . It must be noted that most of the respondents who fall in the "Other Industries" category are in the government or non-profit making organizations. They account for 47 percent in the survey. The profil e of respondents represented a neutral mix of both profit-making and nonprofit making organizati ons.

Results of the Survey

In order to tes t the diffe re nces between IT and business managers in the area of strateg ic alignment , twelve hypotheses were constructed based on Henderson and Venkatraman's ( 1989) strateg ic ali gnment model. Each of these hypotheses and assoc ia ted facto rs are explained in deta il below :

Hypothesis I : Perspectives of IT and business managers diff er in regard to their motivation fo r alignment - Four mo ti vat o rs we re co ns id e red : top m a nag e me nt re quire me nt s; bu s in ess /m a rk e t re quire me nt s ; co mpe titi ve require me nt s; and othe rs spec ifi ed by respondents.

Hypothesis 2: Perspectives of IT and business managers differ in regard to the success of alignment as a planning strategy - Five outcomes were cons idered : failure; some benefit s but didn't need matching to achieve these; better than not do ing it ; successful but can improve ; highl y successful.


_ .. . .. . -- -Table 2 - Respondents breakdown by industries

Industries ISIIT Manager Business Manager Total

I mportlexport 7 (70%)(13%) 3 (30%)(9%) 10 (100%)( 11 %)

Wholesale/retail 6 (75%)(11%) 2 (25%)(6%) 8 (100%) (9%)

Finance. insurance.

banking 10 (55%)( 19%) 8 (45%)(24%) 18 (100%)(20%)

Transport. travel

communication 9 (8 1%) (17%) 2 (19%) (6%) II (100%) ( 13% )

Other 22 (54%)(41 %) 19 (46%)(56%) 41 (100%)(47%)

Total 54 (61%) 34 (39%)

(100%) (100%)

Hypothesis 3: IT and business managers have different perspectives concerning their company's objectives in striving for alignment- Six objectives were compared: match information systems capabilities with business needs; seek competitive advantage from IT; gain top management commitment; forecast IT resources requirements; establish technology path and policies ; and others specified by respondents .

Hypothesis 4: The perspective of IT and business managers are different with regard to the expected benefits of alignment - Eight expected benefits were compared: deliver product or service at lower costs; rapid response to the dynamic and volatile business environment; create new products or services ; penetrate more deeply into a specific market segment; improved quality of managerial decision making;increase operational efficiency and productivity;effective utilization of IT resources to support company operations; and others specified by respondents.

Hypothesis 5: IT and business managefs will perceive different drawbacks from the implementation of an alignment strategy - Five negative outcomes were ranked: greater expenditure on information systems and their personnel; threaten status quo of top management in the shift of focus from monetary goals to technology goals;create adaptation problems when changing business practices and organization structure in alignment; create pressure on functional departments to re-design their business processes for improved

88 (100%)

(100%)

efficiency and effectiveness;others specified by respondents.

Hypothesis 6: Perspectives of IT and business managers are different with regard to the goals of corporate strategy -Six corporate goals were considered: sales growth; return on investment; market share; cash flow; customer satisfaction; and others :;pecifi ed by respondents .

Hypothesis 7: Perspectives of IT and business managers are different with regard to their company 's approach to strategic management -Five approaches were considered: maximize investment on IT resources by means of existing infrastructure; implement chosen business strategies through appropriate IT strateg ies ; develop new products/services by exploration of IT capabil ities;stimulate customer demand by building up leadership in IT; others specified by respondents. Respondents were also asked to relate these to the four perspectives of the role of top management in the strategic alignment model as identified by Henderson .. lid Venkatraman (1989), namely (a) strategy execution, (b) technology transformation, (c) competitive potential and (d) service level. This was used to identify whether they perceived the driver of alignment to be business strategy or IT strategy.

Hypothesis 8: Perspectives of IT and business managers differ with regard to the roles which top management should play in strategy formulation - Five roles were


'-- ~ Il:-,idered: articulate options pertaining to business trategy; provide technology vision which best support

chosen business strategy; articulate the impact of IT capabilities on chosen business strategy; find the best way to allocate the resources within the organization;others specified by respondent s. Respondents were again asked to relate these to the four perspectives of the role of top management in the strategic alignment model. Thi s was used to compare their perceived roles for top management against those roles which they self-selected and with which they identified: strategy formulator, technology visionary, business visionary or prioritizer.

Hypothesis 9: Perspectives of /T and business managers are different with regard to the role of /T management in strategy f ormulation -Five roles were compared: design and implement required organization structure to support chosen strategy; design and implement required IT structure to support the IT vision; identify trends in IT to help business manager to understand the potential opportunities and threats for the company; lead the IT function to achieve the strategi c goals of top management ; and others specified by respondents. As with the previous hypotheses this was compared against the four perspectives of the role of IT management in the strategic alignment mode l, and related to their view of the role of IT management as strategy implementor, technology architect, catalyst or executive leadershi p.

Hypothes is 10: Persp ectives of /T alld busin ess managers are different with regard to thefactors which shot,tld be used in measurement of strategy executioll -Four measurements were made : costs and benefit s; technology leadership ; business leadership in terms of market share, growth, new product introduction; and customer sati sfaction . These were again related to the four perspectives of rol e of IT management in strategic alignment model, to determine the focus which they would use for self-measurement 'Jf performance criteria - cost/service centre, technology leadership , business leadership or customer satisfaction.

Hypothesis II : Perspecti ve of/T alld business managers are different with regard to the problems which they encounter in developing strategic alignment - E ight contributing factors were evaluated: top management commitment and partic ipation in the process; changes in business practices and organization stmcture; :,;hor1age

of qualified information systems personnel; estimate the funding levels for IT; reluctance to accept IT as line instead of staff function; lack of understanding of IT potential by top management; lack of shared vision on business strategies; and others specified by respondents.

Hypothesis /2: Perspective of /T and business managers are different with regard to the key success factors in achieving strategic alignment - Five KSFs were considered: match the internal IS function and organization with external marketplace; top management selects appropriate alignment approach to accomplish business objectives; IS and business executives must take multiple line and staff roles; multiple criteria must be used in assessing strategy performance; and others specified by respondents.

In order to test the validity of these twelve hypotheses, a two-tailed F test was applied at 0.05 leve l of significance. The summary of test results is shown in Table 3 and as can be seen, only hypothesis II shows a difference sufficient to reject the null hypothesis.

For hypothesis II, the testing score (F=2.07) is slightly greater than the F ratio . Therefore, the null hypothesis that IT managers and business managers have the same perspective with regard to the problems encountered in arriving at strategic alignment is rejected. In other words, they have different viewpoints - both groups highlight the shortage of qualified IT personnel and changes in business practices and structure as the most critical problems; however, business managers consider that top management commitment is very important , while IT managers think that lac k of understanding of IT potential is a real problem. This divergence in views may reflect the differences in functional background of each group of managers. As more and more business managers become aware of the vital need for strategic alignment and obtain crossfunctional knowl edge and experience, th e s li g ht difference in this perspective may disappear.

The pattern of perspectives of IT and business management on strategic alignment is shown in Table 4.

Overall, the survey indicates that the perspecti ves of IT managers and business managers are remarkab ly consistent with both groups selecting Te chnology Tram/ormation as their overall perspective and business strategy as the driver. However, their roles are seen to be within the Sen /ice Level perspective for both business


Table 3- Summary of hypotheses testing results for survey

Hypothesis IT Size n Manager Business Manager F F

Variance s I Size m Variance s2 Scores >=,0.05

Motives to alignment 54 42.61 34 28.13 1.52 1.94

Results of

alignment 54 19.28 34 12.00 1.61 1.94

Objectives of alignment 54 56.20 34 34.45 ·1.63 1.94

Benefits of alignment 54 111.47 34 64.62 1.72 1.94

Drawback of alignment 54 45.71 34 30.04 1.52 1.94

Corporate goals 54 14.9 1 34 8.49 1.76 1.94

Approach to strategic management 54 16.83 34 10.67 1.58 1.94

Roles of top management 54 14.87 34 10.9 1 1.36 1.94

Roles of IT management 54 11.93 34 8.49 1.41 1.94

Measuring

of strategy 54 30.60 34 16.6 1 1.84 1.94

Problems in alignment 54 36.22 34 17.52 2.07 1.94

Key success

factors 54 33.05 34 22 .77 1.45 1.94

Table 4- The perspectives of st rategic alignment in survey

Alignment Perspectives Driver Role of Top Management Role of IS Management Performance Criteri a

Strategy execution Business Strategy formulator Strategy implementor Cost/Service % centre & strategy

Technology transformati on Business % Technology visionary Technology architect leadersh ip

strategy ~ Competitiv potential IT strategy Catalyst Business leadersh ip

Service Level IT strategy Executive % Customer sat isfact ion leadership &

% rcpresents IT managers' choices in survey & represents business managers' choices in survey


and IT managers and their performance measurement criteria accord with the Strategic Execution perspective. This implies a somewhat confused view of what they would like to be doing compared to the way in which they appear to implement this. Perhaps the most remarkable finding is the consistency of such confusion! Applying the Henderson and Venkatraman's strategic alignment model, the findings are as follows :

Convergence of views in eleven out of twelve hypotheses This would imply that IT and business managers have similar perceptions with regard to the drivers, need for, and appreciation of alignment principles between business and IT strategies.

A divergence of view in hypothesis 11 where they perceive different problems in implementing the alignment of business and IT strategies

This would imply that if the problems are seen to be different, then the issues would also be different and so perhaps the Henderson and Venkatraman, 1989 model does not identify those issues which are as relevant in a practical sense as they are perceived to be in the theoretical model. This would suggest further empirical testing of the variables in the perspective alignment model.

A consistent pattern of strategic alignment which represented a mix of perspectives and drivers

This lends support to the argument that the theoretical view (i.e. the perspective we would like to believe we adopt) is not supported by the practical implementation (i.e. how we actually perceive and measure our roles). This again suggests that further research is required.

To explore these issues further, an in-depth case analysis was performed on the container terminal operator industry (CTOs) since these were found to represent a very successful case of strategic alignment.

Case Studies on Container Terminal Operators (CTOs)

Based on the feedback results of the survey, it was decided to focus on the container and shipping industry for the subsequent case studies since this industry is of paramount importance to the Hong Kong (HK) economy .. The port of HK is the world's number one container port with a reported TEU (20-ft Equivalent

Units, a more precise way of measuring cargo stock on container ship than by tonnage) greater than any other port in the world (II million in 1995), yet occupying the smallest space.

The environment that HK container ports operate in is indeed unique. Unlike other major ports in the world, there are no railway links or airport links. Surrounded by a densely populated residential area, the Kwai Chung container port has very little space, if any, to expand to cater for increasing trade that comes through to the territory. Four companies currently operate the terminals at Kwai Chung Container Port. They are Hong Kong International Terminals Ltd (HIT), Modern Terminal Ltd (MTL), Sea-Land Orient Terminals Ltd and COS COHIT Terminals (Hong Kong) Ltd (CHT). For air cargo transportation, Hong Kong Air Cargo Terminal s Ltd (HKACTL) is the only service provider.

Answers to the survey were received from HIT, MTL and HKACTL. As HKACTL could be considered to have rather different strategies as the sole provider of such services for air freight , it was decided to perform detailed studies on HIT and MTL as container port operators for sea transport. HIT holds the title of the biggest volume independent container terminal operator worldwide. This company handled over 3.5 million TEU in 1993, almost double that of its nearest rival. MTL handled 1.7 million TEU whereas Sea-Land processed 0.7 million TEU. Since HIT and MTL occupy nearly 90 percent of the total market share, an in-depth case study was conducted on these two firms .

The perspectives of IT and business management on strategic alignment in CTOs are summarized in Table 5. Once again there is remarkable covergence of views between the two management groups with the only divergence in the measurement of strategy execution. The IT managers take the Competitive Potential perspective and emphasize "Business Leadership" whereas the business managers take the Service Level perspective and focus on "Customer Satisfaction" as vital performance criterion. Both groups have consensus on all the other perspectives . They adopt the Technolog y Transformation perspective with Business Strategy as the driver for strategic alignment and Technology Visionary as the role for top management. The role of IS management, on the other hand, is as a catalyst who identifies trends in IT to help business managers to understand the potential opportunities and threats for the company, the Competitive Potential perspective . This impli es an


Table 5 - The perspectives of st rateg ic ali gnment in CTOs

A I i gnillent Perspeciives Driver Role of Top Management Role of IS Managcment Performance Criteria

Strategy executi on Business Strategy formulator Strategy implementor Cost/Service centre

strategy

Technology transformat ion Business * Technology * visionary # Technology architect Technology leadership

strategy #

Competit ive potenti al IT strategy Business visionary Catalyst * # Business * leadership

Service Level IT strategy Prioritizer Executi ve leaders hip Customer # sati sfaction

Table 6 - The compari son of perspectives of strategic ali gnment for all rcspondents against CTOs

Alignment Perspectives Driver Rol e of Top Management Role of IS Management Performance Criteria

Strategy execution Business strategy Strategy formulator Strategy implementor Cost/Servi ce % centre &

Technology transformation Business * % strategy# & Technology * visionary # Technology architect Technology leadership

Competi ti ve potenti al IT strategy Business visionary Catalys t * # Business* leadership

Service Level IT strategy PrioritizeI' % & Executi ve % Customer # sati sfac tion

leadership &

* represents IT managers' choices in CTOs; # represents business managers' choices in CTOs % represents IT managers's choices in survey; & represents business managers ' choices in survey

overall consensus on external strategic integration with IT and Business strategy going hand in hand but the functional integration at a more supportive leve l which balances competiti ve advantage with customer service.

In Table 6, the research findings are consolidated from the general survey with CTOs. The results show clear differences between the two groups.

In the general survey the role of top management falls in the service level perspecti ve. Top management is the "Prioritizer" who must find the best way to allocate the resources within the organization. The role of top man agem ent fo r CTOs, howeve r, is "Tec hnol ogy Visionary" because th ey depend heav il y on IT for organization growth . If their computer system is down, they cannot prov ide services any more . The role of IS management in the survey falls within the service leve l perspective. They lead the IT function to achieve the strateg ic goals of top management. Hence, they provide "Executive Leadership" to the finn. In CTOs, on the contrary, the role of IS management takes a competiti ve

potential pe rspec tive and IT peopl e are act in g as "Catalyst". From the interviews it was found that IS management in CTOs have formal mechanisms to coordinate with top management in order to adopt the lates t information tec hn o logies into th e ir daily operations. The ir paramount reasons in a practical sense are shorter queuing time for the driver, better util izat ion of yard space as well as hi gher efficiency in contai ner movement. All these will improve servi ces to customers and generate time and cost savings which will then derive more business for them . For CTOs, the competitive advantages in the container industry are d irectl y re lated to the degree of computerization. The hi gher the degree, the greater the effici ency and productivity, in other words, the lower the costs and the greater the yields. Thi s is why IS management must continually identify the opportuniti es and threats brought about by ne w technology.

Regarding the measurement of strategy execution, "Costs/Service Centre" is the most important concern


in the general survey. For CTOs, "Business Leadership" and "Customer Sati sfa cti on" are the ir most vital consideration. This reflects the huge investment in IT necessary to be the leader in the container business and provide maximum customer satisfaction. For example, all container port operators have developed their own EDI systems to link up with shipping companies (Taylor David , 1994). Such sys tems provid e them with competitive advantage as well as attracting more customers and helping to retain ex isting ones with better servIces.

Conclusions From the statistical tests, one can conclude that there

was no significant difference in the perspectives of business and IT managers with regard to strategic alignment. The one sli ght difference was in the area of problems of alignment :

(I) Both groups indicate that "Business Strategy" is the driver for strategic alignment, that is, to implement chosen business strateg ies through appropriate IT strategies .

(2) Both g roups think that th e rol e of top management should be "Prioritizer", that is, to find the best way to allocate the resources within the organization.

(3) Both groups think that the role ofIS management should be "Executive Leadership", that is , to lead the IT function to achi eve the strategic goals of top management.

(4) Both groups think that the performance criteria for strategy execution should be based on "Cost/Service Centre", that is , to measure costs and benefits.

These perspectives, however, have to be matched with the perspecti ves which were held in regard to the success of strategic alignment within organisations. Only 50 percent of the business managers and 60 percent of the IS managers indicated that the matching of business and IT strategies in their companies was either successful or highly successful. Whil e few indicated that they had a failure in linking business and IT strategies, there were still several in the "better than not doing anything at all " group. The key success factors in business and IT strategy linkage (Hypothesis 12) were identified as :

• top management selection of appropriate alignment approach to accomplish business objectives (40 percent in IT managers group, 35 percent in business managers group)

• matching the internal IS with external market (2 1 percent in IT managers group , 26 percent in business managers group). When a selected group of "highly successful" organisations was examined, the patte rn of perspective alignment was quite different. This could suggest that:

• to be successful innovators or exploiters of IT, the management need to have a focus on di fferent Issues.

• becoming successful through application of IT changes the view of both IT and business managers.

In the CTO case analysis , it was found th at all companies (3) saw future strategy be ing tota ll y technology dependant and the No 2 and No 3 (company No I, Hong Kong Terminals Ltd is the largest CTO in the world) felt driven to change their emphasis to th 'll adopted by the leaders and concentrate on techn ology transformation and competitive potential . They had to realign not merely their IT strategy but also their busi ness strategy and to maintain close alignment between the two. To accomplish innovation through IT, they will need to continually re- assess th e important and problematic issues for effective IS exploitation and to radically rethink the roles of top management and IT management in line with the technology transform ati on and the competitive potential perspective.

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Janice Burn is Foundation Professor of MIS at Edi th Cowan Uni versi ty, Perth , Western Australi a. She previous ly held posts in the UK, Canada and Hong Kong. He r research interests relate to st rategies for change in global IS and cross-cultural IS acceptance and diffusion. Her current research examines change strategies for the on-line organi sation and eva luation of failures and success.

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