The Impact of Information Technology Infrastructure Flexibility on Strategic Alignment and Applications Implementation

The Impact of nurture engine room floor Flexibility on Strategic Alignment and Applications Implementation Sock H. Chung Department of Computer Information Systems College of Business Eastern Michigan University Ypsilanti, MI 48197 sock. emailprotected emich. edu R. Kelly Rainer, Jr. ** Department of Management College of Business Auburn University Auburn, aluminium 36849 (334) 844-6527 emailprotected auburn. edu Bruce R. Lewis Calloway School of Business Wake Forest University Winston-Salem, NC 27109 (336) 758-7195 emailprotected edu ** Corresponding Author Kelly RainerThe Impact of Information Technology al-Qaeda Flexibility on Strategic Alignment and Applications Implementation Abstract IT basis limberness is now creation viewed as an nerveal perfume competency that is necessary for organizations to survive and prosper in rapidly-changing, agonistic, chore environments. Utilizing development from 200 U. S. and Canadian companies, this study go outs the impact of the tetrad servings of IT root word flexibleness (compatibility, connectivity, modularity, and IT force-out) on strategical IT- blood sector sector conjunction and the extent of applications carrying out within an organization.The findings from analysis of a structural model provide evidence that connectivity, modularity, and IT personnel have significant, positive impacts on strategic concurrence and that all four components have significant, positive impacts on the extent of applications implementation. The study reinforces the importance of IT al-Qaeda tract mightiness to organizations as one source for sustainable competitive advantage. Key Words IT radical tractableness, strategic IT- strain alignment I. INTRODUCTIONIn the early 1990s, Johnson & Johnson faced overbold trade pressures when large customers, such as Wal-Mart and K-mart, made new demands on the comp any, such as hail savings and just-in-time stock replenishment. Johnson & Johnsons strain and IT manag ers acted in partnership to develop a new circle of culture applied science (IT) infrastructure capabilities which enabled the company to provide the necessary helps for its large customers while at the same time reducing costs at Johnson & Johnson Weill & Broadbent, 1998. In the late 1990s, Charles Schwab focused on delivering customized training to its investors in a timely manner.Using the companys IT infrastructure and applications aligned with its business focus, Schwab became a full service brokerage firm. The firm was able to provide information and process transactions in meeting its business objectives. Customers could retrieve stock quotes and place orders via Schwabs Web site. As a result, the corporation continues to be an industry leader. These both examples demonstrate that an organizations IT infrastructure can provide tangible benefits and a continuity of business practices Kettinger, Grover, Subanish, & Segars, 1994.A particularly important characteristic of I T infrastructure is flexibility Byrd & Turner, 2000. Researchers have express that IT infrastructure flexibility should be viewed as an organizational internality competency and that IT infrastructure flexibility is necessary to handle change magnitude customer demands without increased costs Davenport & Linder, 1994 Weill, 1993. As we discuss next in developing the theoretical role model for our study, two important aspects of IT infrastructure flexibility emerge from previous research the core business applications of an organization and the strategic IT-business alignment.That is, an organizations IT infrastructure flexibility should be reflected in its implementation of core business applications and the extent of its strategic IT-business alignment. Therefore, the purpose of this study is to empirically examine the relationship in the midst of IT infrastructure flexibility and the extent of applications implementation in the organization and the relationship between IT infr astructure flexibility and strategic IT-business alignment. II. theory-based FRAMEWORK We develop our theoretical framework by first reviewing explanations of IT infrastructure and its components.We then define the conception of IT infrastructure flexibility and its relationship to strategic IT-business alignment and to applications implementation in the organization. Information Technology Infrastructure The topic of IT infrastructure has been a key issue for both researchers and practicing managers for some time see e. g. , Brancheau, Janz, & Wetherbe, 1996. The organizations IT infrastructure basically integrates engineering components to tide over business needs but the IT infrastructure concept is more than complicated. The definition of IT infrastructure encompasses a variety of components.Based on previous studies, Duncan 1995 stated that IT infrastructure let ins a group of shared, tangible IT resources that provide a foundation to enable present and future business app lications Broadbent & Weill, 1997 Davenport & Linder, 1994 Earl, 1989 Keen, 1991 McKay & Brockway, 1989 Niederman, Brancheau, & Wetherbe, 1991 Weill, 1993. These resources include (1) computer hardware and software (e. g. , operating systems) (2) network and telecommunications technologies (3) key information (4) core data-processing applications 5) shared IT function. Duncan 1995 as well as stated that IT infrastructure includes the alignment of IT plans to business objectives, the IT architecture, and the skills of IT personnel. Broadbent and Weill 1997 noted that IT infrastructure capabilities enable the various types of IT applications required to support current and future business objectives, and enable the competitive positioning of business initiatives. McKay and Brockway 1989 described IT infrastructure as the enabling foundation of shared IT capabilities upon which the entire business depends.This foundation is standardized and shared by business functions within the or ganization, and typically used by different organizational applications. Byrd and Turner 2000, p. 172 provided a thorough definition of IT infrastructure as the shared IT resources consisting of a technical physical base of hardware, software, communications technologies, data, and core applications and a human component of skills, expertise, competencies, commitments, values, norms, and companionship that combine to create IT services that are typically unique to an organization.These IT services provide a foundation for communications interchange across the entire organization and for the development and implementation of present and future business applications. As can be seen from these definitions, the IT infrastructure is composed of two components a technical IT infrastructure and a human IT infrastructure. The technical infrastructure consists of the applications, data, and technology Broadbent & Weill, 1997 Broadbent, Weill, OBrien & Neo, 1996 Henderson & Venkatraman, 19 93.The human IT infrastructure consists of the knowledge and capabilities required to manage organizational IT resources Broadbent & Weill, 1997 Lee, Trauth & Farwell, 1995. Davenport and Linder 1994 suggested that a robust IT infrastructure enables employees to be able to perform their single jobs, both from having the available technology and the necessary technological skills. Information Technology Infrastructure Flexibility primordial work on IT infrastructure flexibility described the concept without actually defining it.Weill 1993 asserted that an IT infrastructure should be flexible to be able to handle increased customer demands without increased costs. Davenport and Linder 1994 stated that IT infrastructure flexibility should be viewed as a core competency of the organization and suggested that an effective IT infrastructure is flexible and robust. Duncan 1995 observed that one organizations IT infrastructure may enable strategic innovations in business processes, while anothers IT infrastructure may limit such innovations.She referred to this characteristic as IT infrastructure flexibility and suggested that both business and IT application development capabilities reflect the flexibility of infrastructure components. She suggested that infrastructure flexibility improves systems developers ability to design and build systems to meet organizational business objectives. She described IT infrastructure flexibility through the characteristics of connectivity, compatibility, and modularity. She maintained that an organization with high modularity, compatibility, and connectivity would have high technical IT infrastructure flexibility.Compatibility is the ability to share any type of information across any technology component throughout the organization Duncan, 1995 Keen, 1991. Tapscott and Caston 1993 noted that IT compatibility helps hybridize organizational boundaries, empower employees, and make data, information, and knowledge readily available in the organization. Connectivity is the ability of any technology component to communicate with any of the other components inside and outside of the organizational environment Duncan, 1995.Tapscott and Caston 1993 emphasized that IT connectivity enables seamless and transparent organizations that are independent of time and space. Connectivity facilitates the sharability of IT resources at the platform level. Modularity is the ability to easily reconfigure (add, modify, or remove) technology components Duncan, 1995. She also stated that modularity is the standardization of business processes for sharability and reusability (e. g. , structured programming and component-based software architectures).Schilling 2000 suggested that modularity is a continuum describing the head to which a systems components can be separated and recombined. Byrd and Turner 2000, p. 172 defined IT infrastructure flexibility as the ability to easily and readily mete out or support a wide variety of har dware, software, communications technologies, data, core applications, skills and competencies, commitments, and values within the technical physical base and the human component of the existing IT infrastructure. Historically, the flexibility of the IT infrastructure has been viewed as necessary to accommodate a rapidly changing business environment Byrd & Turner, 2001. This flexibility enables businesses to efficaciously use IT to prosper in dynamic environments. The literature review points out that strategic IT-business alignment and core business applications are embedded in the definitions of IT infrastructure and IT infrastructure flexibility.However, the actual relationships between IT infrastructure flexibility and strategic IT-business alignment and between IT infrastructure flexibility and business applications have not been empirically streamleted. We test these relationships through our conceptual model. III. CONCEPTUAL MODEL IT Infrastructure Flexibility and Strategi c IT-Business Alignment Strategic IT-business alignment refers to the extent to which the IT mission, objectives, and plans support, and are supported by, the organizations mission, objectives, and plans Hirscheim & Sabherwal, 2000.This alignment creates an integrated organization in which either function, unit, and person are focused on the organizations competitiveness. Sambamurthy and Zmud 1992 suggested that IT management is a problem of aligning the relationship between the business and the IT infrastructure to take advantage of IT opportunities and capabilities. Duncan 1995 first included the alignment of IT plans to business objectives in her exposition of IT infrastructure. She continued by noting that an organizations IT infrastructure could be considered flexible if it enabled strategic innovations in business processes.Broadbent and Weill 1997 stated that IT infrastructure capabilities provide the foundation for competitive positioning of business initiatives. From thi s discussion, we propose the following assumption Hypothesis 1 Each component of an organizations IT infrastructure flexibility will positively affect the organizations strategic IT-business alignment. IT Infrastructure Flexibility and Applications Implementation Today, IT applications not only process data and provide management information reports.Corporations now use IT applications to gain competitive advantage Earl, 1989 Porter & Millar, 1985 Powell, 1992 Saunders & Jones, 1992 Smith & McKeen, 1993 to create new business opportunities Earl, 1989 Rockart & Scott-Morton, 1984 Smith & McKeen ,1993 to improve customer service to enhance product and service quality and to integrate provider and customer operations Luftman, Lewis, & Oldach, 1993. Several studies have included business applications as part of IT infrastructure see e. . , Broadbent & Weill, 1997 Byrd & Turner, 2000 Duncan, 1995. Duncan 1995 communicate business applications when she asserted that IT infrastructure fl exibility enabled organizations to build applications that more closely satisfy business objectives. Broadbent and Weill 1997 stated that IT infrastructure capabilities are the base for computer applications. Byrd and Turner 2000 noted that IT infrastructure flexibility enabled organizations to easily diffuse and supportcore applications. For this study, we use the extent to which organizations have implemented a variety of business applications to examine the concept of applications implementation. These eleven business applications in our study include transaction processing systems, management information systems, executive information systems, decision support systems, expert systems, data warehousing, data mining, interorganizational information systems (e. g. , electronic data interchange), knowledge management, network management, and disaster recovery.From this discussion, we propose the following hypothesis Hypothesis 2 Each component of an organizations IT infrastructure flexibility will positively affect the organizations extent of applications implementation. Conceptual Model This study utilizes four previously identified measures of IT infrastructure flexibility the technical components of modularity, compatibility, connectivity, and IT personnel skills see Duncan, 1995 Byrd & Turner, 2000. The conceptual model representing the relationships addressed in this study is presented in Figure 1. pic* p