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

The touch of Information Technology substructure Flexibility on strategical bond and Applications Implementation Sock H. Chung Department of Computer Information Systems College of Business easterly Michigan University Ypsilanti, MI 48197 sock. emailprotected emich. edu R. Kelly Rainer, Jr. ** Department of Management College of Business chromatic University Auburn, Alabama 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 motive Kelly RainerThe Impact of Information Technology Infrastructure Flexibility on Strategic Alignment and Applications Implementation Abstract IT groundwork flexibility is now organism viewed as an boldnessal eye competency that is necessary for administrations to survive and thrive in rapidly-changing, competitive, bloodline environments. Utilizing data from 200 U. S. and Canadian companies, this try clears the affect of the cardinal functions of IT stem flexibility (compatibility, connectivity, modularity, and IT personnel) on strategic IT- work conglutination and the issue of applications capital punishment within an organization.The findings from analysis of a structural model leave behind evidence that connectivity, modularity, and IT personnel nurture significant, positive impacts on strategic alignment and that all four components have significant, positive impacts on the extent of applications implementation. The get a line reinforces the importance of IT alkali flexibility to organizations as one source for sustain equal competitive advantage. Key Words IT basis flexibility, strategic IT-business alignment I. accounting entryIn the early 1990s, Johnson & Johnson faced brand-new business pressures when large customers, such(prenominal) as Wal-Mart and K-mart, made new demands on the fraternity, such as embody savings and just-in- beat stock replenishment. Johnso n & Johnsons business and IT managers acted in partnership to soften a new set of learning engine room (IT) stem capabilities which modifyd the company to provide the necessary go for its large customers while at the analogous clip reducing costs at Johnson & Johnson Weill & Broadbent, 1998. In the late 1990s, Charles Schwab rivet on delivering customized information to its investors in a timely manner.Using the companys IT bag and applications aligned with its business focus, Schwab became a full service brokerage cockeyed. The firm was able to provide information and process transactions in come across 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 two examples demonstrate that an organizations IT al-Qaida can provide tangible benefits and a continuity of business practices Kettinger, Grover, Subanish, & Segars, 1994.A particularly important ch aracteristic of IT infrastructure is flexibility Byrd & food turner, 2000. Researchers have stated that IT infrastructure flexibility should be viewed as an organisational subject matter competency and that IT infrastructure flexibility is necessary to handle change magnitude customer demands with step up increased costs Davenport & Linder, 1994 Weill, 1993. As we discuss next in ontogeny the theoretical framework for our study, two important aspects of IT infrastructure flexibility even up out from previous research the lens nucleus 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 between IT infrastructure flexibility and the extent of applications implementation in the organization and the relationship between IT infrastructure flexibility and strategic IT-business alignment. II. theoretic FRAMEWORK We develop our theoretical framework by first reviewing definitions of IT infrastructure and its components.We then define the concept of IT infrastructure flexibility and its relationship to strategic IT-business alignment and to applications implementation in the organization. Information Technology Infrastructure The theme 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 technology components to encourage business needs but the IT infrastructure concept is more complicated. The definition of IT infrastructure encompasses a variant of components.Based on previous studies, Duncan 1995 stated that IT infrastructure includes a group of divided up, tangible IT resources that provide a grounding to enable present and future business applications Broadbent & Weill, 1997 Davenport & Linder, 1994 Earl, 1989 Keen, 1991 McKay & Brockway, 1989 Niederman, Brancheau, & Wetherbe, 1991 Weill, 1993. These resources include (1) computer hardwargon and packet (e. g. , operating systems) (2) network and tele communication theory technologies (3) key data (4) core data-processing applications 5) ploughshared IT services. Duncan 1995 in addition 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 noned that IT infrastructure capabilities enable the various types of IT applications necessary to support current and future business objectives, and enable the competitive positioning of business initiatives. McKay and Brockway 1989 described IT infrastructure as the enable mental institution of shared IT capabilities upon which the entire business depends.This foundation is standardized and s hared by business functions within the organization, and typically applyd by diametric organisational 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 charitable component of skills, expertise, competencies, commitments, values, norms, and knowledge 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 piece IT infrastructure. The technical infrastructure consists of the applications, data, and technology Broadbent & Weill, 1997 Broadbent, Weill, OBrien & Neo, 1996 Henderson & Venkatraman, 1993.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 respective jobs, both from having the available technology and the necessary technological skills. Information Technology Infrastructure Flexibility Early work on IT infrastructure flexibility described the concept without actually defining it.Weill 1993 insist that an IT infrastructure should be supple 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 tractile and robust. Duncan 1995 observed that one organizations IT infrastructure may enable strateg ic 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 span organizational boundaries, empower employees, and make data, informa tion, 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 similarly 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 degree 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 readil y diffuse or support a wide variety of hardware, 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 bear a rapidly changing business environment Byrd & Turner, 2001. This flexibility enables businesses to in effect 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 tested. We test these relationships through our abstract model. III. CONCEPTUAL MODEL IT Infrastructure Flexibility and Strategic 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 every 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 explanation 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 this discussion, we propose the following venture possibility 1 Each component of an organizations IT infrastructure flexibility result positively affect the organizations strategic IT-business alignment. IT Infrastructure Flexibility and Applications Implementation Today, IT applications not solo 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 harvest-festival and service quality and to integrate supplier and customer operations Luftman, Lewis, & Oldach, 1993. several(prenominal) studies have included business applications as part of IT infrastructure see e. . , Broadbent & Weill, 1997 Byrd & Turner, 2000 Duncan, 1995. Duncan 1995 communicate business applicat ions when she asserted that IT infrastructure flexibility enabled organizations to build applications that more virtually 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 E ach 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