Alignment of IT and business strategies in small and medium-size enterprises in the Eastern Cape Province.

Abstract

In today’s business environment, leveraging Information Technology (IT) is of key importance as it helps organisations improve their performance. However, to achieve this, companies must ensure that their IT and business strategies are aligned. The fundamental goal of aligning IT and business strategies is to ensure that IT capability supports, enables and leads business strategy where appropriate. Alignment explains the degree to which the business plans, goals, and mission support, or are supported by their IT complements (Reich & Benbasat, 1996; Walter, Kellermanns, Floyd, Veiga, & Matherne, 2013). In this, alignment develops into a relationship where business and IT functions adjust their strategies simultaneously. Such alignment can improve business performance. Importantly, large amounts of research conducted in this area focus on large organisations, particularly in developed countries. Yet little is known about the subject in SMEs especially in developing countries. This study investigates the alignment of IT and business strategies in SMEs in the Eastern Cape Province. A survey methodology was employed to collect data, with a questionnaire as a tool. Forty-two questions developed from four main questions: the state of communication, the state of IT metrics, the state of IT business planning, and the state of alignment practices. According to data obtained from the Border-Kei Chamber, at the time of data collection, there were one hundred and seventy-three SMEs registered with the organisation. However, from that population, one hundred and twenty-eight questionnaires were filled, returned and analysed. The results showed significant agreement that there is communication between IT and business strategies in SMEs, on Metrics and on IT Business planning. However, pertaining the use of alignment models and alignment practises, there was a significant disagreement. The study recommends that SMEs should create platforms to educate IT personnel about the business; more work on value metric is required. Participation of IT in business strategic planning should be encouraged. It is recommended that SMEs look into alignment model/s that can be used to support how IT planning/ investment, managing and governance of IT is done.