Operational Alignment Framework for Improving Business

Performance of an Organisation

Jakkapun Kwanroengjai

, Kecheng Liu

1,2

, Chekfoung Tan

and Lily Sun

Informatics Research Centre, University of Reading, Whiteknights, RG6 6UD, Reading, U.K.

School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai, China

School of Systems Engineering, University of Reading, Whiteknights, RG6 6AY, Reading, U.K.

Keywords: Operational Alignment, Business-IT Alignment, Socio-technical Approach, Organisational Semiotics,

Alignment Assessment, Healthcare.

Abstract: Business strategies are vital for an organisation in the dynamic business environment today. However, most

organisations are still facing issues in effectively executing the business strategies. The misalignment of

operational factors such people, business operations, and IT systems, is one major problem that hinders the

best performance of an organisation and degrades the value of business strategies. Therefore, this paper

aims to produce an operational alignment framework, in order to ensure the business and IT components are

operationally aligned. It contains a set of operational alignment components and its assessment methods. An

operational alignment map is produced to identify the root cause of the alignment issues in an organisation.

A case study in a Thai University Healthcare Centre is used for validating the operational alignment

framework.

1 INTRODUCTION

Business and IT alignment is vital to the IT-centric

business today. It aims to drive business more

effectively with the use of IT (Henderson and

Venkatraman, 1993). The early motivation of the

business-IT alignment study focuses on the strategic

business planning and long-term IT planning (Chan

and Reich, 2007). Today, the study focus has shifted

to the efficiency, effectiveness and adaptability of IT

to support business strategies of an organisation due

to the dynamic business environment (Silvius,

2007). Strategic alignment is introduced in order to

assist organisations for aligning their business

strategies to the IT strategies. In a contrary, the

research on operational alignment is scarce.

Operational alignment is important as it determines

the success of executing the predefined business and

IT strategies of an organisation.

Therefore, the aim of this paper is to develop an

operational alignment framework that enhances the

business-IT alignment of an organisation from the

operational perspective. This framework is stemmed

from the operational perspective of the business-IT

alignment framework. It is used to examine and

evaluate the identified operational alignment factors

such as business strategy, business operations,

information technology, and people. In addition, it

shows the relationship between these factors and

provides a method to identify the root cause of

operational alignment problem in an organisation.

This paper is structured as follows: Section 2

discusses the research work in relation to the

development of the operational alignment

framework (OAF). Section 3 describes the design of

OAF. Section 4 narrates the application of OAF in a

chosen case. Section 5 discusses OAF from the

empirical perspective with comparing to other

relevant framework and concludes the paper with

future work.

2 RELATED WORK

2.1 Business-IT Alignment

Business-IT alignment is the degree to which the

information technology mission, objectives, and

plans support and are supported by the business

mission, objectives, and plans (Reich and Benbasat,

1996). Most research in the business-IT alignment

352

Kwanroengjai J., Liu K., Tan C. and Sun L..

Operational Alignment Framework for Improving Business Performance of an Organisation.

DOI: 10.5220/0004886203520359

In Proceedings of the 16th International Conference on Enterprise Information Systems (ICEIS-2014), pages 352-359

ISBN: 978-989-758-029-1

 2014 SCITEPRESS (Science and Technology Publications, Lda.)

focuses on the strategic level and functional level

(Aversano et al., 2013). The strategic level

alignment concerns if organisation’s goals, activities

and processes are in harmony with the information

systems that support them. Jabbari Sabegh and

Motlagh (2012) conclude that IT resource

management, performance management, knowledge

sharing, IT architecture and IT infrastructure are the

five aspects contributing to the strategic alignment.

On the other hand, the functional alignment focuses

on optimizing the effectiveness of IT systems

supporting business processes. The functional or

operational alignment is equally important as it is

one of key success factors of business-IT alignment

for an organisation. Baker and Niederman (2013)

discover that one of the key failures in mergers and

acquisitions is the misalignment at the operational

level. Henderson and Venkatraman (1993) propose

a strategic alignment model (SAM) in which there

are four areas, aligning with each other in two

dimensions, the strategic fit and functional

integration. The strategic fit is the alignment

between external and internal domains. The external

domain concerns about external factors that

influence the organisation such as economy, market

trend, competitors, regulations, and technologies.

The internal domain focuses on operational factors

in an organisation such as organisational structure,

business processes, business functions and

information technology. Functional integration is the

unification of the organisational functions and IT

functions.

It is vital to understand what business and

information systems alignment is and how to obtain

and maintain the alignment, but at the same time not

neglecting how to correct the misalignment

(Carvalho and Sousa, 2008, Pereira and Sousa,

2003). Aversano et al. (2013) suggest three aspects

for business-IT alignment: modelling, alignment

evaluation and evolution execution. The business-IT

alignment should have at least one of these aspects

in order to ensure that it is useful and applicable.

Modelling defines various alignment entities and

relationship between business and IT in order to

achieve the best alignment in an organisation. The

alignment evaluation aspect targets on assessing the

level of alignment between business and IT. The

third aspect, evolution execution is to improve the

degree of alignment in the case that the level of

alignment does not satisfy the needs of an

organisation. According to Aversano et al., (2012),

this aspect is still open for further research.

2.2 Organisational and Process

Alignment

Organisational alignment is the alignment that looks

at the extent to which strategy, structure, and culture

for creating the environment that facilitates the

achievement of organisational goals (Sender, 1997).

This alignment helps an organisation to create an

efficient internal environment to achieve better

cooperation and performance by removing internal

obstacles. Kathuria et al. (2007) define two types of

organisational alignments: vertical and horizontal

alignment. Vertical alignment refers to the alignment

of business strategies from a management level then

cascaded to other organisational departments.

Horizontal alignment refers to the cross-

departmental or intra-departmental integration.

The purpose of process alignment is to ensure the

harmonisation of various processes and activities in

an organisation to work in order to achieve common

goals (Weiser, 2000). Process alignment consists of

three dimensions of alignment (Hung et al., 2010):

1) structural alignment, 2) strategic alignment and,

3) IT alignment. Structural alignment aims to

organise responsibilities and to provide linkages

between business units or departments so that the

employees can cooperate with each other coherently

(Daft, 2000). Strategic alignment is about external-

internal alignment. IT alignment is the integration of

business functions with IT systems. IT systems must

be carefully integrated with the operational

processes within an organisation in order to make

the best performance in an organisation (Gagnon and

Dragon, 1998).

2.3 Organisational Operating Model

An organisational operating model is the necessary

level of business process integration and

standardisation for delivery goods and services to

customers (Ross et al., 2006). Different companies

have different degrees of process integration and

process standardisation that suits their organisational

operating model. The organisational operating

model is a matrix of two dimensions: business

process integration and business process

standardization. The aim of process integration is to

share information across business units in order to

increase efficiency and collaboration. Process

standardisation produces the same outcome from a

particular process in regardless of who is performing

it and where it is completed.

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2.4 Socio-technical Alignment

Socio-technical alignment is the social dimension of

business-IT alignment which emphasises the

integration of human factors in the alignment

mechanism (Lee et al., 2008). The aim of socio-

technical approach is to explain how the functional

integration in the business-IT alignment process is

accomplished in a collaborative environment.

Organisational onion can be adopted in studying

socio-technical alignment of an organisation. It

studies an organisation in three layers such as the

informal, formal, and technical layer (Liu, 2000).

The informal layer reflects the human aspect in an

organisation such as culture, values, beliefs, and

behaviour of individuals. The formal layer signifies

the tangible aspects of an organisation such as

business rules, organisation structure, bureaucracy,

business activities and processes. The technical layer

refers to IT systems that help automate the business

activities from the formal layer.

The People Capability Maturity Model (PCMM)

is a tool that contributes to the social perspective of

the socio-technical alignment (Curtis et al., 2009). It

helps an organisation to identify the critical people

issues in organisation’s workforce. In order to

measure the level of the maturity, Lu et al. (2010)

have developed a set of measurement scales to

assess the degree of maturity. A greater human

involvement in the alignment strategies will help in

improving the overall performance of an

organisation (Zarrabi and Vahedi, 2012).

3 THE OPERATIONAL

ALIGNMENT FRAMEWORK

The Operational Alignment Framework (OAF) is the

framework for aligning organisational components

such as business strategy, business operations,

people, and IT in an operational manner. Figure 1

shows the design of OAF. It considers four main

aspects of the alignment: 1) strategic fit, 2) people

involved, 3) infrastructure-process fit and, 4)

functional integration. Strategic fit (or strategic

alignment) is the extent of which strategy from

management to be implemented in the operational

level such as business processes and activities. The

people alignment is the capability of the staff in

performing business operations. OAF adapts PCMM

in assessing the staff proficiency in performing their

day-to-day business activities. Socio-technical

alignment is employed to assess the aspect of people

and IT in an organisation. Infrastructure-process fit

is to assess the extent of how organisational

structure supports the business processes.

Organisational alignment is adapted to assess the

coherence between organisational structure and

business strategy. The organisational operating

model defines the way an organisation runs its

business. It is considered together with the process

alignment in order to estimate the level of cohesion

between organisational structure and business

processes that contributes to the organisational

performance. Functional integration (or IT

alignment) is the degree of IT systems in supporting

the organisation processes and activities.

There are two alignment assessments in OAF: 1)

the operational alignment assessment and, 2) the

organisational process alignment assessment. The

Figure 1: The Operational Alignment Framework.

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respondents will be asked to rate each question

ranging from 1 “strongly disagree” to 5 “strongly

agree”. Table 1 interprets the level of alignment

based on the score obtained.

Table 1: Level of alignment.

Score Level of alignment

< 3 Low

≥ 3 and ≤ 4 Medium

 4 High

3.1 The Operational Alignment

Assessment

This assessment aims to evaluate the alignment

among operational alignment factors such as the

business strategy, business operations, people, and

IT factors in an organisation. Figure 2 depicts the

OAF components involved in this assessment. The

components are the strategic alignment (SA), IT

alignment (ITA), people capability maturity (PCM),

and socio-technical alignment (STA). Table 2

presents the operational alignment assessment

questions. The operational alignment value (OAV) is

the average score of SA, ITA, PCM, and STA as

shown in Equation 1.





ITA



PCM



STA



(1)

Figure 2: Alignment measurements in the framework.

3.2 Organisational Process Alignment

Assessment

This assessment aims to assess the infrastructure-

process alignment. It assesses the organisational

alignment and process alignment. The organisational

process alignment value (ORPAV) can be computed

by Equation 2.

ORPA



ORA

PA

(2)

It is the average score of the organisational

alignment value (ORAV) and process alignment

value (PAV). Table 3 shows organisational process

alignment assessment questions. The process

integration alignment value (PIAV) and process

standardisation assessment value (PSAV) are the

supplementary alignment of PAV. PIAV is adopted

by unification or coordination type of organisation

that has high level of process integration. PSAV is

employed for the replication and unification type of

organisation that has high level of process

standardisation.

3.3 Alignment Analysis and

Interpretation

The OAF produces a set of alignment outcomes.

This includes the OAV that considers the SA, ITA,

PCM and STA, and the ORPAV that considers the

ORAV and PAV. These values form the operational

alignment map as shown in Figure 3. It contributes

to the root cause identification of the alignment

issues in an organisation.

The operational alignment map shows the

relationship among alignments in an organisation.

For example, an organisation that has a low score in

ITA and STA indicates that, due to the lack of IT

skills of the staff, the IT systems are not being

optimised for enabling the business processes.

Therefore, the management should rectify this issue

by providing more training to the staff. The

mechanism of applying the operational alignment

map is: 1) Incorporate all the obtained values (SA,

SA, ORPAV, PCM, STA, ITA, ORAV, PAV, PIAV,

and PSAV) in the operational alignment map, 2)

start with the alignment component that is on the

association line and has the lowest value, the value

should not be more than three, 3) move to the next

alignment component that is on the association line

with the lower score, 4) in the case where the

alignment path hits ORPAV, step two and three will

be adopted, but the both derivation paths that

connect to PIAV and PSAV will be considered. Both

PIAV and PSAV will be considered when the values

are low, in this case, it is set at 0.5 and, 5) the

alignment components which identified in the

alignment path are the key alignment factors that

impact the operational alignment of an organisation

the most. The prior alignment component on the

Figure 3: Operational alignment map.

People

Business operations

Information Technology

IT alignment

Socio-

Technical

PCM

Business Strategy

Strategic alignment

Associate with

Value derivation

OperationalAlignmentFrameworkforImprovingBusinessPerformanceofanOrganisation

355

alignment path has higher impact factor than the

later alignment component. ORPAV and PAV are

omitted from the operational alignment path.

4 APPLICATION OF OAF

4.1 The Case

A case study of applying OAF has been conducted

in a Thai University Healthcare Centre. The

healthcare centre provides free medical services for

all students, lecturers, and administrative staff in the

university. The healthcare services include medical

consultation, dental clinic, rehabilitation service, and

laboratory. The healthcare centre serves

approximately 200 to 300 patients a day. The

healthcare centre employed an IT company to

implement a healthcare system called Hospital OS

for the past six years. This system consists of several

main healthcare related functionalities such as

electronic patient record (EPR), clinic management,

and laboratory management. The system requires

frequent customisations and enhancements in order

to comply with the new services and policies

released by the university. Although the healthcare

centre has invested a huge amount of money on IT

systems in order to improve the healthcare service

quality, still the healthcare centre is receiving

constant negative feedbacks from the patients,

mainly criticising the operation of the healthcare.

The operational issues are identified and analysed by

adopting OAF. From the people perspective, it is

discovered that the IT staff have not had the

sufficient skills in maintaining the system. This

causes delay in solving the system problem

whenever it occurs. From the operational

perspective, healthcare staff still have to go through

the manual business processes. The complexity of

these business processes are growing incrementally

due to the constantly changing university policy.

This is incredibly challenging when the business

process requires collaboration from other

departments in the university. For instance, in order

to verify the identity of students, the healthcare

centre is required to make a request to the student

administrative department every week for an

updated list of expired student to in order to update

the healthcare system. This process is cumbersome

especially towards the end of the month. Staff are

required to check the record of the visit of a group of

expired students and produce a report to inform a

healthcare manager. In the IT viewpoint, the

healthcare system does not support the

aforementioned business operational activities. The

existing healthcare system is not integrated with the

student administration system in the student

department. Therefore, it is challenging to share

student information.

4.2 Alignment Assessment Result

Twelve respondents including administrative staff,

nurses, doctors, and medical practitioners are

participated in the alignment assessment. They

complete the operational alignment assessment (cf

Table 2) and the organisational process alignment

assessment (cf Table 3) through an online

questionnaire. Table 4 shows the score and the level

of alignment for each alignment components in

OAF.

According to alignment result in table 4, the

healthcare centre has a low level of operational

alignment due to the low score in both OAV and

ORPAV. Although the centre gets a good score in

the SA, other operational alignment components

such as ITA, ORPAV, and PCM are having low

scores. This lowers the overall alignment of the

healthcare centre. This shows that the healthcare

centre has good organisational strategies but faces

difficulties in realising these strategies at the

operational level. ITA has the lowest score out of all

operational alignment components. Hence, ITA is

considered as the major alignment issue in the

healthcare centre. This implies that the healthcare

system is not able to fully support the business

operations. The healthcare has a low level of

organisational process alignment (ORPAV). This

indicates that the organisational structure of the

healthcare centre does not support the organisational

processes well. When considering ITA together with

ORPAV, it indicates that the healthcare system is

not supporting the organisational processes. For

example, the manual process is employed in

identifying student identity. In addition, the low

PCM alignment indicates that the staff in the

healthcare centre do not have the necessary skills

and knowledge to perform their tasks adequately.

For example, the IT staff do not have sufficient

skills and knowledge in solving the system issues

and maintaining the system.

4.3 Operational Alignment Map

Figure 4 shows the operational alignment map of the

university healthcare centre. Each score of the

operational alignment components are incorporated

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Table 2: Operational alignment assessment questions.

Strategic alignment (SA) (adapted from Hung et al., 2010)

SA1: Corporate strategies are developed based on customer needs

SA2: Core business processes are incorporated in the strategic plan

SA3: Operational improvement has direct impact on executing corporate strategies

SA4: There are sufficient measures in tracking of organisation performance

SA5: The existing strategic plan is executed well

IT alignment (ITA) (adapted from Hung et al., 2010)

ITA1: Those IT enabled business processes are performing well

ITA2: The adopted IT systems are well acknowledged ITA3: IT systems are vital in improving business processes

efficiency

ITA4: IT systems are well integrated across business units

People capability maturity (PCM) (adapted from Lu et al., 2010)

PCM1: Staff recruitment contains a set of normative criterion

PCM2: Staff are allowed to raise their opinions on organisational policy and work condition

PCM: Staff are equipped with the sufficient skills in performing the job

PCM4: Organisation provides sufficient resources in assisting staff in performing the job

PCM5 - Organisation provides sufficient training for staff

Socio-technical alignment (STA) (adapted from Lee et al., 2008)

STA1: Both operational and IT staff have great confidence in each other.

STA2: Both operational and IT staff share the equal benefits when working together

STA3: Both operational and IT staff achieve high level of teamwork

STA4: Both operational and IT staff always motivate each other to maintain the team synergy

STA5: Both operational and IT staff communicate frequently

Table 3: Organisational process alignment questions.

Organisational alignment (OA) (adapted from Powell, 1992)

OA1: Written budgets are clear

OA2: There is frequent staff performance appraisal

OA3: Reports are generated to benchmark the performance towards organisational goals

OA4: Asset management is good

OA5: The cost accounting system is good

OA6: There are standardised procurement procedures

OA7: The salary review and promotion procedures are standardised

OA8: There is an official management training

OA9: There are cross departmental planning and decision making committees

OA10: There are temporary teams or cross departmental resources collaboration in executing a specific project

OA11: There are regular meetings cross departmental management meetings on key organisational policy

OA12 : There is a designated person in managing the cross departmental collaboration

Process alignment (PA) (adapted from Hung et al., 2010)

PA1: There are collaboration barriers between departments

PA2: There are designated business process teams

PA3: The cross departmental teams have higher authority in making day-to-day decisions than the departmental

PA4: Customer are satisfied with response time

PA5: The front-line tasks are delegated well

in the operational alignment map. The operational

alignment path is identified. The path starts from

ITA (1.60), which has the lowest score among all the

alignment components. It is then moved to ORPAV

(2.75), which ITA is connected to. Finally, it is

moved to PCM (2.22). PCM has a lower score

comparing to other alignment components (ORAV

and PAV) in which OPRAV is connected to. In

addition, the ORPAV can be analysed further to find

the root cause of the misalignment of the

organisational processes. The alignment path of

ORPAV is then starting from PAV, which has a

lower score (2.68) in comparison to ORAV (2.81).

Same applies to the comparison of PIAV and PSAV.

Therefore, the final operational alignment path starts

from ITA, follows by PIAV and PCM. Hence, the

healthcare centre should consider these three factors

to improve its operational alignment. For example,

the relationship between ITA and PIAV indicates

that the healthcare centre should improve integration

of the existing healthcare system with other IT

systems. This will enhance the information sharing

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357

Table 4: The score of each alignment component.

Alignment components Scores Level of

alignment

Operational Alignment

Value (OAV)

2.59

Low

Strategic alignment (SA)

IT alignment (ITA)

People capability maturity

(PCM)

Socio-Technical alignment

(STA)

3.75

1.60

2.22

2.78

Medium

Low

Organisational Process

Alignment (ORPAV)

2.75

Low

Organisational alignment

(ORAV)

Process alignment (PAV)

2.81

2.68

Low

within the healthcare centre and other departments in

the university. Similarly, the relationship between

ORPAV and PCM denotes that staff training in

increasing their IT skills is important to improve the

overall performance of the healthcare centre.

Figure 4: The operational alignment map of the healthcare

centre.

5 DISCUSSION AND

CONCLUSION

This paper has developed an operational alignment

framework (OAF) that aims to enhance the business-

IT alignment from the operational perspective. OAF

can be employed to investigate and evaluate the

alignment of the operational factors such as business

strategy, business operations, people, and IT. OAF is

developed by integrating the concept of strategic

alignment, organisational processes, IT alignment

and people alignment. OAF fulfils the three aspects

(modelling, alignment evaluation and evolution

execution) of business-IT alignment suggested by

Aversano et al. (2013). From the modelling

perspective, it provides a set of components that

contributes to the operational alignment. The

alignment evaluation aspect is satisfied with the set

of alignment assessment questions based on the

operational alignment components in OAF. The

components are categorised into the organisational

process alignment and operational alignment.

Organisations can adapt and adjust the alignment

assessment questions within each operational

alignment component based on their business needs.

The evolution execution factor is fulfilled by the

operational alignment map, a technique in OAF for

examining the operational alignment issues in an

organisation. It shows the relationship between the

operational alignment components. It also indicates

the operational alignment path that identifies the root

cause of the operational alignment issues within an

organisation. The operational alignment map can

be used as a preliminary tool to improve the

operational alignment in an organisation. The

applicability of OAF is proven in the case study

illustrated in section 4.

One of the key strengths of OAF is it provides a

holistic view of the alignment in an organisation

from the strategic level to operational level. In

addition, OAF incorporates the three aspects of

business-IT alignment such as modelling, alignment

evaluation, and evolution execution. This makes

OAF different from other approaches that usually

focus on a particular aspect. Although one may get

an insight of a particular area when focussing in one

particular aspect, it is still challenging for

practitioners to adopt the framework in the real

situation. For example, the alignment framework

such as SAM offers a conceptual perspective of

alignment, but it is not advising the implementation

techniques. The benefit of integrating these three

aspects is to increase the practicality of the

framework. As illustrated in section 4, OAF helps

the healthcare centre to understand and examine the

level of alignment of the existing alignment by the

assessment questions. It identifies the root cause of

misalignment through the assessment result, and

improves the alignment via the alignment map.

Another advantage of OAF is it incorporates the

people dimension. The capability and adaptability of

staff to changes brought by alignment is vital to the

success of any alignment implementations (adapted

from Zarrabi and Vahedi, 2012). This enhances the

people dimension of the existing alignment

frameworks, including SAM in analysing human

related issues in an organisation.

As for future work, the derivation of the

assessment value and the relationship between

operational alignment components will be improved.

In addition, more case studies across various

industrial sectors will be conducted in order to

improve the validity of these two aspects. The

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assessment questions will be improved in order to

increase the generalisability of OAF. A technical

prototype of OAF will be produced towards the end.

This will help the end users in entering the

calculating the scores of each operational alignment

component.

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