Misalignment between Business and IT Strategic Objectives in Saudi

Arabia Public Sector Organisations

Abulaziz AlGhazi

, Mengxiang Li

, Tingru Cui

, Fosso Wamba Samuel

and Jun Shen

University of Wollongong, Australia-NSW, Northfields Ave, Wollongong, Australia

Hong Kong Baptist University, Baptist University Rd, Kowloon Tong, Hong Kong

Toulouse Business School, 20 Boulevard Lascrosses, 31068 Toulouse, France

s.fosso-wamba@tbs-education.fr, jshen@uow.edu.au

Keywords: IT Strategy, Business Strategy, Business and IT Alignment, Business and IT Misalignment, Public Sector,

Saudi Arabia.

Abstract: Business-IT strategy misalignment is increasingly an important area of concern and interest in organisations

around the world including Saudi Arabia (SA). Indeed, the SA government has launched the National

Digital Transformation Strategy for 2030 to support all public-sector organisations to improve efficiency

and performance. This research aimed to identify and analyse the factors that contribute to business/IT

strategy misalignment in Saudi public-sector organisations. This research focused emerged from the need to

better understand the business and IT models incorporated in the organisations Saudi Arabia to achieve high

performance, quality of service (QoS) and return of investment (ROI). Using a qualitative study design that

included semi-structured interviews with eight executive and managerial staff from five public-sector

organisations in Saudi Arabia, this study found human, operational and IT system factors all have the

potential to contribute to business-IT strategy misalignment. It also found the approaches to misalignment

avoidance in Saudi public-sector organisations sometimes lack structure and consistency.

1 INTRODUCTION

Over recent years, the alignment between informa-

ion technology (IT) strategy and business strategy

has emerged as a factor of critical importance and

continuous challenge within the information systems

(IS) discipline (Luftman and Derksen 2012; Luftman

and Kempaiah 2007). This has led to the

development of different models and theoretical

explanations for how IT alignment creates value

(Reynolds and Yetton 2015). However, governments

remain concerned about the continuous failure of IT

projects in public organisations (Byrd et al. 2005;

Pardo et al. 2006). Furthermore, there is increasing

concern that optimal return of investment (ROI) in

IT projects is not being achieved (Gerow et al. 2014;

Henderson, Venkatraman and Bharadwaj 1999; Rai

et al. 2015; Wu, Straub and Liang 2015).

The government of Saudi Arabia (SA) has

adopted a National e-Government strategy to

improve technology-based operations and service

delivery in public-sector organisations (Shehry et al.

2011; Rai et al. 2015; Yesser 2016). The implement-

tation of the e-government project however is facing

many technological, cultural, organisational, and

social challenges and issues, which must be

considered carefully by the Saudi government given

the limited research evidence and insights on this

issue to guide the successful to adoption of e-

government services in SA (Shehry et al. 2011).

Although, SA is classified as a high-income country,

there is little research and insight to guide the

successful to adoption of e-government services in

SA (Shehry et al. 2011). As such, there is no

practical model available to test strategic alignment

at the strategic plan level in Saudi Arabia (Alshehri

and Drew 2010).

As business-IT strategic alignment becomes

more complex with the rapid advances in the

technology and digitalisation revolution (Wu, Straub

and Liang 2015), governments implementing e-

service platforms are increasingly under pressure to

be more flexible in response to these transformations

and increasing industry clock speed (Tallon and

Pinsonneault 2011; Tanriverdi et al. 2010). Based on

these concerns, this study aimed to answer the

212

AlGhazi, A., Li, M., Cui, T., Wamba Samuel, F. and Shen, J.

Misalignment between Business and IT Strategic Objectives in Saudi Arabia Public Sector Organisations.

DOI: 10.5220/0006692902120220

In Proceedings of the 3rd International Conference on Internet of Things, Big Data and Security (IoTBDS 2018), pages 212-220

ISBN: 978-989-758-296-7

following research question:

Why is there continued misalignment between

business and IT strategic objectives in public sector

organisations in Saudi Arabia?

2 MISALIGNMENT: AN

OVERVIEW

A business’ IT strategy is typically defined as the

identification and adoption of relevant technologies

necessary to meet a set of objectives and goals by an

entity (Alsudiri et al. 2013). Given the ever-

increasing prevalence of IT infrastructures to

support business operations, businesses across the

world have had no choice but to incorporate IT into

their daily operations (Martinez et al. 2015; Seman

and Salim 2013). Business-IT misalignment is

characterised as the breakdown or lack of

coordination between business and IT to deliver the

coherent management of information to meet

business needs (Enagi and Ochoche 2013). Based on

this definition, the misalignment is likely to

negatively impact business performance given that

business-IT strategy alignment is required to

increase business value (e.g., Dulipovici and Robey

2013; Handley 2017; Rai et al. 2015). To explain

this relationship, Fichman and Melville (2014)

asserted that business performance is “conditioned”

by the business IT system.

The way in which business-IT strategy

misalignment is conceptualised will strongly

influence the process undertaken to identify the

misalignment indicators and to implement solutions

(Tallon 2007). However, the conceptualisation and

measurement of strategic (mis)alignment is made

complicated by the fact that alignment is largely

“unobservable” and that measuring IT and business

strategy is highly complex (Tallon 2007).

Schniederjans and Cao (2009) for instance

conceptualise misalignment as a mismatch between

functional-level strategic planning and sup-port for

business-level strategies. Misalignment has also been

conceptualised as a coordination issue, whereby poor

coordination exists between business and IT to deliver

the coherent management of information to meet

business needs (Enagi and Ochoche 2013).

2.1 Business-IT Strategy Misalignment

Factors

Misalignment between an organisation’s IT and

strategic goals invariably emerge from the dynamics

and complexities of general business practices (El-

Telbany and Elragal 2014). The three broad source

categories for business-IT strategy misalignment

identified in the literature are: human factors (e.g.,

perceptions, expectations, skill levels etc.), business

operation factors (e.g., knowledge assets, operational

model, IT execution model etc.), and IT design

factors (e.g., infrastructure components, assumptions

made by IT developers). See Figure 1 to shows the

relation between business and IT strategy and other

misalignment factors.

Figure 1: Relation between business and IT strategy and

other misalignment factors.

2.1.1 Human Factors as a Source of

Business-IT Strategy Misalignment

With regard to human factors, misalignment can

occur when employees conceptualise the IT tools

such as knowledge management systems (KMS) and

their strategic function differently (Dulipovici and

Robey 2013). This points to the need for businesses

to ensure there are the appropriate mechanisms of

verification to detect possible misalignments

(Corsaro and Snehota 2011).Furthermore,

misalignment may emerge due to differences

between the social and material interactions

surrounding the IT practices, particularly the use of

new technology. According to Leonardi (2009), the

social interactions underpin the way in which new

technology is ‘interpreted’; that is what the

technology is “meant to do”. Employee skills to

manage IT effectively is also identified as a human

factor leading to business-IT strategy misalignment.

For instance, the skills with which employees can

operate IT in combination with the outsourcing

knowledge management practices initiated by

managers will impact outsourcing performance and

the relationship to organisational governance

(Handley 2017).

2.1.2 Business Model as a Source of

Business-IT Strategy Misalignment

Enterprise architecture refers to a suite of domains

Misalignment between Business and IT Strategic Objectives in Saudi Arabia Public Sector Organisations

213

such as business processes, information manage-

ment, application systems and IT systems (Enagi

and Ochoche 2013). Misalignment occurs when the

business fails to adopt the necessary enterprise

architecture to align the business and IT strategies.

In turn, the extent of the misalignment / alignment

between business and IT strategies can be analysed

through a symptoms approach (Őri 2017). Towards

this end, he proposed a model to conduct an

enterprise architecture-based systematic analysis of

disharmony (misalignment) between business and IT

dimensions. The (IT) innovation posture of the

business can also contribute to business-IT strategy

misalignment when the strategic posture profile of

(IT) innovation in the organisation does not match,

or is not supported by, the resource profile of the

organisation (Fichman and Melville 2014).

2.1.3 IT Solution as a Source of Business-IT

Strategy Misalignment

At the IT source level, the primary focus is on the

disconnect between what is assumed about business

strategy objectives by IT developers and the actual

business strategy objectives on the ground. For

instance, when the a priori views of business

managers and IT developer differ, misalignment

between the IT system and business strategy is likely

because of the disconnection that emerges between

the potential affordances of the IT system and the

operationalisation of the capabilities (Heath et al.

2013). Wei, Wang and Ju (2005) explained that

misalignment between the functionality of a ERP

system for instance and the strategic objectives of

the business can emerge from the ‘disruptive’

change dynamics necessitated through the

introduction of the new system. Lastly, Soh and Sia

(2004) explained business-IT misalignment from a

structural perspective suggesting it emerges due to

opposing forces in the structures embedded in the IT

system and the business operations. Misalignment is

more likely to occur when some of the IT structures

are imposed onto the organisational structures rather

than voluntarily accepted which reduces the

organisation’s level of control over its structures

leading to misalignment (Soh and Sia 2004).

Theoretical Framework

Notably, since the 1990s, a range of models have

been developed to explain and inform alignment

strategies as well as to identify and/or remedy

business-IT strategy misalignment. For example,

The list includes, but is not limited to, the strategic

alignment model (SAM) developed by Henderson

and Venkatraman (1993). The SAM is an

IT/business management system that enables the

successful implementation of information

systems/technology and businesses and their

resulting infrastructural components (Renaud et al.

2016). The SAM can be based on, integrated and

defined by its four core building blocks and

fundamental strategic choice domains, including IT

strategies, business strategies, organisational process

and infrastructure and the informational systems and

technologies processes and infrastructure (Luftman

2004). Each domain and feature behind the building

blocks of the SAM has significance and features that

mainly consist of three components, i.e., strategic fit,

cross-dimension alignment and functional

integration. According to Luftman (2004), the

components and features that form the components

and basis of business and IT strategic alignment are

the twelve components of alignment.

3 METHODOLOGY

3.1 Study Design

This study employed a qualitative exploratory

design to understand and analyse the factors

contributing to business/IT strategy misalignments

and its impact on business performance in public-

sector organisations in SA.

3.2 Study Sample

The sample included eight senior and executive

managers in IT and business at multiple public-

sector organisation at Saudi Arabia. The different

job descriptions of the participants included business

strategy officers, project managers, IT department

managers and strategy-management offices with the

governance unit. Participant recruitment was limited

to senior managers or above because of their

background and experience in formulating business

and IT strategic goals and objectives.

3.3 Data Collection

Semi structured interviews were conducted with

eight managers from the multiple organisations

with minimum ten years of experiences as shows in

table 1.

The interview included 13 open-ended questions

intended to elicit views and opinions from

the participants related to business-IT strategy

and the potential factors contributing to strategy

IoTBDS 2018 - 3rd International Conference on Internet of Things, Big Data and Security

214

misalignment. The interviews were conducted

via telephone interviews and email. With the

participants’ consent, the phone interviews were

recorded to facilitate the data analysis process.

Table 1: Interview participants.

Job titles Abbr. Department Experience

Business Development

Manager

BDM IT 15 Year

Business Development

Manager

BDM IT 13 Year

Applications

Department Director

ADD IT 23 years

Strategy Analyst SA Business 10 years

Business Architecture BA Business 25 years

Communications

Directorate

CD IT 21 years

Director IT

Infrastructure

DII IT 25 years

Business Strategy

Consultant

BSC Business 20 years

3.4 Data Analysis

The data was analysed using NVivo. The program

supported an inductive content analysis to identify

the prominent themes in the qualitative data set

(Creswell 2013). A theme was defined as a recurring

topic or suggested meaning in the interviewees’

comments related to the main components of the

research question (Clarke and Braun 2013).

3.5 Ethics Considerations

Participant anonymity and data were achieved by

assigning codes rather than names during the

duration of the study to ensure the privacy of any

given information.

4 RESULTS

Most participants acknowledged the importance of

aligning business strategies with IT strategies to

improve business performance. However,

participants’ responses also revealed they perceived

there to be eight factors that contribute to business-

IT strategy misalignment:

1. Lack of coordinated communication (SA)

2. Lack of awareness between business

decision makers (BDM)

3. Lack of IT agility (BA)

4. Unclear requirements and responsibilities

(SA)

5. Unrealistic requirements and expectations

from the business (BA, SA)

6. Legacy systems not aligned to any of the

IT standards or best practices (DII)

7. Lack of clear business objectives (BDMs &

ADD)

8. When IT adopts the rule of planning and

accountability instead of business (BSC)

When considered collectively, the factors

contributing to business-IT misalignment identified

by the participants cover a wide range of operational

aspects including the clarity of the business and IT

objectives; communication pathways; employee

knowledge and skills; the agility of internal control

mechanisms (e.g., policies, procedures); and the

nature of the expectations placed upon the IT systems.

The participants’ views that are many and

diverse factors that contribute to business-IT

strategy misalignment aligns with findings reported

in other research studies. For instance, Dulipovici

and Robey (2013) found human factors to be a

significant contributor to misalignment, primarily

due to different employee perceptions and

expectations of the IT system. In addition, Nigeria,

Enagi and Ochoche (2013) found organisational

factors also contributed to business-IT misalignment

through the failure by the business to implement the

necessary enterprise architecture to align the

business and IT strategies. Lastly, research also

shows the IT system itself can be a contributing

factor to business-IT misalignment.

In response to these factors, some managers

indicated the importance of clearly stated business

goals and objectives, having agile and flexible IT

infrastructures, and regular auditing of processes:

“Developing clear and solid strategy and

objectives, and developing mature KPIs to measure

the alignment level” (BDM).

The relationship between audits of IT system

KPIs and business-IT alignment/misalignment, the

finding in this study is supported in other research

studies. For instance, Ayoup, Omar and Rahman

(2016) conducted a case study of a large Malaysian

Misalignment between Business and IT Strategic Objectives in Saudi Arabia Public Sector Organisations

215

Government-Link Company and found that audits

and reviews of the IT system KPIs using the

balanced scorecard (BSC) approach supported

improvement in operational processes.

In addition, most managers believed there is not

a sufficient approach or method in place in their

organisation to measure the profit-driven traditional,

ROI and the limit of optimum project profitability:

“Generally, our origination does not have a

dependable and clear approach to measuring ROI in

public organisations”. (ADD)

The finding of an inconsistent approach by

organisations to measuring the profit-driven

traditional, ROI, and the limit of optimum project

profitability suggests a lack of synchronisation

between business processes and business objectives

leading to business turbulence (Melnyk et al. 2014).

Other research studies attest to the effectiveness of

some of these models such as Khaiata and

Zualkernan’s (2009) claims of the effectiveness of

the six dimensions of the Strategy Alignment

Maturity Model (SAMM).

Most respondents also confirmed that there is not

a suitable enterprise architecture framework

dedicated for use in their company:

“Our origination does not use any kind of

architecture frameworks”. (ADD)

That Saudi organisations generally do not

employ an Enterprise Architecture framework to

achieve core business objectives is consistent with

the finding reported by Alshathry (2016).

Specifically, the author reported that there is a

“sharp disjoint between IT and business strategy” in

Saudi organisations due to a lack of maturity in their

understanding of business process management and

the utilisation of relevant measurement tools

(Alshathry (2016, p. 507).

However, some participants added that they are

using the customised TOGAF framework to manage

enterprise architecture along with Software

Development Life Cycle (SDLC) to ensure

consistent delivery of IT application and projects:

“Our IT organisation is aligned to ITIL best

practices, and complies with ISO 20K standards,

and we have an enterprise BMC solution aligned to

all ITIL V3 processes”. (DII)

In terms of the organisation’s IT strategy for

performance appraisal, three participants indicated

that the organisation’s IT KPIs were reviewed every

quarter, and one participant indicated that the

organisation’s IT projects included two KPIs:

average issue resolution time, and system

availability. Another participant commented that IT

project KPIs were reviewed by the Board to agree on

corrective actions or to implement new projects.

Regarding the organisation’s use of technology

solutions to share knowledge and information, most

participants revealed that their organisation was

using SharePoint software:

At the department level, we are using MS

SharePoint and Document library. (BA)

The finding that technology-based solutions for

knowledge management are used in the Saudi

organisation reflects current commentary in the

literature. For instance, Khaled, Renukappa, Suresh

and Saeed (2017) claims that the Saudi government

is actively pursuing initiatives to implement

Knowledge Management (KM) tools, methods and

philosophies in public sector organisations to

improve operational outcomes.

The manager participants also varied in their

views on the pattern of engagement with IT

innovation in their organisation and how it aligned

with the broader organisational strategy to improve

profit and performance outcomes. Some participants

pointed to an automated approach; whereas others

indicated that their organisation did not have an

overall innovation plan or a rule for IT-led

innovation:

“Automating all manual processes where

applicable and keeping up to date with the latest

technology to eliminate legacy processes where

possible”. (DII)

“Our origination does not have innovation

strategy. Questionnaires have been used to collect

new ideas from the employees”. (ADD).

In terms of IT and innovation strategy, the

findings in this study correlate with those presented

by Fichman and Melville (2014) that misalignment

between an organisation’s position on IT innovation

and its IT innovation resource profile shapes the

relationship between IT innovation and the

performance of the organisation.

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216

4.1 Internal Organisational

Mechanisms and Their Impact on

IT Outcomes

The results of the data analysis also pointed to the

relationship between the mechanisms within the

organisation and the realisation of desired IT

strategic outcomes.

Staff qualifications and training were identified

as important factors to impact business-IT strategic

alignment:

Most of the key IT staff members have sufficient

training and qualifications. (DII)

However, three managers also indicated that

there was no clear plan in their organisation to

improve the skills of IT staff to meet the

organisation’s needs:

There is no clear plan to improve the skills of

employees to meet the needs of the organisation.

(ADD)

Employee skills typically represent a critical

success factor (CSF) in an organisation, particularly

the skills of the CEO and IT managers (Coltman et

al., 2015). As such, the findings indicate that the

participants perceive the IT training provided to

employees as weak; that is, it does not provide them

with sufficient skills and qualifications to support

effective business-IT strategy alignment.

Furthermore, three participants indicated that the

IT projects in their organisations were not

underpinned by clear processes, procedures and

governance regulations during project lifecycle. In

contrast, two participants indicated that each IT

project in their organisation is governed by a

steering committee comprising of various

stakeholders, another participant also reported that

acceptance criteria are established for IT projects in

the company that identify and evaluate the

achievement of key milestones to ensure continuous

alignment with business needs.

Some participants (ADM and BSC)

acknowledged that their organisation does not apply

specific control procedures or standards at their

organisations. One participant however indicated

that implementing IT projects involves the

application of global standard procedures, and rules

and methodologies to accommodate those standards.

In addition, two participants stated that their IT

service management solution complies with ITIL V3

Standards and all its processes are based on ITIL

best practices.

In terms of the organisation’s use of specific

frameworks to avoid and detect misalignment

between the enterprise architecture, the primary

business objectives, and the level of engagement

between the business and IT domains, the

participants varied in their responses. For instance,

BSC spoke about the use of TOGAF and enterprise

architect; whereas, BDM described how his

organisation has a committee comprised of sectors

head that is responsible for ensuring that all

decisions are aligned also with the organisation’s

goals and objectives.

Also, organisations were found to use varied

approaches to managing risks related to business-IT

misalignment. This is aligned with other research

studies. For instance, Hinkelmann et al. (2016, p. 78)

assert the effectiveness of the TOGAF enterprise

architecture framework in an organisation to

“continuously monitor itself and be prepared to react

quickly to threads and opportunities”. As (Őri, 2017)

explains, the identification, examination and

correction of misalignment can be accomplished

through the utilisation of the enterprise architecture

model.

5 DISCUSSION

Of primary interest to this study is why there is

continued misalignment between business and IT

strategic objectives in public sector organisations in

Saudi Arabia? The main finding to emerge from the

analysis of data is that misalignment between the

business and IT strategy objectives in Saudi public-

sector organisations can emerge as a result human,

operational, and/or IT systems issues, and that the

avoidance or remedy of misalignment issues

requires a well-structured and model-based

misalignment detection processes. Furthermore,

when seeking to properly align business and IT

objectives it is crucial for Saudi organisations to

ensure employees have a good understanding of the

capabilities of the IT systems and how such

capabilities can be optimised to achieve the core

business goals and objectives.

This finding suggests the importance of a

coordinated and sophisticated approach by Saudi

public-sector organisations to manage business-IT

misalignment issues and outcomes. Organisations

clearly need to consider human resource

management issues and how they manage social

interactions to facilitate optimal IT system use

outcomes. Employees knowledge of the system and

their expectations of how the IT system contributes

Misalignment between Business and IT Strategic Objectives in Saudi Arabia Public Sector Organisations

217

to the achievement of core business goals and

objectives is of particular importance (Dulipovici

and Robey 2013). In turn, one of the implications for

practice is the need in Saudi organisations to

incorporate more informal workplace training

activities into operational practices to better deliver

the anticipated benefits of the IT systems (Esteves

2014).

In addition, there is the clear need for IT systems

and infrastructures in an organisation to adapt and or

undergo modification as business goals and

objectives change. As Enagi and Ochoche (2013)

point out, as business goals objective are adjusted or

modified, so too must the technological architectures

be modified. Furthermore, a related implication for

practice is the increase need for organisations to

ensure the regular audit and/or review of the IT

systems for their alignment with business objectives.

Audits / reviews in this context are crucial to

managerial decision making as they provide

managers with a basis for decision making by

helping them to clarify their strategic objectives,

measures, and targets (Aversano et al. 2012; Ayoup

et al. 2015).

Governance structures and processes in an

organisation can significantly impact the successful

implementation of IT projects (Wu, Straub and

Liang 2015). Regarding control procedures, Saudi

organisations attempt to achieve strategic alignment

through a range of internal control mechanisms.

Similarly, Cram, Brohman, Chan and Gallupe

(2016) found that organisations used a range of

control mechanisms to address four core IT control

dimensions: the IT system environment, the control

mechanism itself, socio-emotional behaviours of

employees, and the execution of control procedures.

Notwithstanding the heavy investment in IT by the

Saudi Arabian government in all public-sector

organisations, many organisations are still not able

to allocate sufficient management, operational and

governance resources towards the implementation of

IT projects.

More efficient and effective uses of

misalignment detention and remedy models and

frameworks will facilitate better business-IT

strategic alignment in Saudi public-sector

organisations. Therefore, stakeholder expectations

for quality product and service delivery from these

organisations, along with the organisation’s priority

to achieve key goals and objectives, should dictate

that greater attention is paid by the Saudi

government to implementing and properly utilising

suitable IT systems and platforms.

6 CONCLUSION

It is well-established that IT and business strategic

misalignment is a critical and fundamental issue of

concern to both executives and IT professionals in

contemporary organisations around the world. In

Saudi Arabia specifically, executive staff and IT

managers are under increasing pressure to support

the service quality and sustainability of the

organisation by avoiding and/or remedying business-

IT misalignment issues. This study identified the

human, operational, and IT system factors that

contribute to misalignment between business and IT

strategic objectives in Saudi public-sector

organisations. As such well-structured and

continuous efforts are required by managers and IT

staff in Saudi organisations to eliminate

misalignment and thus optimise organisational

performance. Towards this outcome, employees at

all levels must have a sound knowledge of the goals

and objectives of the business operations and

understand the role IT plays in supporting their

achievement.

Research Contribution

This study contributes to our academic and practical

understanding of business-IT strategy misalignment

through its analysis of the main causal factors of IT

and business misalignment and how misalignment

impacts organisational performance. In addition, it

contributes significant knowledge in the following

areas: the factors influencing IT performance and

misalignment between IT strategy and business

strategy by examining Business-IT Alignment

Maturity in public-sector organisations; the

operational measures utilised in organisations to

promote alignment / avoid misalignment; the

perspectives and attributes of misalignment as

revealed in a synthesis of the relevant research and

academic literature on business-IT strategy

misalignment and its implications for organisational

performance.

Study Limitations

The sample for the present study comprised only ten

senior managers and directors from different

government organisations – six from the field of IT

and only two from business. As study, the

generalisability of the study findings is limited.

Consequently, research studies with a much larger

sample size are required to ensure appropriate

generalization of this study’s findings. In addition,

the Saudi public-sector organisations for inclusion in

IoTBDS 2018 - 3rd International Conference on Internet of Things, Big Data and Security

218

this study were selected based on the quality of

services they provided. The selection of different

organisations may lead to different results because

of the nature of the public bureaucracy and culture.

Another limitation of this study is that the executive

participants were very busy. Lastly, because the

participant interviews were conducted via email or

telephone, there was no opportunity for this research

to gauge the body language and facial expressions of

participants to inform the line of questioning and

potentially elicit more valuable data on a response.

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