Trade.Information

Topic Name: Luftman presents correlations between information technology (IT)-business alignment in MIS Quarterly Executive

Category: Computer science & technology

Research persons: Professor Dr. Jerry Luftman

Location: Stevens Institute of Technology, United States

Details

Stevens Institute of Technology Professor Dr. Jerry Luftman has published the article, “An Update on Business-IT Alignment: ‘A Line’ Has Been Drawn,” in MIS Quarterly Executive’s September 2007 issue. Luftman serves as a Distinguished Professor and Associate Dean for the Master of Science in Information Systems in Stevens’ Wesley J. Howe School of Technology Management.

Luftman’s article presents positive correlations between the maturity of the information technology (IT)-business alignment and IT’s organizational structure, the CIO’s reporting structure and firm performance. With the assistance of Rajkumar Kempaiah, a Stevens graduate student, Luftman focused his research on understanding the persistent problem of attaining alignment between IT and business and found there is no single cause for this problem. He proposes that the alignment is best understood by measuring six different components—communications, value, governance, partnership, scope and architecture and skills—and then placing these components on a five-level maturity model, where Level 5 is the highest maturity. After measuring these six components for global organizations in the United States, Latin America, Europe and India, it was found that most organizations today are at Level 3 on the five-level maturity model. It was also found that federated IT organizational structures are associated with higher alignment maturity than centralized or decentralized structures, and that companies with CIOs reporting directly to the CEO, president or chairman have significantly higher alignment maturity than those where the CIO reports to a business unit executive, the COO, or the CFO. Furthermore, higher alignment maturity correlates with higher firm performance.

Note for Information System

An Information System (IS) is the system of persons, data records and activities that process the data and information in a given organization, including manual processes or automated processes. Usually the term is used erroneously as a synonym for computer-based information systems, which is only the Information technologies component of an Information System. The computer-based information systems are the field of study for Information technologies (IT); however these should hardly be treated apart from the bigger Information System that they are always involved in.
Information systems deal with the development, use and management of an organization's IT infrastructure.
In the post-industrial, information age, the focus of companies has shifted from being product oriented to knowledge oriented, in a sense that market operators today compete on process and innovation rather than product : the emphasis has shifted from the quality and quantity of production, to the production process itself, and the services that accompany the production process.
The biggest asset of companies today, is their information, represented in people, experience, know-how, innovations (patents, copyrights, trade secrets), and for a market operator to be able to compete, he/she must have a strong information infrastructure, at the heart of which, lies the information technology infrastructure. Thus, the study of information systems, focuses on why and how technology can be put into best use to serve the information flow within an organization.

About Stevens Institute of Technology

Founded in 1870, Stevens Institute of Technology is one of the leading technological universities in the world dedicated to learning and research. Through its broad-based curricula, nurturing of creative inventiveness, and cross disciplinary research, the Institute is at the forefront of global challenges in engineering, science, and technology management. Partnerships and collaboration between, and among, business, industry, government and other universities contribute to the enriched environment of the Institute. A new model for technology commercialization in academe, known as Technogenesis®, involves external partners in launching business enterprises to create broad opportunities and shared value. Stevens offers baccalaureates, master’s and doctoral degrees in engineering, science, computer science and management, in addition to a baccalaureate degree in the humanities and liberal arts, and in business and technology. The university has a total enrollment of 2,040 undergraduate and 3,085 graduate students, and a worldwide online enrollment of 2,250, with about 400 full-time faculty. Stevens’ graduate programs have attracted international participation from China, India, Southeast Asia, Europe and Latin America.