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Operational Alignment Framework for Improving Business
Performance of an Organisation
Jakkapun Kwanroengjai1, Kecheng Liu1,2, Chekfoung Tan1 and Lily Sun3
1Informatics Research Centre, University of Reading, Whiteknights, RG6 6UD, Reading, U.K.
2School of Information Management and Engineering, Shanghai University of Finance and Economics, Shanghai, China
3School 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. (2014).
Operational Alignment Framework for Improving Business Performance of an Organisation.
In Proceedings of the 16th International Conference on Enterprise Information Systems, pages 352-359
DOI: 10.5220/0004886203520359
Copyright c
SCITEPRESS
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.
OperationalAlignmentFrameworkforImprovingBusinessPerformanceofanOrganisation
353
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.
ICEIS2014-16thInternationalConferenceonEnterpriseInformationSystems
354
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.
OA
V
SA
ITA
PCM
STA
4
(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
V
ORA
V
PA
V
2
(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
OperationalAlignmentFrameworkforImprovingBusinessPerformanceofanOrganisation
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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356
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
OperationalAlignmentFrameworkforImprovingBusinessPerformanceofanOrganisation
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
Low
Low
Organisational Process
Alignment (ORPAV)
2.75
Low
Organisational alignment
(ORAV)
Process alignment (PAV)
2.81
2.68
Low
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
ICEIS2014-16thInternationalConferenceonEnterpriseInformationSystems
358
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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