Assessing the relationships among information technology flexibility, IT-business strategic alignment, and information technology effectiveness An investigation of business intelligence implementation

Assessing the relationships among information technology flexibility, IT-business strategic alignment, and information technology effectiveness An investigation of business intelligence implementation

ASSESSING THE RELATIONSHIPS AMONG INFORMATION TECHNOLOGY

FLEXIBILITY, IT-BUSINESS STRATEGIC ALIGNMENT, AND INFORMATION TECHNOLOGY EFFECTIVENESS: AN INVESTIGATION OF

BUSINESS INTELLIGENCE IMPLEMENTATION

by Jordan Bani

LAWRENCE NESS, PhD, Faculty Mentor and Chair KATHLEEN HARGISS, PhD, Committee Member MARY KARLENE SANBORN, EdD, Committee Member

William A Reed, PhD, Acting Dean, School of Business and Technology

A Dissertation Presented in Partial Fulfillment

Of the Requirements for the Degree

Doctor of Philosophy

Capella University March 2011

UMI Number: 3449293

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Abstract Many researchers called for research on the relationship among IT-business strategic alignment (SA), IT flexibility (ITF), and IT effectiveness (ITE) to be extended to broader business environments in private and public sectors The goal of this study was to fill the gap and address a limitation in previous scholarly research study (Ness, 2005) in the IT executive’s perception of SA, ITF, and ITE via the implementation of business

intelligence (BI) applications within the public school districts The role of BI solution in business is becoming a focal point because BI can be considered as a business driven technologies that delivers the right information in the right way to the right people in the most effective way for effective strategic and operational business decisions In pursuit of the optimal IT effectiveness, the study findings provided empirical evidence to support the study hypothesis that IT-business strategic alignment has a stronger positive

correlation with school districts’ IT effectiveness than IT flexibility; therefore, tighter business strategic alignment and responsiveness were found critical and valuable for school districts’ IT effectiveness and business productivity The research findings

IT-depicted that ITF has no overall impact on ITE; but, ITE in school districts is ultimately decided based on their IT-business strategic alignment In addition, it can be concluded that sufficient ITF could be considered as an enabler and a prerequisite component for an advanced maturity level of strategic alignment in school districts Indeed, more research

is needed to assess which construct(s) (ITF, SA, and/or ITFxSA) affect organizations’ IT effectiveness and productivity In a future study, the researcher recommends conducting a cross-industry (private and public sectors) comparison of these constructs via BI systems implementation and usage from both IT and business executives’ perspective

Dedication This dissertation study is dedicated to my parents and my wife for their

continuous support and encouragement to complete this research I would like to dedicate this research to my sons and my daughters for their help and encouragement during this study, who tolerated my countless hours of endless research Finally, I would like to dedicate this study to my oldest brother Dr Bani, who has been a life-long friend,

mentor, and inspiration

Acknowledgments

I would like to acknowledge and thank my distinguished mentor, Dr Ness, and

my committee members, Dr Hargiss and Dr Sanborn, for their guidance,

encouragement, and speedy and valuable feedback throughout the dissertation

milestones; it has been my distinct honor to work with and to be guided by this

committee through my dissertation journey I would like to thank all the participants of the study survey for their time and willingness to take the survey questionnaire, which made this study findings possible and worthy to both the practitioner and the scholar

Table of Contents

Acknowledgments iv

List of Tables viii

List of Figures ix

CHAPTER 1 INTRODUCTION 1

Introduction to the Problem 3

Background of the Study 7

Statement of the Problem 10

Purpose of the Study 12

Rationale 14

Research Questions 15

Significance of the Study 17

Definition of Terms 18

Assumptions and Limitations 23

Nature of the Study 24

Organization of the Remainder of the Study 24

CHAPTER 2 LITERATURE REVIEW 27

Introduction 27

Information Technology Flexibility (ITF) 29

IT-Business Strategic Alignment (SA) 41

Information Technology Effectiveness (ITE) 60

Business Intelligence (BI) 65

CHAPTER 3 METHODOLOGY 75

Purpose of the Study 75

Restatement of the Problem 76

Research Questions 78

Statement of Hypotheses 79

Extended Conceptual Framework Model 81

Operational Definition of Variables 82

Research Design 85

Sample 86

Setting 88

Instrumentation/Measures 89

Data Collection 90

Data Analysis 91

Validity and Reliability 94

Ethical Considerations 95

CHAPTER 4 DATA COLLECTION AND ANALYSIS RESULTS 96

Introduction 96

Research Study Survey 97

Research Study Results 99

Data Analysis for Research Questions 124

CHAPTER 5 DISCUSSION, IMPLICATIONS, RECOMMENDATIONS 136

Overview 136

Discussion 140

Conclusions 145

Limitations and Recommendations 147

REFERENCES 149

APPENDIX A CONSTRUCT ELEMENT TABLE 161

APPENDIX B IT EXECUTIVES SURVEY QUESTIONNAIRE 166

APPENDIX C LETTER OF INVITATION TO PARTICIPATE 181

APPENDIX D DESCRIPTIVE STATISTICS FREQUENCIES 184

APPENDIX E CORRELATION AND REGRESSION ANALYSIS 233

List of Tables

Table 1 Scale: Independent and Dependent Variables Cronbach's Alpha 101

Table 2 ITF-Connectivity (ITF1) Frequency Distribution 103

Table 3 ITF-Compatibility (ITF2) Frequency Distribution 104

Table 4 ITF-Modularity (ITF3) Frequency Distribution 105

Table 5 IT Personnel Competency (ITF4) Frequency Distribution 106

Table 6 SA-Communications (SA1) Frequency Distribution 108

Table 7 SA-Value (SA2) Frequency Distribution 109

Table 8 SA-Governance (SA3) Frequency Distribution 109

Table 9 SA-Partnership (SA4) Frequency Distribution 110

Table 10 SA - Scope and Architecture (SA5) Frequency Distribution 112

Table 11 SA-Skills (SA6) Frequency Distribution 113

Table 12 ITE-Quality of service (ITE1) Frequency Distribution 115

Table 13 ITE-Users’ Satisfaction (ITE2) Frequency Distribution 116

Table 14 ITE-Helpfulness of IT Staff to Users (ITE3) Frequency Distribution 117

Table 15 Chi-Square Crosstabs Analysis (n = 174) 119

Table 16 Bivariate Correlations - Analysis (n = 174) 120

Table 17 Partial Correlations - Analysis (n = 157) 124

Table 18 Inter-Scale Correlation Analysis Results (n = 157) 125

Table 19 Stepwise Multiple Regression Model Summary (n = 157) 130

Table 20 Stepwise Multiple Regression Model – Coefficients (n = 157) 131

List of Figures

Figure 1 Conceptual framework model 12

Figure 2 Framework depicting the relationship between ITF and ITE (Ness, 2005) 13

Figure 3 Extended conceptual framework model 81

Figure 4 The revised conceptual framework model 133

Figure 5 The simplified framework model 134

by using business intelligence computerized support applications Business intelligence (BI) can improve decision making and enhance an organization’s strategic position to effectively respond to the business environment pressures and even take advantage of opportunities to excel, because one of the main objectives of BI is to close the gap of alignments to strategically achieve an organization’s mission, objectives, and goals (Turban, Sharda, Aronson, & King, 2008) Business intelligence is a powerful tool to assist in business process improvement initiatives; furthermore, BI solutions help

companies achieve real benefit by providing data and analytics to analyze and control business processes at both the business strategic and operational levels

Business intelligence (BI) continues to top the list of technological priorities since

2005, based on the 2008 Gartner Group CIO survey (Viaene, 2008) The demand for BI data continues to increase, and there is a great pressure and need to develop and

implement new technologies to improve existing processes in order to boost effectiveness

and add business value by implementing BI applications to ensure that the right people get the right information at the right time in order to make informed business decisions There are major changes in how IT executives use IT to support education and business within the public school districts School districts are becoming more dependent on IT and are becoming more Web and Internet literate because they are using Web-based enterprise information systems (EIS), enterprise BI applications, and analytical

computerized tools to support their work and to deliver strategic and high business values

of education and business Business intelligence (BI) is an umbrella term that

encompasses many components, such as architecture, databases, enterprise information systems (EIS), Web-based analytical tools and applications, and enterprise performance management (EPM); all these components are integrated into a business suite application under a conceptual BI framework (Turban et al., 2008) Therefore, implementing and deploying BI applications within school districts can enable IT and business executives to make better decisions and to plan strategically because they have access to more accurate and timely information Furthermore, IT efficiency and effectiveness can arise from school districts’ possession of BI applications

This study focused on assessing the relationships among IT flexibility,

IT-business strategic alignment, and IT effectiveness via IT-business intelligence (BI)

enterprise information system implementation within the public school districts There is

a clear distinction between IT efficiency and IT effectiveness according to Tallon,

Kraemer, and Gurbaxani (2000); IT efficiency achieves as a result of using IT automation and standardization to improve performance and productivity and to reduce operation costs Information technology effectiveness comes as a result of using IT flexibility and

IT-business strategic alignment to foster greater responsiveness and flexibility to the dynamic business needs, and it enables and drives the organization’s business strategy McGaughey and Gunasekaran (2007) asserted that enterprise systems are designed to deliver operational efficiency and effectiveness through integrating, streamlining,

redesigning, and improving business processes reengineering (BPR)

Introduction to the Problem Information technology (IT) has become the essential infrastructure of any

enterprise, and the enabler of the business process (Gallo, 2010; Pantazi & Georgopoulos, 2006; Silvius, de Waal, & Smit, 2009) The advancement of business intelligence (BI), Web-enabled decision support systems (WDSS), and Web-based and Web services has revolutionized the business intelligence (BI) to support the dynamic business

environment and enterprise agility (Zhao, Tanniru, & Zhang, 2007); IT has been

embraced as the new standard for enabling an enterprise to interact with its stakeholders

to fulfill its business strategy

Organizations are turning to IT for assistance because IT and BI are the

foundations that enable their business success (Hosseini & Mazinani, 2006; Turban et al., 2008); most organizations in private and public sectors are deeply dependent on

information technologies (Ward & Peppard, 2005) Therefore, Shupe and Behling (2006) argued that budgeting for IT should be treated as an investment Large investments, which may be considered capital investments, are being made in implementing and deploying Web and knowledge-based enterprise systems and BI applications in

organizations It is estimated that more than 15 to 30% of companies’ budgets are

allocated to IT, and a good portion for EIS and BI applications The public school

districts spend a large portion of their annual budget on IT; it is estimated that around 13

to 18% of school district’s budgets are allocated to IT These large investments in IT make it necessary to assess how the primary variables correlate and contribute to IT effectiveness To justify an IT investment, top business and IT executives need to

understand the potential benefits resulting from the investment in EIS (Banker, Chang, & Kao, 2002) and business intelligence applications The benefits of ES and BI applications can range from operational improvements, such as enhancing performance and reducing costs, to strategic impacts, such as enabling and supporting the business strategy and integrating the stakeholders (Volkoff, Strong, & Elmes, 2005) Information technology function, especially the business intelligence (BI), is changing into a strategic partner and enabler because of its essential role in the school district

Information technology effectiveness and efficiency that enables and supports business strategy and process is a key factor for a successful organization in a dynamic environment (Pantazi & Georgopoulos, 2006; Silvius et al., 2009) Chief information officers (CIOs) and IT decision makers at the school district are faced with a huge

pressure to provide and drive efficiency, innovation, and effectiveness within their

organizations The effectiveness of IT in a school district goes beyond just software and hardware; it is IT-business strategic alignment that is deemed critical in the mind of IT executives (Luftman, Kempaiah, & Nash, 2006; Silvius et al., 2009) BI deployment helps improve the alignment of IT and business by detailing the relationship between IT and business In addition, a natural result of ES and BI applications implementation is increased efficiency and productivity (Silvius et al., 2009) Turban et al (2008) stated

that via information provided by BI applications, school districts can enhance their

competencies and ability to innovative, improve decision making and strategic planning, improve customer responsiveness, and improve business performance

Top management and IT executives in public and private enterprises are aware that investment in a successful deployment of BI applications can affect the efficiency and effectiveness of organizational performance (Alshawaf & Khalil, 2008; Drucker, 1998; Hosseini & Mazinani, 2006; Luftman, 2005; Ness, 2005; Ward & Peppard, 2005) Information technology effectiveness and efficiency can enable and drive innovation and add productivity and business value Huq and Martin (2006) concluded that market pressure is forcing enterprises to implement enterprise system(s) and BI applications for achieving efficiency and effectiveness Byrd and Davidson (2006) concluded that IT effectiveness increases organization performance and productivity Therefore, it is critical

to understand that IT effectiveness and efficiency can lead to better organization

performance and support and enable its strategic business needs Ranganathan and Brown (2006) asserted that organizations are adopting BI to have flexible IT architecture which will enable real time visibility to information organization wide Business intelligence (BI) provides visual presentation of critical data and information which allows executives

to vie, explore, and make decisions Thus, improving IT efficiency and effectiveness can enable and drive innovation and add business value in an enterprise

The attainment of IT efficiency and effectiveness should be the focus of a

business’s attention and strategic orientation; the goal of IT investment is to complement company strategy and enable the company to gain superior business performance and to sustain competitive advantage (Hosseini & Mazinani, 2006; Luftman, 2005; Rajendran &

Vivekanandan, 2008) Achieving and sustaining IT-business strategic alignment,

flexibility, and effectiveness have been long-standing goals that many IT and business leaders are continually looking and striving to accomplish in their organizations

(Luftman, 2005; Luftman & Kempaiah, 2007; Ness, 2005; Ward & Peppard, 2005) Studies have shown that IT-business strategic alignment contributes to higher levels of organizational performance and perceived business value from IT (Chen & Kamara, 2008; Luftman, 2005; Luftman & Kempaiah, 2007; Rajendran & Vivekanandan, 2008) Thus, there is a positive relationship between IT-business strategic alignment (SA) and IT effectiveness (Luftman, 2005; Tallon & Kraemer, 2003; Pantazi & Georgopoulos, 2006)

Information technologies are changing the nature of education throughout the world Business intelligence (BI) and enterprise system (ES) play a critical role in how the school districts teach, and they support and enable instructional and administrative programs School districts strive to use BI applications in an increasingly seamless

manner to empower administrative and instructional programs, coordinate the flow of information throughout the school districts, integrate IT with the outside stakeholders, and improve home and school communication (Delbaere & Ferreira, 2007) However, federal and state financial resources are diminishing because of the current economic turmoil; therefore, school districts are forced to scale back funding of IT projects and do more with less (Pierce, 2005) and IT budgets continue to be tighten, yet the school

districts are required to provide effective and efficient services and meet the strategic business needs; and business services demand technology innovation A well executed deployment of BI systems can enhance business performance to school districts

According to the U.S Department of Education’s National Center for Education Statistics (2006), nationwide there are 14,166 school districts, 97,382 public schools, 49,894,627 students, and 3,191,539 teachers across the nation The public K-12 school districts are adopting and deploying BI and ES packages to support the instructional and business needs; the main objective is to achieve higher efficiency and cost and time savings for a school district through process standardization, simplification and

automation, governance, and tighter integration across the organization and stakeholders

In addition, businesses that are utilizing enterprise systems are better positioned for innovation, flexibility, and change (Delbaere & Ferreira, 2007) Information technology (IT), especially enterprise system (ES) and BI applications, has played a core and vital role in the services provided by the school districts However, no empirical study has evaluated the impact of IT, especially BI applications, on public school districts’

effectiveness, flexibility, and alignment The need to assess the effect of BI applications adoption and deployment on a district’s IT flexibility, IT-business strategic alignment, and IT effectiveness motivates this study

Background of the Study The public sector, including public school districts and universities, is generally criticized for lagging behind the private business sector in the adoption of new

information technologies (Seethamraju, 2007) Public sector officials are often depicted

as being less innovative in IT effectiveness because of the bureaucracy and formal operational procedures environment (Thong, Yap, & Kin-Lee, 2000); officials in the public sector and districts have to follow fixed procedures because of formal regulations

According to Pierce (2005), chief information officers (CIOs), chief technology officers (CTOs), and information technology (IT) directors in school districts are faced with challenges which create difficult balancing acts as they strive to meet the diverse needs and goals of administrators, teachers, students, parents, and other stakeholders CIOs and

IT decision makers are faced with a huge pressure to provide and drive efficiency,

innovation, and effectiveness within their organizations and school districts

School districts are investing in information technologies at an increasing rate implementing and deploying information systems to support their instructional and business strategies in their efforts to manage and plan strategically (Wang & Zionts, 1997) A school district strives to implement a comprehensive enterprise BI application for managing its business and instructional functions (Pierce, 2005), because BI

applications tie together the school district’s back-office enterprise through a single integrated enterprise system An enterprise BI application that records, processes,

governances and monitors, and reports information and knowledge management within the school district helps the district facilitate and sustain business and offers a

competitive advantage (Hoffer, George, & Valacich, 2008), by providing efficient and effective services and information and knowledge management to teachers, business users, decision makers, parents, regulators, and other stakeholders

Delbaere and Ferreira (2007) concluded that organizations may embark on an enterprise system and BI applications as a strategic approach for compliance, and 90% of organizations that have implemented or are implementing enterprise systems believe that

BI is a strategic asset for their organization In addition, businesses that are utilizing BI and enterprise systems are better positioned for innovation, flexibility, and change

(Delbaere & Ferreira, 2007) Deploying BI enterprise systems at school districts not only saves time and money by improving efficiencies, but it is expected to enable better

decision making by giving key decision makers access to accurate, reliable, real time, and up-to-date information (Pierce, 2005) Thus, BI systems can provide a single version of truth and accurate information by integrating multiple components and systems

Despite the economic turmoil and an uncertain environment of continuous

change, organizations still need to invest in cutting-edge BI applications and IT, so their business can survive, compete, and grow Spending on BI applications and enterprise systems is growing rapidly because priorities are shifting to well-integrated enterprise systems (Luftman, 2005) and knowledge-based systems Organizations’ executives realize the value that can be added through enterprise integration of information systems, which helps a business to survive and prosper; they are increasingly moving to utilize BI applications and enterprise systems (Sledgianowski, Luftman, & Reilly, 2006) In 2004, AMR Research reported a 14% global increase in the ERP software market estimated at

$25 billion (Ifinedo & Nahar, 2006) Deployments of ES are focused on transforming processes within a business in order to share data across modules and among business units, to reduce costs, and to boost productivity (Hoffer et al., 2008) A good number of studies pointed to IT projects being unsuccessful (challenged, failed, or canceled)

anywhere from 50% – 80% of the time, and based on the Chaos report 2006, only about 35% of IT projects are completed on time and within budget (Standish Group, 2006) Many public school districts have adopted BI applications to support their instructional and business needs; the main objective is to achieve higher efficiency and cost and time savings for a school district through process standardization and tighter integration across

the organization (Delbaere & Ferreira, 2007) Business intelligence applications can play

a critical role in how the school districts support instructional and administrative

relationship with business performance (Rajendran & Vivekanandan, 2008), examined the impact of IT implementation on public accounting firm productivity, and concluded that significant productivity gains follow IT implementation (Banker et al., 2002)

However, empirical research has not assessed the relationships among IT flexibility, business strategic alignment, and IT effectiveness via BI applications implementation within public school districts, in which BI applications and enterprise systems have been widely adopted and are playing a prominent role Hence, assessing the impact of

IT-information technology, especially BI applications and enterprise systems

implementation, on IT districts’ effectiveness is of considerable interest to both academic world and the business community

Statement of the Problem The problem to be addressed is the declining success rate of IT projects and its impact on IT effectiveness in the U.S public school districts Jeffery and Leliveld (2004)

stated that challenged and failed IT projects cost U.S businesses $100-150 billion yearly The Chaos report 2009 shows that only 32% of IT projects were successful (delivered with required specify functions, on time, and on budget), compared to 35% in 2006 In

2009, 44% of IT projects were challenged (late, over budget, or the delivered functions less than the required), compared to 46% in 2006, and 24% failed (canceled or never been used), compared to 19% in the Chaos report 2006

Although the adoption rate for business intelligence in the public school districts

is rising and the interest is growing (Delbaere & Ferreira, 2007), its use is still immature and has not reached its full potential for providing improved management information and decision support when compared with the business world (Pierce, 2005) Ness (2005) conducted a quantitative study to assess the correlation between IT flexibility and IT effectiveness Ness documented that one of the primary limitations of the study was the

inclusion of only large for-profit (Fortune 1000 or Forbes 500 firm) organizations with

80 IT staff members or more, and recommended that the study be extended to various market sectors, such as the public sector or not-for-profit organizations, to validate that the research findings are consistent and can be universally applied

Gaps exist in the literature and there is a lack of empirical evidence to assess the degree to which IT flexibility and IT-business strategic alignment positively correlate with IT effectiveness by implementing BI enterprise solution(s) from IT executives’ perspectives within public school districts The goal of this study is to fill the gap and address a limitation in previous scholarly research study (Ness, 2005) in the IT

executive’s perception of IT-business strategic alignment (SA), IT flexibility (ITF), and

IT effectiveness (ITE) via the implementation of business intelligence (BI) applications and tools within the K-12 public school districts

Purpose of the Study The purpose of this quantitative study was to assess the relationship among IT flexibility (ITF), IT-business strategic alignment (SA) via the implementation of BI enterprise solutions that are effectively infused into the K-12 public school districts' business functions (business, instructional, and administrative programs), and IT-effectiveness (ITE), and to assess the interaction among these main-effect factors based

on the following framework model (Figure 1) In order to assess the correlation among these constructs (ITF, SA, and ITE), one should be able to measure them and their impacts on each other The researcher used a survey instrument (see Appendix B) that was used by Ness (2005) and Tallon (2008) for data collection in the non-experimental quantitative study

IT-Business Strategic Alignment (SA)

IT Flexibility

(ITF)

IT Effectiveness (ITE)

Figure 1 Conceptual Framework Model

This study could fill a primary limitation documented by Ness’s (2005) research,

which included only large for-profit (Fortune 1000 or Forbes 500 firm) organizations

with 80 IT staff members or more It was recommended by Ness that the study be

extended to various market sectors, such as public sector or not-for-profit organizations,

to validate that the research findings are consistent and can be universally applied Ness (2005) used a well-defined model (DeSantos & Pfeffer, 1991; Vitale, 1986) to assess the relationship and the correlation strength between ITF and ITE Figure 2 visually shows Ness’s conceptual model results; Ness discovered a significant correlation between ITF

and ITE, depicted in which r 2 = 0.206 Furthermore, Ness (2005) concluded that business strategic alignment’s (SA) relationship to both IT flexibility (ITF) and IT

IT-effectiveness (ITE) is statistically insignificant, which is depicted in Figure 2

Figure 2 Framework depicting the relationship between ITF and ITE (Ness, 2005)

Adapted from “Assessing the relationships among IT flexibility, strategic alignment, and IT

effectiveness: Study overview and findings,” by Ness (2005) Journal of Information Technology Management, 16(2) Adapted with permission of the author

The study was a replicate of Ness’s (2005) study within K-12 public school districts The study was concentrated on the implementation and usage of BI applications

as a potential determining factor of IT flexibility (ITF) and IT-business strategic

alignment (SA) as independent variables, and on IT effectiveness (ITE) as a dependent variable Finding the correlations among these factors may lead toward the production of

a model that IT executives may benefit from and use to achieve and sustain the optimal

IT effectiveness based on IT-business alignment and IT flexibility via the deployment of

BI enterprise solution(s)

Rationale The rationale and justification for this study was to determine which factor or variable was more related to IT effectiveness Little or no study has been completed to assess IT effectiveness in public school districts Information technology effectiveness and efficiency that support and enable business strategy and process are key factors for a successful organization in a dynamic environment (Silvius et al., 2009) Finding the factor with the greatest relationship to IT effectiveness could allow IT executives in school districts to more effectively achieve and sustain the optimal IT effectiveness based

on IT-business alignment and flexibility via the deployment of BI enterprise solution(s)

Information technology effectiveness based on IT-business alignment and IT flexibility via the deployment of BI applications within the school districts has not

previously been correlated simultaneously within the same regression model Moreover,

no empiric studies exist in the literature in which these constructs - IT effectiveness, business alignment, and IT flexibility via the deployment of BI enterprise solution(s) – have been correlated in a school district environment, and this study was designed to fill

IT-that gap This study was the first to provide empirical evidence from the context of the public sector, which filled a significant gap in the literature

This study could help IT executives make better informed decisions to achieve and sustain the optimal IT effectiveness based on IT-business alignment and IT flexibility via the deployment of BI enterprise solution(s) The findings of this empirical study could have significant contributions to the body of knowledge that may be utilized by IT-

business organizations, researchers, and others to achieve and sustain the optimal IT effectiveness based on IT-business alignment and IT flexibility via the implementation of

BI enterprise solution(s) since no such study has been conducted before on such an important topic within K-12 public school districts Thus, additional research that extends knowledge about these constructs is valuable

Research Questions The focus of the study was on examining K-12 public school districts’ IT

executives’ perspectives, and the management imperative is improving IT effectiveness resulting from BI applications deployment The central research question is whether IT executives should focus on IT-business alignment, IT-flexibility, or a hybrid of IT-

flexibility and IT-business alignment for achieving the optimal IT effectiveness The basic sub-questions to be answered by the study were as follows:

1 What relationship, if any, exists between a school district’s IT flexibility (ITF) and its IT effectiveness (ITE) resulting from BI applications deployment? H10: There is no significant correlation between a school district’s IT

flexibility (ITF) and its IT effectiveness (ITE)

H1A: There is a significant correlation between a school district’s IT flexibility (ITF) and its IT effectiveness (ITE)

2 What relationship, if any, exists between a school district’s IT-business

strategic alignment (SA) and its IT effectiveness (ITE) resulting from BI applications deployment?

H20: There is no significant correlation between a school district’s IT-business strategic alignment (SA) and its IT effectiveness (ITE)

H2A: There is a significant correlation between a school district’s IT-business strategic alignment (SA) and its IT effectiveness (ITE)

3 What relationship, if any, exists between a school district’s IT flexibility (ITF) and its IT-business strategic alignment (SA) resulting from BI applications deployment?

H30: There is no significant correlation between a school district’s IT

flexibility (ITF) and its IT-business strategic alignment (SA)

H3A: There is a significant correlation between a school district’s IT flexibility (ITF) and its IT-business strategic alignment (SA)

4 What relationship, if any, exists between IT flexibility (ITF) and IT

effectiveness (ITE) stronger than that between strategic alignment (SA) and IT effectiveness (ITE) resulting from BI applications deployment in a school district environment?

H40: Strategic alignment (SA) has an equal or greater correlation with IT

effectiveness (ITE) than does IT flexibility (ITF)

H4A: IT flexibility (ITF) has a higher correlation to IT effectiveness (ITE)

than does IT-business strategic alignment (SA)

Significance of the Study This empirical study has the potential of providing significant value for IT

executives in the K-12 public school districts as it attempts to capture empirical evidence

of the correlation between IT-business strategic alignment (SA), IT flexibility (ITF), and

IT effectiveness (ITE) resulting from BI applications implementation From an academic perspective, this study is designed to address a limitation documented by Ness (2005), who recommended that the study be extended to various market sectors, like the public sector or not-for-profit organizations, to validate that the research findings are consistent and can be universally applied This study could fill the gap and address a limitation in previous scholarly research study (Ness, 2005) in the IT executive’s perception of IT-business strategic alignment, IT flexibility, and IT effectiveness via the implementation

of BI applications within the schools districts

The intent of this study was to contribute to the body of knowledge that may be utilized by IT-business organizations, researchers, and others to achieve and sustain the optimal IT effectiveness based on IT-business alignment and IT flexibility via the

implementation of BI enterprise solution(s) After assessing these constructs (SA and ITF) that may influence IT effectiveness, this researcher proposed and verified methods for improving and sustaining IT effectiveness; and produced a regression model

Definition of Terms This study was focused on the following constructs that were used throughout the study: IT-business strategic alignment (SA), IT flexibility (ITF), and IT effectiveness (ITE) in the context of BI applications implementation and from IT executives’

perspective This section provides a brief review and definition for each construct

IT-business Strategic Alignment (SA) IT-business strategic alignment can be

defined as the degree of alignment, fit, and integration among business strategy, IT strategy, IT infrastructure, and business infrastructure (Henderson & Venkatraman, 1993) According to Huang and Hu (2007), IT-business strategic alignment (SA) involves active design, management, and execution of the IT functions in accordance with the enterprise’s vision, goals, and strategies; it is a basic principle of interaction between IT and business Strategic alignment of IT exists when an organization’s goals and activities and the information systems that support them remain in synchronization and provide the support and become an enabler (McKeen & Smith, 2003) Alignment between IT and business strategies enhances business success and enhances the corporate performance (Chan, Sabherwal, & Thatcher, 2006) IT-business strategic alignment is a high degree of connection between IT and business planning; the corporate business strategic plan asserts the objectives of IT in the business planning, while the IT strategic plan cites the business strategic plan as its foundation (Hu & Huang, 2006) Luftman and Kempaiah (2007) found that alignment involves interrelated capabilities and can be assessed by measuring six components: communications, value, governance, partnership, scope and architecture, and skills IT-business strategic alignment requires commitment and a culture of alignment, and a mechanism to deal with the inevitable shift in business and IT

alignment Therefore, alignment is bi-directional; alignment must focus on how IT and the business are aligned with each other

The deployment of BI applications, such as a balanced scorecard system, can successfully carry the corporate vision, goals, and strategies and the processes of

alignment can become embodied and institutionalized in the corporate culture (Huang &

Hu, 2007) Viaene (2008) asserted that BI has been recognized to enable IT and business strategic alignment and to become a genuine business partner The empirical study used the construct IT-business strategic alignment (SA) as an independent variable from IT executives’ perspective and in regard to BI applications implementation

Information Technology Flexibility (ITF) Langdon (2006) defined IT flexibility

as the ready capabilities of IT to be adapted and bended to meet and satisfy changes, rapid growth, and new additions of business requirements Information technology flexibility gives businesses the capability to adapt, control, and meet challenges, changes, and growth that may often occur in business requirements or in enterprise internal and external environments, enabling the organization to respond and control a wide variety of changes (Byrd & Turner, 2000; Chen, Sun, Helms, & Jih, 2009; Ness, 2005) Information technology flexibility demands an IT organization to respond quickly and effectively to meet a dynamic business strategy (Luftman, 2005) Lyons, Potter, Holm, Venousiou, and Ellis (2004) asserted that successful organizations need to adopt management structures and IT systems that favor flexibility and can adapt to deal with the dynamic and rapidly changing organization’s internal and external environment Viaene (2008) argued that BI implementations need to provide and enable agility and flexibility by promoting and providing effective use of BI across the organization A key selling point of BI is its

flexibility to meet diverse and rapidly changing business requirements (Soh, Sia, Boh, & Tang, 2003) Attaining IT flexibility requires close relationships and partnerships

between IT and business, and leadership and commitment by IT and business executives (Luftman, 2005) The study wass designed to use the construct IT flexibility

interchangeable to IT infrastructure flexibility as an independent variable from IT

executives’ perspective and in regard to BI applications implementation

Information Technology Effectiveness (ITE) Ness (2005) concluded that IT

effectiveness (ITE) is the degree to which IT can effectively and efficiently deliver services and solutions for businesses Ozkan, Cakir, and Bilgen (2008) defined IT

effectiveness as "the extent to which a given information system actually contributes to achieving organizational goal" (p 58), and they concluded that IT effectiveness can improve organizational performance Information technology effectiveness comes as a result of using IT flexibility and IT-business strategic alignment to foster greater

responsiveness and flexibility to the dynamic business needs; IT effectiveness enables and drives the organization’s business strategy and is a key factor for a successful

organization in a dynamic environment (Silvius et al., 2009) IT organizations should align their effort on doing the right things that is effectiveness and doing things right which is efficiency They should strive to strike the optimum balance between the IT efficiency and effectiveness Organizations have been using and implementing IT

applications and BI applications to create efficiency and effectiveness, and add value creation IT organization must show IT’s effectiveness and efficiency in meeting business strategic and operational services (Luftman, 2005) Hosseini and Mazinani (2006)

concluded that the effectiveness of IT services and their support of business processes is

directly correlated with IT performance, and IT executives are concerned about it

Therefore, it is very essential to measure IT effectiveness and its effect on business productivity The study was designed to use the construct IT effectiveness (ITE) as a dependent construct from IT executives’ perceptions of IT impacts (Ness 2005; Tallon et al., 2000; Tallon & Kraemer, 2007) in regard to BI applications implementation on IT business value

Enterprise Systems (ES) Enterprise systems (ES) are standardized, off-the-shelf

IT packages, complex and pervasive information systems, and commercial applications that can be configured and customized through an integrated comprehensive suite of modules and a centralized database, which integrates business solutions for the core business processes and functions of an enterprise (Dawson & Owens, 2008; Fang & Lin, 2006; Jones & Young, 2006; Klaus, Rosemann, & Gable, 2000; Luftman, 2005)

Enterprise system (ES) may include enterprise resource planning systems (ERPs), supply chain management (SCM), human capital management (HCM), enterprise risk

management (ERM), enterprise student information system (ESIS), eBusiness Suite (EBS), and other integrated ES packages Enterprise systems (ES) can be a critical resource for companies’ competitiveness, and the enabler of the business processes (Ganek & Kloeckner, 2007; Huang & Hu, 2007) In 2004, AMR Research reported a 14% global increase in the ERP software market estimated at $25 billion (Ifinedo & Nahar, 2006) For many organizations, implementing an ES is a large initiative and a huge IT investment that may impact the present and future of their existence and

competitiveness (Jones & Young, 2006) The benefits of a business intelligence

enterprise system’s (BI) can range from operational improvements, such as enhancing

performance and reducing costs, to strategic impacts, such as supporting business

strategy and integrating stakeholders (Volkoff et al., 2005) According to Yeoh and Koronios (2010) a business intelligence system must be able to accommodate changing business needs by being scalable and flexible Thus, business intelligence implementation

in an organization can improve workloads and operational efficiency with scalable, secure, and reliable enterprise systems, and can add business value

Business Intelligence (BI) Business intelligence is an umbrella term that

describes a conceptual framework for decision support to improve business decision making by using Web-based knowledge applications The BI’s umbrella includes

architectures, databases, applications, and methodologies of analytical tools and

applications (Raisinghani, 2004) Viaene (2008) defined BI as a variety of applications and technologies for gathering, storing, analyzing, and enabling access to data and

information that helps business users make informed decisions by offering a systematic and structured approach from a business perspective In 2008, the BI market raised 22% because organizations saw BI as a good long-term investment in this tough economy Companies are adopting BI applications which enable them to improve decision making based on information and knowledge, and to enhance their strategic position to sustain their competitive leadership in a dynamic business environment via information provided

by BI Business intelligence enables its user’s community (executives, super users, IT staffs, partners, and other stakeholders) to interact and access data, and provides them with the ability to conduct appropriate analyses to perform actions Thus, the process of

BI is the transformation of data and information from diverse data sources and

applications to information and knowledge, then to decisions and actions The empirical

study of K-12 public school districts wass designed to assess the relationship among IT flexibility (ITF), IT-business strategic alignment (SA), and IT effectiveness (ITE) from

IT executives’ perspective in the context of BI implementation

Assumptions and Limitations The assumption made in this quantitative study wass that the reliability and validity of the survey questionnaires has been maintained The survey questions for the study were based on prior research by Luftman, (2005), Ness (2005), Pierce (2002), and Tallon and Kraemer (2003) The previous research by Ness (2005) established a strong correlation between IT flexibility (ITF) and IT effectiveness (ITE), and Luftman (2005) discovered a strong relationship between IT-business strategic alignment (SA) and IT effectiveness The empirical study was designed to assess the correlations and the

strength among IT flexibility, IT-business strategic alignment, and IT effectiveness in the context of business intelligence (BI) applications implementation from IT executives’ perspective within the K-12 public school districts This study was limited to taking into consideration these constructs (ITF, SA, and ITE) from IT executives’ perspective in the context of BI implementation

The limitation of this empirical study was that it was focused on IT executives’ perspective in K-12 public school districts – that of either the CIO or the IT senior

manager or IT director One avenue of future research is to assess the constructs from IT and business executives’ perspectives Another limitation was that the organization, the K-12 public school district, is a part of public sector; a future study may incorporate government, universities, hospitals, cities, and state institutions Another avenue for a

future research is to do a cross-industry (private and public sectors) comparison of these constructs via BI applications implementation and usage

Nature of the Study The methodological approach for this study was quantitative correlational; a non-experimental quantitative research method was used The primary interest of this research was to assess the correlations and strength among IT flexibility, IT-business strategic alignment, and IT effectiveness in the context of BI applications implementation from IT executives’ perspective in the K-12 public school districts, by using multiple regression techniques The conceptual framework for the study was based on the findings presented

by Ness (2005) Ness provided empirical evidence that positive correlations exist

between IT effectiveness and IT flexibility The basic conceptual framework for the study was illustrated in Figure 1

Prior research projects and studies were used as the basis for construct elements, measures, and instruments; the use of these proven instruments and methods could ensure the reliability and validity of this study (Ness, 2005) A survey questionnaire was

developed based on information required for the assessment of the proposed constructs framework model as shown in Figure 1 A survey was used for data collection; a seven-

point Likert-type scale of ordinal values was used, in which 1 indicates strongly disagree and 7 indicates strongly agree

Organization of the Remainder of the Study The remainder of this empirical study was organized in four chapters; it

proceeded as follows Chapter 2 contained a literature review to build a solid background

of the existing knowledge associated with IT flexibility, IT-business strategic alignment and maturity, and IT effectiveness constructs The background of the study was

fundamentally based on peer-reviewed research from scholarly information technology articles relevant to ITF, SA, and ITE background and current thinking of the correlations

of these constructs in the context of business intelligence (BI) enterprise systems

deployment from IT executives’ perspective Chapter 2 draws on existing literature to develop the research conceptual framework model

Chapter 3 contained a discussion of the methodology that was utilized throughout this study, focusing on research design, sample population, data collection plan, survey instrumentation, analysis methods, assumptions and limitations and concerns with

reliability and validity, and ethical considerations of the proposed study This chapter contained a detailed presentation of the research questions, hypotheses, and variables of the model that would measure the correlations of the constructs by using multiple

regression and other statistical analysis methods Chapter 3 described the methodology used to operationalize the constructs and collect empirical data

Chapter 4 contained the data collection and analysis results on the primary

constructs of IT flexibility (ITF), business strategic alignment (SA), and

IT-effectiveness (ITE) Chapter 4 was organized in the following sections: The data

collection and analysis results from the main study of the survey responses, data analysis for research questions, constructing regression model, and the revised extended

conceptual framework model

Chapter 5 contained discussions and recommendations based on the empirical study’s findings conducted in chapter 4 Chapter 5 was organized into three main

sections The first section contained an overview of the statement problem, an

examination of the main literature relevant to the study’s significant findings The second section presented a discussion of the central research question and the sub-questions for this study, and placed the study findings in context with the existing body of knowledge The third section provided conclusions and recommendations based on the study

findings

CHAPTER 2 LITERATURE REVIEW

Introduction Based on a comprehensive literature review conducted for this empirical study, IT-business strategic alignment (SA) and IT flexibility (ITF) were identified as the

primary factors and as independent variables that influence IT effectiveness (ITE) which

is the target (dependent) variable One of the primary objectives of the empirical study was to assess these primary factors (SA and ITF) that influence IT effectiveness in an organization, in particular within the K-12 public school districts A comprehensive review of the IT flexibility (ITF), IT-business strategic (SA) alignment, and IT

effectiveness (ITE) relevant literature was conducted to determine the current correlation and assess the trend among these constructs that were used in the proposed empirical study; the literature offers many insights

The literature supports the general hypothesis that IT-business strategic alignment (SA), IT flexibility (ITF), and IT effectiveness (ITE) are positively correlated (Chanopas, Krairit, & Khang, 2006; Hosseini & Mazinani, 2006; Luftman, 2005; Luftman & Mclean, 2004; Ness, 2005) On one hand, some literature supports the importance and the

assertion that IT-business strategic alignment (SA) has a positive and stronger correlation with IT effectiveness and IT-business values (Chan et al., 2006; Huang & Hu, 2007; Luftman & Kempaiah, 2007; McKeen & Smith, 2003; Rajendran & Vivekanandan, 2008) On the other hand, some literature supports the assertion that IT flexibility (ITF) has a stronger positive relationship with IT effectiveness than SA, and it has been

concluded that IT flexibility (ITF) is a more suitable indicator of IT effectiveness

(Chanopas et al., 2006; Chen et al., 2009; Gabriel, 2008 Grainger & Tolhurst, 2005; Ho

et al., 2008; Iyer & Gottlieb, 2004; Ness, 2005; Tallon, 2008) The literature review chapter concentrated on three areas relevant to the constructs that were used in the

proposed empirical study: IT flexibility (ITF), IT-business strategic alignment (SA), and

IT effectiveness from IT executives’ perspective in the context of business intelligence applications deployment

The section on IT flexibility (ITF) reviews the current trends within the industry, because business executives are recently realizing the importance of IT and IT flexibility

as an enabler to business, and its critical role in changing and improving the way

businesses operate (Chanopas et al., 2006) The major components of IT flexibility are connectivity, compatibility, modularity, IT personnel competency, scalability, continuity, rapidity, facility, and modernity These components are reviewed in the literature in the context of their relationship to IT effectiveness (ITE) and business value The

relationship between IT flexibility and both IT effectiveness and IT-business strategic alignment (SA) is also reexamined

The section on IT-business strategic alignment (SA) focuses on recent trends within the industry and the impact of strategic alignment on IT effectiveness and business value, and the implications of having IT-business strategic alignment within the

enterprise The relationship between strategic alignment and both IT flexibility and IT effectiveness is discussed by reviewing the recent state of theoretical models, constructs, and measurements for assessing strategic alignment The section on IT effectiveness covers the current perspectives of IT effectiveness within literature and theoretical

models and measurements used to quantify IT effectiveness and business value The final

section focused on the relationship of the recent literature to the proposed empirical study Also revealed in the literature are the relationships among IT flexibility (ITF), IT-business strategic alignment (SA), and IT effectiveness (IFE) via business intelligence (BI) applications implementation within the public school districts, in which business intelligence (BI) applications are widely adopted and play a prominent role The primary objective of the proposed empirical studywas to assess these primary factors (SA and ITF) that influence IT effectiveness within the K-12 public school districts

Information Technology Flexibility (ITF) Business executives are realizing the importance of IT and its critical role in changing and improving the way businesses operate (Chanopas et al., 2006)

Infrastructure flexibility terminology is commonly used in literature because IT flexibility and IT infrastructure flexibility can be considered congruent (Ness, 2005) Chanopas et

al (2006) defined IT infrastructure as a set of shared IT resources which is related to communication across the enterprise and the implementation of BI applications Langdon (2006) defined IT flexibility as the ready capabilities of IT to be adapted and bended to meet and satisfy changes, rapid growth, and new additions of business requirements

Viaene (2008) argued that BI implementations need to provide and enable agility and flexibility by promoting and providing effective use of BI across the organization According to Chen et al (2009), IT flexibility must be addressed from both IT staff and business users’ perspectives for leveraging IT flexibility (flexibility to use and flexibility

to change) with adaptation activities; furthermore, IT flexibility is regarded as a key indicator of IT effectiveness and success (Chen et al., 2009; Ness, 2005) The two main