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IT Strategic Alignment Maturity and Business Performance for the Banking Industry in Kenya

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  • Stanley Mwangi Chege

    (Computer & Information Science The Catholic University of Eastern Africa Nairobi, Kenya I Langata Main Campus I Bogani East Rd, Off Magadi Rd)

Abstract

This study explored the connection between IT Strategic Alignment Maturity and the financial performance of Kenyan commercial banks. Using the SAMM framework, six alignment maturity criteria (governance, communications, value, partnership, technology scope, and skills) were evaluated. Quantitative correlation analysis was conducted with data from CIOs representing 70% of the Kenyan banking market (all Tier One banks). Findings revealed a significant positive link between IT-business alignment and profitability. The study suggests that banks seeking increased return on assets (ROA) should prioritize the development of robust strategic alignment maturity. Business-IT alignment (BITA) is a dynamic, ongoing process essential for organizational success (Luftman, 1996).  Successful alignment requires strong management support, clear prioritization, and effective communication across all levels of the organization (Luftman, 1997). To navigate the complexities of a rapidly changing business environment, companies must consistently evaluate their IT investments and strategies (Luftman, Papp and Brier, 1999).  A well-aligned IT function acts as a catalyst, driving innovation, competitiveness, and improved decision-making across the enterprise (Luftman, Papp, and Brier, 1995). However, alignment is challenging and requires collaboration between IT and other business units (Luftman, Lewis, and Oldach, 1993). When IT strategy and governance effectively support overarching business goals, organizations can transform their operations and unlock new levels of success (Haes and Grembergen, 2016).

Suggested Citation

  • Stanley Mwangi Chege, 2024. "IT Strategic Alignment Maturity and Business Performance for the Banking Industry in Kenya," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 10(4), pages 38-48, May.
    • Handle: RePEc:mgs:ijmsba:v:10:y:2024:i:4:p:38-48
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.104.1003
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    References listed on IDEAS

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    1. Venkatraman, N. & Henderson, John C. & Oldach, Scott, 1993. "Continuous strategic alignment: Exploiting information technology capabilities for competitive success," European Management Journal, Elsevier, vol. 11(2), pages 139-149, June.
    2. Daniel Adrian Doss & Russ Henley & David Hughes McElreath & Steve L. Mallory & Balakrishna Gokaraju & Raymond Tesiero & Qiuqi Hong & Linda N. Taylor, 2021. "The Capability Maturity Model Integrated as a Market Engineering Maturity Model," International Journal of Service Science, Management, Engineering, and Technology (IJSSMET), IGI Global, vol. 12(3), pages 175-196, May.
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    More about this item

    Keywords

    IT Strategic alignment maturity; Business performance; Maturity models introduction;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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