Strategic Alignment and Information Technology Base Infrastructure Toward a Solid Digital Business Strategy

The role of the information systems (IS)/information technology (IT) function has continuously evolved from back-office support into a business enabling strategic business unit. In this evolving role, the functional unit not only enables and drives the organizational strategy but also directs the organization’s future, by installing and developing capabilities that enable the firm to play lead with the rapid technological micro- and macro-environmental advances. Firms endeavor to align their IS and business strategies, but congruence has been difficult to attain in most instances. The purpose of this study was to explore the IS function and its concurrent strategic alignment to business and their influence on the formulation and implementation of a digital business strategy (DBS). The study lends itself to a change in thinking from an IT/IS strategy that is subordinate to and must align with a business strategy, to a fusion view where IS strategy is fully integrated with business strategy. The study design was a qualitative study conducted in the interpretive paradigm and applied the case study method as the research strategy. The study was conducted at three regional banks in sub-Sahara Africa with a combined 30 subsidiaries spread across 22 countries. These banks have made the transition from traditional to digital banking. This study established that, for a firm to sustainably compete in the digital era, it needs to move beyond seeking alignment, develop key capabilities, and formulate a DBS that fully considers and responds to the limitations of its existing socio-technical infrastructure. This study also established that the legacy systems and processes have an impact on a firm’s digital business strategy. Lastly, the study provides a detailed account of how managers perceive their alignment position and challenges in achieving it. In consideration of the paucity of literature in the general DBS concept, this study contributes, to theory, by adopting the resource-based view framework and Ciboria’s concept of the installed base to study the DBS context. The study informs IS practitioners of the need to consider and understand the limitations of their existing socio-technical infrastructure when formulating a DBS.