IT Governance and Business-IT Alignment in SMEs

has been high on the agenda of organisations. Many projects regarding IT governance have been initiated in various companies and government institutions, to achieve better alignment between IT and the organisation and to obtain the necessary involvement of senior business management in the value creation from IT-enabled investments. Prior research has demonstrated a relationship between IT governance and business-IT alignment. Companies in the financial sector with a high degree of business-IT alignment typically manage mature IT governance practices.1, 2 IT governance has been underlined as one of the necessary conditions for a better business-IT alignment.3, 4 Whether these findings also apply to the small and medium enterprise (SME) market is not known. This article focuses on companies in the SME segment in the Netherlands and discusses findings on business-IT alignment and IT governance practices in organisations in this field.5 It starts with a high-level description of the existing literature on business-IT alignment and IT governance. Subsequently, results are discussed on how business-IT alignment was perceived and how IT governance was implemented in a sample of SMEs from the Netherlands. The main conclusion of this study is that SMEs in the Netherlands score relatively low in the field of business-IT alignment compared to other international benchmarks. Furthermore, it was found that a select organisation with a relative high business-IT alignment score clearly applied better IT governance practices and vice versa. Although the sample is small, this result lines up with earlier results6 for large organisations, where this positive relationship between IT governance and business-IT alignment was also found. ConCepts of Business-it Alignment And it governAnCe Business-IT Alignment One of the first (and one of the best known) theories with regards to business-IT alignment is the Strategic Alignment Model (SAM), developed by Henderson and Venkatraman.7 SAM identifies four areas: business strategy, IT strategy, organisational infrastructure and IT infrastructure. The central issue in SAM is that organisations should continuously seek alignment amongst these four domains, with particular attention to the strategic fit (connection of the strategy and infrastructure, for both business and IT) and functional integration (connection of business and IT strategy and the business and IT infrastructure). The Henderson and Venkatraman model is portrayed schematically in figure 1.