Comparing the Operational Integration of a Core Information System in Insourcing and Outsourcing Firms

IT business alignment is widely acknowledged as an important driver for effectively applying information systems in a business context and for increasing the performance of the supported business process. But how does this structural integration of enterprise systems and business processes change when firms outsource the provision of their IT? We empirically compare how the value impact of structural IT business alignment on core financial processes in banks with an internal IT is different from banks that have their enterprise systems outsourced. It turns out that outsourcing substantially changes the ways operational alignment influences business process performance.