Business‐IT alignment: productivity paradox payoff?

Strategic alignment remains a key area of focus among business executives. Methods exist with which to determine the type of alignment a firm is following and there has even been research into the factors which aid and hinder the achievement of alignment. What is currently lacking is a financial performance metric with which a firm can benchmark itself against its competition controlling for industry classification or similar alignment perspective. This paper explores the financial performance and alignment of over 500 firms over the past five years. From these data, a regression equation to measure performance controlling for alignment perspective and industry classification is proposed. Such an equation provides firms with an idea of where they stand, on average, within their respective industry and among firms following the same alignment perspective. Implications for managers are also discussed as well as general strategies for managers to facilitate and enhance information technology investment.