A Technological Alignment Diagnosis Test (TDAT) for SMEs

A Technological Alignment Diagnosis Test (TDAT) for SMEs Alejandro Cataldo1, Jens Hardings2 Computer Science Department Catholic University of Chile Santiago, Chile 1Email: 2Email: Robert J. McQueen Department of Management Systems University of Waikato Hamilton, New Zealand Email: Abstract This paper presents a test that helps practitioners and researchers to measure ICT alignment in SMEs. Practitioners and researchers have suggested SMEs use ICT in a way less than optimal, wasting important and limited resources. Although researchers have proposed several instruments to solve this problem, they show operative problems when applied to SMEs. We developed and applied a test that helps SME managers to diagnose and measure the misalignment of ICT in their firms. Additionally, we propose the usage of two indicators of misalignment of ICT in SMEs. We applied this test to 34 SMEs of different regions in Chile with positive feedback on behalf of the SME owners. SMEs are less misaligned at a strategic level than at the process level (23.9% and 42.6% respectively). Also, the findings showed statistically significant differences of alignment between firms of different regions. An open question: whether it is possible that in SMEs the process-level alignment delivers more information than strategic level alignment. Keywords SME, ICT Alignment, Information Technology, STROBE/STROIS, Strategy. INTRODUCTION The necessity for ICT alignment in businesses has aroused a special concern among researchers and practitioner. A problem that has received a lot of attention has been the technological alignment. In other words, the harmonic fit between the goals and activities of the organization and the information systems that support them (McKeen and Smith 2003). To help firms with the ICT alignment problem, researchers have proposed different solutions but there is little evidence showing that these techniques could be applied to real SMEs. We developed an instrument that helps an SME discover technological misalignment in its processes and strategic orientation. We called it: Technological diagnosis alignment Test (TDAT). TDAT was built integrating several instruments proposed in the literature, such as: STROBE/STROIS by Venkatraman and Chan respectively (Chan et al. 1997a; Chan et al. 1997b; Venkatraman 1989b), Processes Analysis proposed by Cragg and Tagliavini (2007) and the Tagliavini et al. Check-Up method (Tagliavini et al. 2004). This document has the objective to present TDAT and show the preliminary results of its application to 34 SMEs of different Chilean regions. Mostly, TDAT was applied to the CEO/owner and the CIO of the firm. The remainder of this paper is divided into four sections. Section two summarizes the literature which is the foundation for this work. Section three describes how TDAT was developed and details its most important components. Section four presents and discusses the main findings. The final section summarizes the conclusions and the potential for future work. LITERATURE REVIEW Technological alignment has been of significant interest among researchers of ICT and SMEs, and has very different and diverse approaches. One of these approaches has been about how to create instruments that help SMEs diagnose their misalignment. Some researchers have suggested that the same instruments used in larger firms could be utilized as diagnostic tools for SMEs (Gutierrez et al. 2009; Hale and Cragg 1996). Cragg and Hale (1996) adapted Venkatraman’s STROBE and Chan’s STROIS to SME’s conditions. The STROBE 311