lcga alignment report 2015

Assessing IT/Business Alignment

within

Local City Government Agencies

(LCGAs) — Report 2015

Assessing IT/Business Alignment within LCGAs–Report 2015

2

1. Executive Summary When city executive management, department heads, and leaders of local city government

agencies (LCGAs) were asked how well their IT and business strategies were aligned, they

provided an illuminating snapshot and baseline of their experience. One might think that their

responses would be inconsistent, but that was not the case. This study revealed a significant

agreement in perspectives to the overall maturity alignment level of LCGAs and the maturity

alignment levels in communication, competency/value, governance, partnership, technology

scope, and skills.

An online link to the survey was sent to approximately 800 participants from 81 different

randomly selected cities/towns in the Southwestern part of the United States. There were 80

participants who attempted the survey with 48 participants completing the survey. Only

completed survey responses were chosen for this study.

This study shows how well IT and business strategies are aligned in LCGAs based on the five

maturity alignment levels below:

1.1 Findings: Misalignment can cause problems in IT/business strategic planning, budgeting, investment

decisions, prioritization, and support (Chen, 2010). The findings are as follows:

LCGAs Maturity Alignment Level

Cities/Towns Full-Time Employees (FTEs) Participants Maturity Alignment Level

Small < 400 20 2.59

Medium 400 < 1,000 20 2.34

Large > 1,000 8 2.61

Overall -- 48 2.51

The Lows: Small cities had their lowest maturity alignment level in skills (2.33) while

both medium (2.05) and large (2.25) cities had their lowest maturity alignment levels in

competency/value

The Highs: Small cities are best at communications (2.91), medium cities are best at both

communication & partnership (2.58), and large cities are best at communication (3.21)

1.2 Recommendations/Conclusion: Misalignment hurts LCGAs in many ways. We must do everything in our power to correct

misalignment. It is recommended that LCGAs of all sizes work towards a maturity alignment of

Level 3. Each LCGA must improve alignment by using this study as a benchmark, they must

take the time to understand their strengths and weaknesses, and they must set target improvement

goals for the future.

Level 1:

Initial/Ad hocBeginning

Level 2:

CommittedRepeatable

Level 3:

EstablishedFormalized

Level 4:

ImprovedQuantifiable

Level 5:

OptimizedContinuous

Improvement


3

Table of Contents 1. Executive Summary .................................................................................................................... 2

1.1 Findings: ............................................................................................................................... 2

1.2 Recommendations/Conclusion: ............................................................................................ 2

2. Introduction ................................................................................................................................. 4

2.1 The Problem Statement ......................................................................................................... 4

2.2 The Purpose Statement ......................................................................................................... 4

2.3 The Survey Approach ........................................................................................................... 4

2.4 Keyword Terms .................................................................................................................... 5

3. LCGAs Maturity Alignment Level ............................................................................................. 6

3.1 Overall SAMM Level ........................................................................................................... 6

3.2 LCGAs SAMM FTEsize Level ............................................................................................ 6

3.3 LCGAs SAMM Criteria Level .............................................................................................. 7

3.4 The Lows .............................................................................................................................. 8

3.5 The Highs .............................................................................................................................. 8

4. Recommendations and Conclusion ........................................................................................... 10

4.1 Recommendations ............................................................................................................... 10

4.2 Conclusion .......................................................................................................................... 11

Appendix A: Survey Respondents Profiles ................................................................................... 12

Appendix B: Maturity Alignment Steps ....................................................................................... 13

List of Figures ............................................................................................................................... 14

References ..................................................................................................................................... 15


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2. Introduction There is a new normal in local city government agencies (LCGAs) that consist of less support

from federal and state agencies while experiencing an increase in demand for local services from

citizens (Abels, 2014). Maximizing on limited resources and eliminating waste is a must if

LCGAs are going to have a balanced budget and meet the rising demands of their citizens. One

way to maximize on limited resources and eliminate waste is through proper IT/business

strategic alignment. Misalignment will lead to catastrophic failures, failed/redundant projects,

disconnect of business needs, dissatisfaction, and higher payouts (Chen, 2010).

Every top executive, department head, and/or leader must recognize misalignment, identify the

level of misalignment, and work towards maturing alignment to maximize on limited time,

resources, and cost.

Have you ever seen this example or a similar case in your organization before? Department A

needs a way to track all their request and incidences. They decide that they need a $50k software

application. They get approval for it and they have it all to themselves. Department B has

decided to use Excel to track all incoming request and a few incidences. Department C depends

on Employee A and B to track all incoming request and incidences. Everyone lives happily-ever-

after, right? Wrong! Redundant projects are an example of misalignment. We need to start

thinking about alignment as an organization and not as individual pieces.

2.1 The Problem Statement The problem is that there is limited information regarding LCGAs IT/business maturity

alignment level compared with its full-time employment size (FTEsize).

2.2 The Purpose Statement The purpose of this quantitative survey study was to assess LCGAs IT/business strategic

alignment within the Southwestern part of the United States to determine the level of maturity

alignment.

2.3 The Survey Approach A quantitative web-based survey method was used to assess LCGAs in the Southwestern part of

the United States. SurveyMonkey was the conduit to distribute the survey and act as an

instrument to collect data. Informed consent acknowledgment information was provided at the

beginning of each survey. The survey was anonymous and did not identify or obtain the

organization or participant information. At the end of the survey, participants were given one

final chance to decide if they wanted to have their responses added to this study before

submission.

An online link to the survey was sent to approximately 800 participants from 81 different

randomly selected cities/towns in the Southwestern part of the United States. The survey was

available between Aug 30th – Sep 18th, 2015. There were 80 participants who attempted the

survey with 48 participants completing the survey. Only completed survey responses were

chosen for this study. After finalizing data collection, SurveyMonkey provided an exportable


5

SPSS data file using Illume software with case numbers attached (no other identifiers). The data

file was then analyze using SPSS version 21 software.

The instrument used to assess LCGAs is Luftman’s strategic alignment maturity model (SAMM)

instrument. This instrument has been used for over 14 years in the private industry. This study is

the first study to use this instrument in LCGAs. Luftman’s SAMM survey consisted of 41

questions. These questions were grouped into seven sections as follows:

Demographics

Communication

Competency/value measurement

Governance

Technology scope

Skills

2.4 Keyword Terms

Communications (COMM): “The effectiveness of leveraging information for mutual

understanding and knowledge sharing” (Chen, 2010)

Competency/Value Measurement (COMP): “The management decisions and strategic

choices that an organization makes when determining the value and contribution of IT to

the firm” (Chen, 2010)

Business strategy: is the overall organizational strategy of LCGAs

FTEsize: Full-time employment size is the independent variable grouped into three

categories; small, medium, and large cities/towns

Governance (GOV): According to Palczewska, Fu, Trundle, and Yang (2013),

governance is a collection of strategies and processes that formally manages problems.

Maturity Alignment: The maturity alignment levels consist of five levels: initial,

committed, established, improved, and optimized. It identifies how well an organization

configures itself with the business needs

LCGAs: Local city government agencies consist of towns and cities ranging in size

greater than 400 and less than 1,000 full-time employees

Partnership (PART): “Pertains to how IT and the business perceive each other’s

contribution” (Chen, 2010)

Skills (SKILLS): “The organization’s cultural climate towards change and innovation”

(Chen, 2010)

Strategic Alignment Maturity Model (SAMM): An assessment instrument that included

six maturity criteria such as communication, competency, governance, partnership,

technology scope, and skills (Luftman, 2000). It links IT strategies with business

strategies

Technology Scope (SCOPE): “The management decisions and strategic choices an

organization makes when allocating resources toward its IT infrastructure” (Chen, 2010)


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3. LCGAs Maturity Alignment Level This section focuses on the main findings of this study. You will be able to see a snapshot of the

overall LCGAs maturity alignment level, the SAMM FTEsize level, and the SAMM criteria

levels. Each chart depicts the most current and only data available today.

3.1 Overall SAMM Level The overall maturity alignment level for all LCGAs in 2015 was 2.51. According to Luftman,

Ben-Zvi, Dwivedi, and Rigoni (2010), the overall maturity alignment level for private enterprises

in 2010 was 2.84. Comparatively, LCGAs need to do a better job of establishing and formalizing

their processes rather than being committed to repeatable processes. Figure 1 portrays a general

comparison between LCGAs and the private enterprise.

Figure 1: LCGAs vs. Private Enterprise

3.2 LCGAs SAMM FTEsize Level This study then looked at the maturity alignment level in terms of its full-time employment size

(FTEsize). Small size LCGAs were identified as having less than 400 FTE. Medium size LCGAs

were identified as having 400 and more but less than 1,000 FTE. Large size LCGAs were

identified as having 1,000 or more FTE. Figure 2 shows the current state of each LCGAs

FTEsize. Figure 2 should make you ask the question how can our LCGA move from a

committed/repeatable level to an established/formalized level?

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

LCGAs2.51

Private Enterprise2.84

SAM

M L

EVEL

Overall SAMM Level

LCGAs Private Enterprises


7

Figure 2: Current Snapshot of Each LCGA Size

3.3 LCGAs SAMM Criteria Level Further analysis was done to understand the current snapshot of each LCGA. Six different areas

were assessed; communication, competency/value, governance, partnership, technology scope,

and skills. Figure 3 provides more granular trends based on the LCGAs FTEsize. Note how all

responses, except one, are within the same level. Responses were similar across each criteria.

Figure 3: FTEsize Trend-Lines

0

1

2

3

4

5

Small Cities<400 Medium Cities

400<1,000 Large Cities>1,000

2.592.34 2.61

SAM

M L

evel

Full-Time Employment Size (FTEsize)

LCGAs SAMM FTEsize Level

0

1

2

3

4

5

Comm Comp Gov Part Scope Skills

Small 2.91 2.46 2.58 2.77 2.55 2.33

Medium 2.58 2.05 2.38 2.58 2.47 2.14

Large 3.21 2.25 2.43 2.75 2.70 2.52

SAM

M L

evel

SAMM Criteria

LCGAs SAMM Criteria Level

How well does

your organization

align?


8

3.4 The Lows It is important to focus on the lows of maturity alignment to prioritize focus in critical areas of

improvement. The low for small LCGAs is in the area of skills. Both medium and large LCGAs

experience lows in competency/value.

Small cities will need to move from clashing across departments to an emerging value service

provider. They need to also have balance in hiring technical and business applicants within IT.

Medium and large cities will need to move from measuring functional cost efficiency to

measuring cost-effectiveness throughout the organization. They also need to be able to develop

relevant dashboards.

Note: Lows are identified in red. They must be addressed first.

Figure 4: The Lows of LCGAs

3.5 The Highs It is also important to acknowledge the highs of LCGAs. The highs for small, medium, and large

LCGAs are all in the areas of communications. Medium cities also experience highs in

partnership.

Although LCGAs experience their greatest successes primarily in communication, there is still

work to be done. They can improve by moving from a limited business/IT understanding to

precise understanding and easy evolving communication. Medium LCGAs can also work on

moving from IT emerging as an asset, process enabler, to IT is as an asset, process driver. They

can also see conflict as an opportunity to become more creative.

Note: Highs are identified in green. Improvement must be done in these areas as well.

0

1

2

3

4

5


Small 2.91 2.46 2.58 2.77 2.55 2.33

Medium 2.58 2.05 2.38 2.58 2.47 2.14

Large 3.21 2.25 2.43 2.75 2.70 2.52

SAM

M L

evel

SAMM Criteria

LCGAs SAMM Criteria Level


9

Figure 5: The Highs of LCGAs

0

1

2

3

4

5


Small 2.91 2.46 2.58 2.77 2.55 2.33

Medium 2.58 2.05 2.38 2.58 2.47 2.14

Large 3.21 2.25 2.43 2.75 2.70 2.52

SAM

M L

evel

SAMM Criteria

LCGA SAMM Criteria Level


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4. Recommendations and Conclusion The recommendations and the conclusion of this study are based on the results gathered from the

online survey responses. Results of this study identified areas in which LCGAs can improve

alignment between information technology and their overall business strategy. Designated areas

of recommendations are in communication, competency, governance, partnership, technology

scope, and skills. Ultimately, LCGAs must work to eliminate misalignment.

4.1 Recommendations It is recommended that small, medium, and large LCGAs work towards better alignment by

moving from a committed level to an established level of maturity. To move from a maturity

level of 2 to a level of 3, LCGAs must transition as follows:

1. Communication: Each LCGA will need to move from a limited business/IT

understanding to a proper formal understanding and developing evolving

communication

2. Competency: Each LCGA will need to move from measuring functional cost

efficiency to measuring cost-effectiveness and be able to develop relevant dashboards

3. Governance: Each LCGA will need to move from being strategic at the functional

level, occasionally responsive, to having formalized processes across the organization

4. Partnership: Each LCGA will need to move from IT emerging as an asset, process

enabler, to IT is as an asset, process driver, and conflict seen as the opportunity to

become creative

5. Scope: Each LCGA will need to move from being transactional to integrated across

the organization

6. Skills: Each LCGA will need to move from clashing across departments to an

emerging value service provider and balanced in hiring technical and business

applicants within IT


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4.2 Conclusion Top executives, directors, and leaders within LCGAs must take a look at this study, understand

why alignment is necessary, and compare their city/town to these benchmark results to see if

improvements are needed. Leadership must think in terms of maturity alignment and ask what

level of maturity are we at? Are we at Level 1 (Initial/Ad hoc), Level 2 (Committed/Repeatable),

Level 3 (Established/Formal), Level 4 (Managed/Quantifiable), or Level 5

(Optimized/Continuous Improvements)? Each LCGA should solidify their strengths and improve

upon their weaknesses. Misalignment causes chaos and confusion. Proper alignment saves on

precious time, money, and resources.

Please take the time to recognize misalignment, assess your LCGA, and improve areas of

deficiencies. How we perceive ourselves to be aligned is a direct reflection of how well our

organization is aligned. We must start looking at our processes and at the way we manage time,

money, and resources in terms of maturity alignment. We must ask what level are we at and what

can be done to improve? Appendix B provides all the different level steps for improvement.

There is a new normal for LCGAs. We must align our precious time, money, and resources to do

more with less. How can you improve alignment in your LCGA?

Established

Comm: Good

understanding; emerging relaxed

Comp: Some cost

effectiveness; dashboard established

Gov: Relevant process

across the organization

Part: IT seen as an asset;

process driver

Scope: Integrated across the

organization

Skills: Emerging value

service provider

Level 3Committed

Comm: Limited

business/IT understanding

Comp: Functional

cost efficiency

Gov: Tactical at

functional level; occasional responsive

Part: IT emerging as

an asset; process enabler

Scope: Transaction

Skills: Different

across functional organizations

Level 2

Level 1:

Initial/Ad hocBeginning

Level 2:

CommittedRepeatable

Level 3:

EstablishedFormalized

Level 4:

ImprovedQuantifiable

Level 5:

OptimizedContinuous

Improvement


12

Appendix A: Survey Respondents Profiles What position do you hold?

Answered: 48 Skipped: 0

Q1: Leader (IT Subject Matter Expert, Supervisor, Manager, or similar)

Q1: Department Director (Department Head, Director, CIO, CFO, or similar)

Q1: Top Management (Deputy City Manager, City Manager, Council Member, Mayor)

How large is the city/town in which you work in (based on full-time employees FTEs)?

Answered: 48 Skipped: 0

Q2: Small City/Town - less than 400 FTEs

Q2: Medium City/Town - 400 or more FTEs but less than 1,000 FTEs

Q2: Large City/Town - greater than 1,000 FTEs


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Appendix B: Maturity Alignment Steps Steps to improve alignment (Luftman, 2000, pg.11)

Optimized

Comm: Informal, pervasive

Comp: Extended

to external partners

Gov: Integrated

across the org & partners

Part: IT/Business

co-adaptive

Scope: Evolve

with partners

Skills: Education/career/re

wards across the organization

Level 5

Improved

Comm: Bonding

unified

Comp: Cost

effective; dashboard managed

Gov: Managed


Part: IT

enables/drives business strategy

Scope: Integrated

with partners

Skills: Shared

risk & awards

Level 4

Established

Comm: Good

understanding; emerging relaxed

Comp: Some cost

effectiveness; dashboard established

Gov: Relevant

process across the organization

Part: IT seen as an

asset; process driver

Scope: Integrated


Skills: Emerging

value service provider

Level 3

Committed

Comm: Limited

business/IT understanding

Comp: Functional cost efficiency

Gov: Tactical at

functional level; occasional responsive

Part: IT emerging

as an asset; process enabler

Scope: Transaction

Skills: Different

across functional organizations

Level 2

Initial/Ad hoc

Comm: Lack

understanding

Comp: Some

tech measurements

Gov: No

repeatable processes, cost center, reactive

Part: Conflict

Scope: Traditional

Skills: IT taskes

risk, little reward, technical training

Level 1


14

List of Figures Figure 1: LCGAs vs. Private Enterprise ......................................................................................... 6

Figure 2: Current Snapshot of Each LCGA Size ............................................................................ 7

Figure 3: FTEsize Trend-Lines ....................................................................................................... 7

Figure 4: The Lows of LCGAs ....................................................................................................... 8

Figure 5: The Highs of LCGAs ...................................................................................................... 9


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References Abels, M. (2014). Strategic alignment for the new normal collaboration, sustainability, and

deliberation in local government across boundaries. State and Local Government Review,

46(3), 11-218. doi:10.1177/0160323X14551179

Chen, L. (2010). Business–IT alignment maturity of companies in China. Information &

management, 47(1), 9-16. doi:10.1016/j.im.2009.09.003

D'Anjou, L. M. (2016). Assessing information technology and business alignment in local city

government agencies (Order No. 3746556). Available from Dissertations & Theses @

Walden University. (1756771029). Retrieved from

http://search.proquest.com/docview/1756771029?accountid=14872

Luftman, J. (2000). Addressing business-IT alignment maturity. Communications of AIS, 4(14),

1-50. Retrieved from http://aisel.aisnet.org/cais/

Luftman, J., Ben-Zvi, T., Dwivedi, R., & Rigoni, E. (2010). IT governance: an alignment

maturity perspective. International Journal on IT/Business Alignment and Governance,

1(2), 13-25. doi:10.4018/jitbag.2010040102

Magnusson, J., & Bygstad, B. (2013). Why I act differently: Studying patterns of legitimation

among CIOs through motive talk. Information Technology & People, 26(3), 265-282.

doi:10.1108/ITP-10-2012-0117

Palczewska, A., Fu, X., Trundle, P., Yang, L., Neagu, D., Ridley, M., & Travis, K. (2013).

Towards model governance in predictive toxicology. International Journal of Information

Management. 33(3), 567-582. doi:10.1016/j.ijinfomgt.2013.02.005

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