The Impact of SOA Implementation on IT-Business Alignment: A System Dynamics Approach

With firms facing intense rivalry, globalization, and time-to-market pressures, the need for organizational agility assumes greater importance. One of the primary vehicles for achieving organizational agility is the use of agile information systems [IS] and the close alignment of information technologies [IT] with business. However, IS is often viewed as an impediment to organization agility. Recently, service-oriented architecture [SOA] has emerged as a prominent IS agility-enhancing technology. The fundamental question of how SOA can enhance organization agility and foster closer alignment between IT and business has not been adequately addressed. The dynamic interaction among external business environmental factors, organizational agility, and IS architecture makes the process of keeping IT and business aligned more complex. This study uses a design science approach to build a system dynamics model to examine the effect of employing alternative SOA implementation strategies in various organizational and external business environments on the IT business alignment and IS cost. The results provide insights into the shaping of IT-business alignment. Additionally, the system dynamics model serves as a tool for supporting managerial decisions related to SOA implementation.