Does Business-It Alignment Still Out of Concern In Indonesian Banking Industry?

Abstract

Business performance is still a problem for banks in Indonesia. They have to cope with the higher standard of performance demanded by Financial Services Authority (FSI) since they have to face a more challenging environment after ASEAN Financial Integration by 2020. Therefore, the present research sought to investigate the business performance (read as banks performance) as the output of organizational capabilities when it was impacted by business strategy, IT capability and business-IT alignment. The data are collected from 32 banks associated in Indonesian Banks Association (Perbanas). The unit analysis isboard of directormember, or a banks commissioner. The collected data is analyzed using Smart PLS application. It found that business strategy had a better contribution comparing to IT capability and business-IT alignment in forming organizational capabilities impact on business performance.