By covering information technology (IT) management at Air Canada over two decades, this case illustrates the process of alignment between IT and business over time. During the 1990s, the focus was on efficiency and the IT department supported business through both the centralization of the IT function and the outsourcing of most of the IT activities, with the explicit objective of reducing costs.

Twenty years later, at the time the case takes place, Air Canada had two key strategic objectives: operational excellence and customer proximity. In order to help meet these two objectives, IT now supported business through a hybrid structure and an innovation-based, “best-of-breed” sourcing strategy. Also, over the years, the IT department at Air Canada had developed processes aimed at ensuring efficient delivery of services by suppliers, as well as in-house processes to scan, identify and implement innovative IT solutions both for operational excellence and customer proximity.

Alignment between information technology and business, information technology outsourcing, and innovating with information technology

The purpose of the case is to help students understand the IT function of Air Canada, IT innovation, IT sourcing and also the alignment between business and IT at Air Canada. The case also discusses how the structure of the IT department and IT outsourcing help align IT and business. Moreover, the case demonstrates the challenges faced by senior IT directors in a multi-sourced IT environment.

• IT and business alignment
• Alignment maturity
• Alignment maturity model
• Dynamic capabilities theory
• IT outsourcing capabilities
• Innovating with IT