Business - IT Alignment?

Business - IT Alignment Series

In almost every company I have worked at, consulted for or interacted with, there seems to be some form of dislike or contempt for the IT department. I know this because I have been on both sides: I have been a staff member of IT and led IT; and I have also been a recipient of IT’s services.

Why does it seem like there is always tension between one part of the business (business here refers to the non-IT functional areas of the organization) or the other and IT? What are the factors driving this almost universal contempt for IT? While there are different drivers and there are differing points of view across the Business/ IT divide, my opinion is that a key cause is the degree to which the business and the IT function are aligned: Business - IT Alignment.

What is Business - IT Alignment?

When an organization documents a multi-year business strategy containing its aspirations and objectives for the strategy cycle, and its choices about where to play and how to win; the business typically identifies capabilities required to position it to win in the marketplace. These capabilities are referred to as enablers. Technology is a critical business enabler, and the extent to which an organization’s IT function is organized, structured, governed, equipped, etc. to achieve the business objectives is an indication of the degree to which the business and IT are aligned.

What areas of the business should be considered for Business - IT Alignment?

In my first year at the university, I recall sitting in an Introductory University Biology class and hearing my professor make a statement that stuck out to me. He said “form follows function”. He used this statement to explain why fish have fins, and why other animals are built the way they are. I am not sure why this statement has remained with me after so many years, but I find that I keep going back to it. And as I think about how businesses are structured, I again find this statement relevant.

Businesses must build or acquire the capabilities they need in order to achieve their objectives. They must also determine which of these capabilities are critical or core. The ‘form’ they take and evolve into should be driven by their ‘function’ i.e. what they intend to achieve. As the business identifies capabilities it requires to function, IT must also answer the question: “if the business requires so and so capability, what does it mean for IT? How can IT enable or support this business capability?”. To ensure holistic Business - IT alignment, a corresponding technology capability should be defined for each business capability, taking into account additional considerations that will underpin that technology capability such as processes, tools, people, policies, etc. This is the essence of subjects such as IT strategy and IT operating model, and will be the basis of another series of posts.

Who is responsible for Business - IT Alignment?

Now that we have established that basically all areas of the business should be considered when addressing Business - IT Alignment, whose responsibility then is it to ensure Business - IT Alignment? While IT should drive the conversation, I believe that the business should be more involved.

Too many organizations either leave technology conversations to IT or appoint an intermediary to hold conversations because technology feels like a black box. The reality however is that no one knows the business like the business. Consequently, the governance of the organization should be such that the business is a key contributor to technology-related discussions and decisions. I found the McKinsey Digital article titled “Business’ ‘It’s not my problem’ IT problem” which addresses this same issue, a very interesting read.

Benefits of Business - IT Alignment?

When an organization gets Business - IT alignment right, the business would experience the following amongst several benefits:

• Improved partnership between the business and IT

• Better technology support for business processes

• Improved returns on IT investments, eventually leading to a reduction in IT spend

• Fewer occurrences of incidents, and faster resolution when incidents occur

• Faster innovation and reduced lead time to market

• Satisfied internal customers and end users, and happier customers

When should a business ensure Business - IT Alignment?

Most organizations that take strategy articulation seriously will typically have conversations on how technology can support business objectives during the articulation of the multi-year strategy and also during periods of annual planning.

While this is better than never having conversations on Business - IT Alignment, the problem with this approach is that businesses are constantly evolving in response to strategic choices, industry trends, market forces, competitive dynamics, regulatory demands, growth, etc. The implication of this constant evolution is that the current needs of the business as understood by IT may be different than when the strategy was put together or when annual planning took place..

In order to ensure ongoing Business - IT Alignment, it is therefore important to ensure that the business and IT are constantly in touch, and that the evolving needs of the business are taken into consideration by IT.

How to ensure Business - IT Alignment?

Depending on organizational context, different organizations will need to do different things to ensure Business - IT Alignment. Typically, these activities will include one or more of the following:

• Documentation of an IT Strategy: this is a plan and roadmap of how technology will be used to enable realization of the vision and objectives of the business

• Review/ adaptation of the IT Strategy: as implied above, strategy documents become dated and need to be updated during annual planning sessions or based on a review schedule defined by IT

• IT Capability Assessment: helps to identify areas that need to be optimized or more mature in order to better support the business

• IT Operating Model Definition: it is also important that there is coherence within IT by defining how the different IT capabilities will function together, while taking the processes, interfaces, policies governance, organization, tools and performance management into consideration

• Instituting IT - Business Relationship Management: while all the tactics for ensuring Business - IT Alignment above tend to happen at a point in time, IT - Business Relationship Management is at the heart of maintaining ongoing discussions between the business and IT. It elevates IT from serving the business in a chaotic manner, or as an order taker to a strategic partner.

This is the first post in our new blog series on Business - IT Alignment. Join us next week for the next post in the series where we continue the discussion on Business - IT Alignment.

If you are wondering about how well your business and IT are aligned, consider taking Virtro's free, high-level Business - IT Alignment Assessment.

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