What do we mean by IT / business alignment and how do we achieve it?

@Michael Krigsman: "how do you get management involved into the IT process?" Actually, I think the collaboration needs to begin with the IT Leadership involved in the business management process. This means having people in IT leadership positions that understand technology as it relates to the businesses strategy and not just from a technologists viewpoint. I have a unique perspective because I started in Sales and Operations, eventually migrated to Technology and Technology Management, then into Consulting.

If the IT Leader can demonstrate tangible business value, they will be a welcome member of the executive team. A mentor of mine once said, "You won't be heard by the Executive Team, until you say something worth listening to" - sage words :-)

As a technology professional, its frustrating to see companies where IT is lead by the lead technical person - while that is a great resource to have, the best results have been seen when IT leadership understands and innovates in a way that supports the business strategy.

IT leadership needs to be integral to strategic planning, accountable for business metrics outside of their function and supportive of the innovation throughout other business functions.

Internal politics affecting IT-business alignment? Gee, I've NEVER seen that in my 30-plus years as an IT industry analyst, journalist and observer... ;-)

While kicking the non-cooperative or non-combative out of the discussion may be viscerally appealing, it also creates what some of my fellow industry analysts and I refer to as "career-limiting opportunities" for those doing the kicking. Or put another way, you catch a lot more flies with sugar or honey than with vinegar.

The way to get everybody on the same page, despite and/or because of politics, is to show demonstrable, credible and meaningful benefits, to the business, to each business unit, and to individual stakeholders and influencers. This means that IT should never spend a dime of company money that doesn't result in creation or improvement of the ability to deliver such benefits.

Now, DEFINING what are and are not demonstrable, credible and meaningful benefits and agreeing upon those definitions can be the Consultant's Full Employment Act at some companies. But this approach has to be the ultimate goal if a company is going to achieve AND SUSTAIN any meaningful alignment of IT investments with business goals, needs and opportunities.

Not that I have any strong feelings about this... :-)

Interesting topic. At Serena we see a lot of interest from our customers in aligning at the front if the process: How to get the right demand in? How to assess value to the business? How to prioritize? How to triage and approve? How to balance IT capacity versus demand? ...

To support this we created tooling to support this, linking it to the application lifecycle process for monitoring and control

Eddy

Scott, great points, but how do you get management involved into the IT process? The problem is this:

At too high a level, management input becomes general and therefore vague, leading to relatively meaningless contribution. If the conversation becomes overly detailed, then management loses interest entirely.

So, how can an organization balance these issues to create a meaningful collaboration between the management and technical sides of the house?

Ben, In theory, of course you are right. But down in the trenches things are not always neat and tidy. Any practical advice for making this happen in a complicated organization where internal politics are the norm?

John Bagdanov made some fine points. I too have seen the three strategies John listed. However, I have never seen the first two strategies implemented successfully. Forcing Business Units to do things using IT as the "hammer and anvil" breeds resentment for the IT group. Allowing the Business Units to "go around" the IT group may force the IT group to support solutions they have no experience or stake in. The only strategy John mentioned that I have seen that has been successful is the IT Governance Steering Committee approach. I have used this approach successfully in many consulting engagements where IT, Management, and Business Units have differing priorities. Bringing all interested groups together to design the right solution, in my experience, has been the only successful strategy.

Rick Freeman, CISM - CGEIT - CISA

This comment exchange is quite fascinating. Thank you for posting this question Michael. For the past couple years I’ve been watching and interacting with industry leaders and came to the conclusion there is a shortage of balanced experience in IT Leadership. Many do not have the combined business and IT skills necessary to lead successful IT organizations. The lack of these skills creates a frustrating environment for IT staff and corporate citizens.

If I can get on my soap box, this is one of the key reasons for starting my company, IT Answers 4U. To help companies develop a Strategy and Roadmap to re-align IT with business objectives. As we read the above comments it’s clear there are many opinions on how to align IT to business goals. So how do we take the “opinions” out of the picture and proceed forward with a true re-alignment process? At IT Answers 4U we’ve taken a unique approach. We train existing IT leaders by guiding them through a five tiered framework. This removes the objectivity and opinions while enabling a structured process to lead the realignment.
To learn more about this innovative service, visit our website at www.ITAnswers4U.com

Hello,

I also agree that this is a quite a good thread initiated.

IT Alignment to Business is like JIT in Manufacturing. It is the need to provide the right IT architecture to address the business needs at the right time - Nothing more, nothing less.

Why I mentioned as JIT: The IT alignment is a generic term and the management needs to decide on how much data its going to capture and monitor for its results. For example, a SME could decide only to track the sales from each sales manager, while a big company could decide on to track and capture entire business process in the systems.

However its easier mentioned in theory than implementing it. There are varied reasons for the,if we call it, the mis-alignment - Business process changes, Technology adaptations, Software and Tools adaptations, Lack of knowledge etc.,

The best way to approach is to have a multi-pronged strategy which need to address the traditional change management process - ASIS - TOBE model.
The strategy need to include:
1) Business Process - How it is now and where the business wants to be heading in the future. It goes without saying the IT team or the IT Integrators (SMEs) need to understand the business and its way forward
2)The IT alignments to the existing processes, the gaps and the projected gaps in the IT adaptations to the business process.
3) The technology and architectural roadmap to ensure that the systems are adapted to the latest technology while working on the strategies

For each steps, there are several ways to proceed - Either by taking a tool to map the process to ideal situation OR by adopting to the Benchmark processes viz a viz AGILE, LEAN etc.,

Thanks,
Velan

I'm beginning to believe that I've got a singular view on this subject. This question has come up in several groups in several formats over the past several months and I continue to be amazed that I'm the only one with the opinion that the solution starts with the CEO. I've been solving this problem for clients for fifteen years (Interim CIO) using exactly the same approach and it starts with the CEO and the officers. I drag them kicking and screaming in most cases, into the world of IT. It takes some time, but by the third month and third meeting the CIO is in a position to say, alright gentleman, there you have it, dollars for keeping the lights on, new projects (showing owner, approved budget and schedule) and projects in the queue by officer. You guys set the priorities! Of those projects in the queue x are for you (by name) and 2 are recommendations I'm making for your benefit and 2 are corporate imperatives related to security and disaster recovery.

Now folks, the CEO has approved $X IT expense budget and $X IT capital. What would you like me to do, including a deeper review of my expenses, it's your call.

There may be other successful approaches, but none involve the CIO pushing the string up hill.

At the risk of sounding like I'm lecturing, if the CEO isn't willing to be the arbiter of conflicts with IT spending and priorities, the "corporate bully" and nearly every company has one, gets the lion's share rather than the investors. I can’t imagine any of the CEO’s I have worked with telling their Board that he couldn’t spare 2 hours a month to help leverage the company’s IT investments.

Jim Smith
CEO, Enterprise Management Group
www.emgc.com

Jim,

I totally agree with you in that the company's direction or the mission is arising from the CEO, who is the main stakeholder in most of the operations. In that way, the solution or the problem always comes from the CEO, who needs to ask the right question and to support the correct solution.

While its CEO's responsibility from the strategic point of IT Alignment (without which this cannot proceed), the tactical or immediate vision needs to be initiated by the CIO and the Business teams. Mainly the direction or vision provided by CEO needs to be adhered to, by the line managers and that is the key and challenge is what I believe.

Velan

There have been some interesting answers given here. In essence, IT/business alignment means marrying a company’s business objectives and goals with technology. The end goal is to increase effectiveness and the bottom line.

In our experience, there is too little communication between the IT departments and other business departments. Often, the IT department is placed in charge of buying or implementing a new system, however, they are given very little information and feedback from other departments who will be using the system, and don’t always understand the end business goals. Most times, the input of the end users is never sought out until AFTER the system is implemented. Unfortunately, this can result in much time and money spent, only to realize that the system will not do.

Thus, it is very important to talk through both technical and business aspects before introducing any new application, and make sure to include the input all affected departments.

Laura Engel
Intelestream Inc
www.intelestream.net

Laura,

Your comment raises a key issue: how do you foster communication so IT and the business can collaborate and work together.

Really, that's the essence of this problem!

Jim Smith's comments above are singuarly intelligent and to the point, and they mirror my experience. I'd add the point that companies without that CEO-level (and general senior management) interest and willingness are certainly plentiful, and that in many ways they CAN'T be fixed, unless and until the level of crisis reaches the danger zone. At that point, it often IS true that bringing in a senior interim CIO, to do precisely as Jim describes, is the only thing that breaks the logjam and causes meaningful change. I know; I've been there and done it. At that point, companies recognize that they actually have a problem and have committed reasonable priority and dollars to DOING something about it; often by this juncture, they've been through several senior technology executives in a relatively short time, and realize that maybe it isn't simply that they've hired the wrong CIO in the past and just need to find someone better.

Short of reaching that crisis point, the key to better communication IS embracing the basic processes of IT governance, effectively administered, and leading to joint, sober decision-making by a conglomerate of senior executives at the company. I've written about this at length, as has Steve Romero. It's hard work, not magic, and certainly not instant in its impact and results.

A lot of discussion here, so just a few tidbits from me:

1) Standards are important, for showing what basic costs would be if adhered to, but also to show what the costs of veering away from the standard would be. If the business requirements that needs the veer from standards make more than the cost, then everyone know that there is benefit. It just means the business has to accurately estimate benefits and then be tasked to deliver them, or make changes (perhaps back to standard).

2) the communication between business and IT can be simplified to having the business define "what" (not how) it needs technology to do to be successful, and IT needs to define the best "how" and the costs of delivering it. This is not easy, by any means, but it is where Business Analysts and effective requirements discovery can assist to to fill the communication gap.

First, I am glad as always for Michael's simple but profound inquiries. I am dually glad he was gracious enough to accept the non-"practical experience and examples" comments because it had led to some wonderful discussion and insights.

Other than retweeting the post and encouraging others to provide the examples Michael seeks, I will offer one other comment that is admittedly off-the-mark, but well intended.

Everyone interested in Michael's question should read "IT Savvy" by my heroes Peter Weill and Jeanne Ross of MIT CISR. The food in its meager 154 pages will inspire much thought.

Steve Romero, IT Governance Evangelist
http://community.ca.com/blogs/theitgovernanceevangelist/

Business/IT alignment has multiple dimensions, but I would like to focus on the most important one – strategic alignment. Balanced scorecard is a very good tool here. You include IT in the company strategic planning and ensure that the IT strategy is aligned with the business one in all the four balanced scorecard views – financial, customer, quality and employee. On the high level it means that the company objectives are cascaded down to IT in all the four areas, so that IT works in the company’s direction.

Once the objectives are properly cascaded, the strategies – programs and projects – are developed to support the objectives. Among others, this will ensure that only projects supporting the company strategy are initiated. Ideally IT and business plan together, so the IT/business projects are single activities delivering to the company objectives.
As an example, I can mention a project in a global company, which has decided to compete with unique products on the local markets. In such a case, the IT system supporting the product development, marketing and customer support cannot be a candidate for the global consolidation on the application level (still could be consolidated on the system level), but will be unique for each country. On the other hand, if the company strategy is to compete on price, business processes will be very likely consolidated and unified, so very likely IT will be consolidating across the world even on the application layer.

Another dimension is the operational alignment between business and IT. As an example I can mention alignment of the IT systems with Service Level Agreements. The SLA’s must be defined by business. Then the IT in terms of system and support people capacities and IT architecture must be aligned with these SLA’s. For example if the business process does not require business continuity in the case of a disaster, IT should not attempt to build a disaster recovery solution.

Vrata

Alignment in any business is a major issue at the moment whether it's with the IT, Marketing or Manufacturing functions. Part of the problem is that many corporate models stipulate that non-core functions are best left to expert service providers who typically will not have the same company culture or values as the company looking to outsource. The problem becomes even worse when the service remains in-house but the function is seen as an external service provider and ostracised from the prevailing corporate culture.

This is not an easy problem to resolve as lines of communication need to be re-established and for 'staff' to become valued colleagues again. This will mean breaking down barriers that stops colleagues communicating across functions and ensure that all functions co-operate fully on projects. Colleagues also need to understand the nature of the business and it's strategic goals and be engaged with their delivery.

On a practical level this means that any request for a new IT Service will need to have a much higher level of focus and input from the requesting area of the business and the accountability for the success of the Service remains with that function. IT will be responsible for it's delivery but if it gets rolled out and doesn't provide the business enhancements then the requesting area is culpable.

For any new initiative the following questions should all be answered positively

This project will;

Change the corporate culture for the better by

Improve customer experience by

Improve colleague experience by

Improve business performance by

The next step is to identify the resources required

Project Lead (Accountable)

Project Resources (Responsible)

Subject Matter Experts (Consulted)

Stakeholders (Informed)

This uses standard RACI terminology but makes it clear where responsibility and accountability lie at the outset.

As I said before this is not easy as it will often require a change in culture at the senior level but it will be worth the trip.

Richard,

You left out one of the most important questions, one that for me has resulted in many business requests being withdrawn. While answers to each of your suggested questions have a major bearing on the outcome of the project, the critical point should be verifying the results. In my project justification process, in the presence of the CEO (depending of course on the size of the project) the business person making the business case for the funding must also present the process by which the company will measure the results of the investment against the business case.

In most companies I've consulted for, there simply is no focus on measuring the results of IT investments. Clearly, some investments are made in the absence of a financial justification. Risk avoidance, security, regulatory, and safety etc., come to mind. If there's historically been no or little effort at reviewing the post implementation results, then the justification can be anything that is even remotely plausible because, "they'll never know".

You can discount just about everything in business, except human nature. If it's free, I'll take two, thank you.

If we consider that Technology is the competitive advantadge (premise), why not to align Business WITH Technology?

Now, in my opinion and from the business side, Business-IT looks to be unidirectional and Technology subordinated to Business

Could be reach a balanced and bidirectional relatioship?

Ben

I mean Business guys used to see IT guys as a support not peer to peer. A CIO last week told me they are at the end of value chain ...

Bidirectional is a conversation between Business and IT.

Ben, please consolidate your answers into one post vs. hi-jacking the entire discussion with multiple responses at one. Every time you make separate posts, we all get emails. It's not very user friendly. You don't need to respond.

Thanks. Michael.

Ben,

I know you think the discussion should have reached 100+ by now, but trying to get there by yourself isn't the way to go.

I agree with Michael Schmier and James Smith. Ben, please consider consolidating your posts. Perhaps once a day. Thanks in advance.

Ben, as the Focus Expert Advisor who started this conversation, I also request that you limit your post to one or two per day.

Now back to business....

So far, this conversation has elicited tremendous advice from smart folks. One clear message I take away is the notion that there seems to be no real answer, little concrete advice, and many opinions.

Given this, is the entire discussion of IT / business alignment even worthwhile, or are we just counting angels on heads of pins, so to speak?

Another good question Michael. Business alignment across all functional areas is vital and is very worthwhile. Twenty years ago or so most businesses were aligned and functioned a lot better than today with steady robust increases in profitability. I am afraid this is another opinion but long term planning needs to move from the current six months window to 18 months to 3 years. This will eliminate requests for services in 3 months, rushed outsource decisions that lead to failure and give employees something to look to for guidance. Only then will companies benefit from the positive collaboration that a truly aligned business brings. What we have today is internal competition and the only losers appear to be the customers.

Michael,

At the risk of sounding defensive, I can't agree with you that "there seems to be no real answer, little concrete advice", many opinions, yep that one sticks.

The difficulty with many of the social media discussions is that there are indeed many opinions and sadly, most are from consultants like us. However, when a consultant is willing to engage in a continuing dialogue giving specific recommendations that have consistently solved the challenge at hand, the discussion can move from opinions to actionable information.
Your dismissive comment would lead many to conclude that this discussion hasn't produced any value. I can assure you that the contribution I offered has worked in some of the most political and culturally bound companies in the nation and always with the same result. The CEO ends up leading the conversation and the officers together with the CIO make decisions on how best to allocate and leverage the company's IT investments to most directly support the strategy. The problem isn't about better project management. Finding good project managers isn't all that difficult and we all know there's no shortage of consultants offering to help, the critical question is what projects to initiate!

Other than running a question and answer session, I don't know how to be more helpful than that. And since there are probably few CEO's reading this, perhaps even that wouldn't help.

Nope, my approach isn't for every one, but I haven't found that one yet.

What do the readers think, any value anywhere in here?

Hello from a new Focus.com user - fascinating discussion. In our view, IT/Business alignment should not be the goal. The term "alignment" means that two disparate entities are trying to march down similar paths, in step with each other, when that's not what we want. I offer that IT/Business INTEGRATION is what we're after - two entities so tightly intertwined that the sum is greater than the parts, resulting in a completely enabled organization where every group is contributing to the organizational goal achievement. Semantics? Perhaps, and I am certainly open to discussion on that.

We also believe that there are two specific areas of technology that IT should be on top of that will foster that integration: Business Intelligence, and Business Process Management.

Business Intelligence: Helping the organization make better and faster business decisions - IT can be a hero through BI. See a recent HBR posting on "How Companies Can Make Better Decisions - Faster" - which, on the surface, has nothing to do with technology. http://blogs.hbr.org/video/2010/10/how-companies-can-make-better.html If you are a CIO and watch this video and a light bulb goes on - "I can create that environment and support that process with data and systems" - you are in the right mind-space already.

Business Process Management: Go to any department in the organization and find out where their choke points are - most every group has at least one. Conduct a business process analysis with that group, and come up with ways to implement systems that will make it easier for them to get work done. There may be easy answers within the systems you already support (like SharePoint and workflow, as a specific example), or you may have a situation so large that it will be worth investing in a Business Process Management system (like Global 360 which runs on top of SharePoint). Even if you've gone through a business process re-engineering effort years ago, it's worth doing the analysis to see if the business process is actually working, as we've found that many BPR efforts yielded processes that don't work or don't consider the way the user actually needs to do the work - so they get worked around.

When IT can offer the business real business results, the integration of IT and the business happens. In organizations where IT is not at the head table, the effective application of these two specific areas of technology can catapult IT right into one of those chairs. It's not an instant process, and for some organizations, the paradigm shift needs to start within the hearts and minds of the IT leadership team iteself. An IT leadership team must see itself as critical to the organizational goals and objectives - first.

I could go on - since I did not see these points in any of the prior answers, I thought this point of view might be valuable. Best to all and Happy Holidays!

Margaret Johnson
Oakwood Systems Group, Inc.
St. Louis, Missouri