Concerned about IT/business alignment? Is your IT strategy a subsection of the business strategy or a separate document? How does it relate to the core business that your company carries out? If the relationship is hard to see, how do you make sure it provides your organisation with the IT it needs?
Members of the IT department of many organisations refer to ‘The Business’, as if they are a separate entity and not part of the whole. I've always wondered why this is and how to correct it to ensure that IT, or ‘business systems’ as I prefer to call it, goes much further than aligning itself with the business and becomes an integral part of the overall business.
In CIO's 2010 State of the CIO survey, most CIOs rated ‘aligning IT and business goals’ as their number one priority. I may be wrong, but I can’t help but think that if they are not aligned from the start, somebody must be doing something wrong. Nobody talks about finance-business alignment or marketing-business alignment, so why do organisations persist in talking about IT-business alignment as if they are two separate entities with little relationship to each other?
Many businesses seem to have separate IT strategies, which do not always directly align with the overall business strategy and which do not tend to be updated along with the changes to the strategy of the business they are working within.
So how do you get out of this cycle of alignment and into business where you belong?
Firstly, stop thinking about alignment and start thinking of the business as your own. If you were running the business, what would you need your systems to be doing for you? From my perspective IT needs to be at the heart of business, not a standalone separate entity.
Start with the strategy.
Your business has a strategy which will have several outcomes that it wants to achieve. You may also have an IT strategy document. Take a look at them both and work out how the IT strategy fits as a logical subsection of the main strategy. Think about the elements of the IT program that must be put into place to make the desired business outcomes become reality, and make sure that they are included in the IT strategy. At the strategy setting meetings, logical IT streams supporting the business outcomes need to be identified and to be specified.
Let’s say your organisation needs to gain greater visibility of their sales patterns to enable better decision making on product, pricing and so forth. The logical IT outcome from this may be as simple as ensuring that the analysts are properly trained on how to extract the data they need, or as complex as implementing a new point-of-sale system and reporting suite. If you understand what your business has in place and what it needs, the IT strategic elements start to fall into place fairly rapidly during the strategy sessions. The IT section of the business strategy you end up with should be a series of subsections relating to each part of the business and directly to their goals, objectives an the culture in place within the organisation.
There may need to be a subsection relating to infrastructure and maintenance. If properly handled with intelligent outsourcing and services arrangements, the infrastructure and maintenance services sections of the strategy become statements of the requirements for the services and provide a guideline for governing them. This treatment of IT extends beyond the strategy and into the policy and risk governance frameworks for your business. IT policies need to be integrated into the business' policy framework, not standalone policies. The main areas these mesh is with information access and usage and should cover paper and document management in addition to information systems.
Read more about IT leadership in CIO Australia’s Management category.
Establishing a risk governance framework that covers all risks facing the business. IT risks must be incorporated into the overall business risk governance. Ensure that you have senior IT representation at the risk governance committee and cover IT risks off in each business segment as well as overall infrastructure or operational risks. In our organisation we extend this paradigm into the budget process. There is an IT budget which is abstracted from the IT costs associated with each business unit and any centralised costs associated at a group level. The key is to ensure that each business unit has a clear line of sight of its IT costs and that it can control its expenditure on IT services.
It is inevitable that this may lead to issues around governance and control of architectural integrity. It is better, however, to have these arguments than arguments about how IT spends the business' money. Overcoming the issues takes good negotiation and influencing skills and a keen understanding of where it is important to draw the line in respect of controls.
Giving each business unit control of its costs develops accountability for the costs and, provided you establish good project governance around how the big ticket items are handled, the outcomes are likely to be better than attempting to centrally control all IT spending. That said, it is important to keep a global eye on the costs — abstracting out an IT-centric view from the general ledger and budget is essential in providing the best view of what the organisation is spending.
It also usually opens up the issue of the introduction of new technologies. An example is the introduction of Apple’s iPad. The device has introduced a level of demand from people within organisations — sometimes regardless of need — resulting in a lot of angst for IT risk managers. The only sensible approach is to ensure that you are on the front foot with these disruptive technologies; rather than putting a blanket ban on the devices, determine the real risks and develop structured, but flexible strategies for dealing with them.
Recognising that the technologies are not going to stop coming in the future and developing strategies to identify them early and determine adoption strategies is important, but make sure that it does not become simply a gadget playground for your architects. Putting structure into the introduction of disruptive technologies gives you a level of control over their adoption into your organisation and helps have meaningful conversations with the early adopters and gadget fiends within your business.
Running your infrastructure and operational IT like a business is probably the most important thing you can do as a CIO. It won't necessarily garner any great kudos, however making sure the ‘plumbing’ works is the essential ingredient to making life simpler. With the essential services in good operational order, your level of trust within the organisation rises and allows you to get on with helping your business generate income.
The other stream of activity that needs to be addressed is the services provided by IT and ensuring that your team is delivering services in such a way that they feel a level of ownership of the business unit they are working with. Giving your team an understanding of the business ownership paradigm will assist in orienting them towards providing services that focus on their customer business unit needs.
Having them work closely as business partners, rather than just service providers also gives them the satisfaction of working together on problems and issues that arise as part of doing business.
It is imperative that the IT service providers you use are also cognisant of the business impacts they can have and the contracts that you establish with them reflect these impacts. Contract structure can be critical to ensuring the right mix of carrot and stick to achieve the right outcomes.
Forging strong relationships with your management peers from around the business is the final key in successfully transitioning to being in business rather than being in IT. These relationships must be based on trust and on your record as a trusted ally in improving the business' performance.
Ensuring that the IT function is integral to the business and working as part of the business removes the pain of alignment, because your are already in lock step with the way the business is run. Trust development is critical in your quest to get out of the alignment and into business. If your management colleagues trust you to get the job done, then they are likely to trust you enough to be in business with you.
Grant Swinbourne is the former general manager for business systems with the Jetset Travelworld Group.