Understanding the business strategy is vital to adding real IT value. Here’s why…
I am loving an article on CIO.com by Martha Heller right now which opens with a great proposition – “How to strengthen IT’s connection to your business”.
I think that it’s crucial that this connection is strengthened.
The difference between firms that have aligned IT and business strategy and those that have not is quite stark. To be honest, you can usually tell after spending a really short time with them which category they fall into. Firms with aligned IT feel dynamic and agile, they feel current, connected and one step ahead of their own needs. Meanwhile, the ones who have not aligned the two are increasingly getting left behind – that’s the “or else” I referred to in my header.
Martha is the author of “Be the Business: CIOs in the New Era of IT” and as a CIO herself seems to really understand the importance of marrying IT with business goals. She also runs a US recruitment firm specialising in Chief Information Officers and so was perfectly placed to ask some searching questions when she surveyed CIOs recently. That survey provided some revealing answers, which she talks about in more depth in her article!
I suppose most interesting was the feedback from the question, “How knowledgeable is your IT team about their how their work drives business value?”
By now I would hope that positive responses to this would be high and, indeed, two thirds (66%) responded that their “business-facing” teams connect what they do with business strategy, but the rest of the IT organisation apparently …. not so much.
Less than a quarter (24%) said that everyone in IT is clear how their work relates to business goals …
… and a worrying 10% replied “Not at all. IT does not connect work with business value”.
10%! One in ten!
I’m a glass half full type of character and accept that this means nine of ten respondents think that their IT organisation gets it! BUT I’m also REALLY passionate about business IT delivering maximum business value – otherwise, what’s the point? To paraphrase my old geography teacher, I think we can do better…
Here’s why it matters.
Just about every business today relies on IT. In fact, most rely on IT to the extent that IT no longer simply supports business – In most cases, IT now IS the business. Essential, indispensable and inextricably linked to successful business outcomes.
NOW, there are seemingly infinite opportunities and benefits that this reliance on IT affords, BUT it does also present businesses with significant challenges. Business IT got REALLY good, but at the same time it got really complex, IT is now a web of interconnections, interdependencies … and potential risks.
When I started my career, an issue impacting IT could be contained within the IT department, most people within the organisation wouldn’t even have known (we got away with it!)… Now such an event can have an impact on your whole business. Things like a breach of security, failure of infrastructure, extended downtime, loss or corruption of data can all have serious consequences for your organisation’s reputation or its ability to achieve strategic business goals.
The point is, and at the risk of repeating myself, IT and your business are inextricably linked – your IT and business strategies need to be equally so.
The best thing is that when they are aligned, interwoven and pulling in the same direction, IT doesn’t just reduce risk … it drives growth. Market share, profitability, productivity, efficiency … you name it … just about any area where you would like to see it there will be a case study that demonstrates how business growth can be delivered by IT. In fact, most CIOs that I know are doing exactly this and becoming increasingly influential within their companies…
Of course, this isn’t necessarily a cutting edge idea. Whenever I talk about business/IT alignment as if it were something new, my friend always chimes in with an anecdote about when he worked in the buying department for a large UK department store chain. Each week the buyers would get a “Weekly Item Sales Analysis” or WISA, a dot matrix printout of what was selling and where which they would use to make purchasing choices. One week it was the head of IT (a CIO by today’s definition) who noticed an anomaly. One item was selling really well in a particular store but appallingly elsewhere, his suggestions that all the stock should be shipped there and that this item be re-ordered in huge quantities for this store resulted in phenomenal sales – they literally could not keep them on the shelves.
It was a data-driven, business-aligned purchasing decision.
It was 1989.
A CIO driving revenue almost 30 years ago!
So IT and business case alignment isn’t a new thing. What is new is the proliferation of solutions and it can be a confusing market to enter.
Anecdotally, I heard recently about a big UK media company that is about to switch to a new CRM system. The incoming system is less ‘sophisticated’ but does everything that the business needs, in fact, the greater simplicity actually suits the business better. It’s no-one’s fault that they picked ‘the wrong one’ … the business needed CRM, went to market and were sold a product … it is a vendor’s job to vend not always to advise! Often, an independent point of view that first takes into account actual business need and strategic goals before prescribing a solution can save time and money later on.
You have to know what “alignment” looks like so that you can find the right fit for your business. Start by asking the question, “What will it mean for the business?”
Alignment can also be a bit of a misnomer at times. Think of a railway, side by side you have two tracks, one Northbound and the other South. They run parallel, they are aligned, for miles and miles, but it is not until you reach a set of points that the two converge. Choosing business IT can be like this. Often businesses mistake matching a need with a system or process as alignment. Actually, it is not until business strategy and IT delivery converge that you leverage the greatest reward.
Strategic Business Analysts (BA) are great at recognising how to bridge this gap.
Business Analysts can be pivotal in aligning IT resources to business needs so that they do effectively merge. BAs not only have an understanding of business processes but they TOTALLY get how IT solutions can be best deployed to meet specific business needs.
One of the greatest barriers to alignment is that IT and business units tend to talk different languages, Strategic BAs sit between the business and IT playing the role of the translator! They build relationships between key business stakeholders and their IT counterparts. If you don’t have the budget for such a role, then BAs can be accessed “as a Service” like most Project Management functions, it’s certainly worth considering.
Take a look at your business and ask, “Are IT and the business on separate tracks?” Now is the time to address this if that is the case.
When IT (and I mean everyone in IT from in-house talent to PMaaS partners, from CIOs to Project Managers), when IT really understands the business strategy, the value it adds is way beyond the capability of ANY other department. I’m biased but it’s true. Aligning IT with strategy is literally transformational for business returns and culture. Making this your big plan for 2018 could be the best business choice you make. What are you waiting for?