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Eleven keys for aligning IT with business strategy

especially for those who still believe that iT and business alignment is a worthwhile ambition…

Picture credit: Frizz

  1. The first principle of aligning IT with the business, is a crystal clear understanding of the business itself
  2. The most frequently overlooked aspect of IT strategy definition is the cultural analysis of the organisation.
  3. Understanding our value chains is paramount because these represent the relationships and the touch-points between the business functions and the IT estate.
  4. We need to know what pressures will shape and influence our business; perhaps imposing change upon us when we least welcome it.
  5. We must gather intelligence from a number of sources, both internal and external to determine how any change may affect our existing business functions, culture, IT estate and value chains.
  6. Successfully balancing sometime disparate needs is at the core of IT and business strategy alignment – and the bread and butter role of IT management
  7. Where necessary we must adjust our schedules to accommodate proper alignment with established resource cycles.
  8. Business units need to move at different speeds – so each business unit should have its own, dedicated, IT programme of work, showing when, where and why activity will be taking place.
  9. The golden rule is never to over-commit beyond actual capacity to deliver. If there are insufficient resources, or time available within the capacity horizon, either the task must be re-formulated, or the resource pattern altered.
  10. We must continually review all work in progress to see if our current plans have been impacted unexpectedly by changing circumstances – vigilance is just as important as vision.
  11. The essence of successful alignment between IT and the business strategy is based on effective understanding, communication, collaboration and mutual trust.

Copyright © Colin Beveridge 2009 All rights reserved :mrgreen:

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  • http://www.measuresw.com Grant (PG) Rule

    Hi Colin,

    You say that “The first principle… is a crystal clear understanding of the business itself”. But in my experience, few senior management teams have any clear, self-consistent understanding of their business. So which comes first, our choice of business outcomes or our choice of customers? Is it best to choose the kind of customers and customer needs which we want to address? Or better to decide upon the nature of our organisation and business strategy, and then find a market and customer base?

    Personally, I don’t think you can separate these questions… you have to resolve all the issues, and we can start by identifying all our expected stakeholders and understand the various values they expect.

    Once we understand what we and our stakeholders mean by ‘value’, we have some chance of envisioning a desired outcome, identifying the firm’s ‘True North’ and establishing strategic goals. And some chance of aligning activities, including IT/IS investments, with the ‘True North’ direction.

    Your 2nd point concerns culture. I agree that is important. But I believe culture is a result of the behaviour of the senior decision makers. If they are reactive, rather than proactive, or base decisions on opinions rather than facts & evidence, then the workforce will follow suite. The firm’s culture has to be nurtured and modified to be proactive, innovative, ambitious, constantly improving, fact-driven… and to align with the stakeholders’ value perspectives and demands. Developing the firm’s culture is one of senior management’s crucial tasks, best achieved by example. We don’t have to take culture as a given.

    If senior management does develop and support a culture of continuous improvement (and only they can do so) then it is feasible to systematically increase the capacity to deliver value for less waste (while avoiding over-commitment). Dr. Taiichi Ohno is famous for consistently ‘rewarding’ the achievement of process performance goals by removing 10% of a group’s resources, and challenging them to sustain production volumes and quality as before. He didn’t say how, just suggested what. Invariably, the group found sufficient waste that could be removed to meet Ohno’s demand.

    My point is, you don’t need to build waste into your value stream in order to avoid over-commitment. But you do need an expert engineering workshop, focused on delivering customer value & new know-how, and capable of responsibility-based planning.

    Best regards,
    Grant Rule
    MD, Software Measurement Services Ltd.

  • terence freedman

    My earlier consultant experience is that many clients bought systems off the shelf without thought of a list of requirements. There was clear evidence of purchasing a soi-disant best of breed system at a trade exhibition. So before alignment we need to elicit the requirements.

    This assumes that the owners/directors/managers of an enterprise have a realistic grasp of running a business which has not always been the case.

  • http://globalentrepreneurship.wordpress.com Mario Luis Tavares Ferreira

    Hi Colin,

    Again, another great post and vision. Yes!

    The 9th Key make me remember the Constraints Theory, from Goldratt. It is perfect and fundamental, besides all other keys.

    Cheers,
    Mario

  • Ian Jones

    Hi Colin,

    Beautifully summarised and as you know, much
    easier to describe than to get done.

    Grant’s point on culture is confirmed by a recent
    Harvard Business School Survey,that showed a majority
    of U.S. based enterprises were run according to the preferences of the senior executive group.

    Changing those preferences makes the courage and stamina of
    spawning salmon,seem relatively ordinary