Aligning IT with the Business
In the past 10 years of CIO surveys that I've seen, “align IT with the business” has been the number one challenge for IT. In a 2007 IDG survey of IT management at companies with an annual revenue of $250 million or more, 87 percent of U.S. respondents (75 percent globally) ranked “Aligning IT with business priorities” as the top IT priority for their organization in the next 12 months.
The question arises, does aligning IT with the business continue to be a challenge because it’s difficult to solve, or is it an issue of perception rather than an actual problem? Here are two opposing viewpoints:
The first view
The business has certain demands placed on it (by its shareholders, its directors, its board) and there are pressures put on it (competitive pressures, market pressures). And as a result they create a corporate strategy and a set of business objectives and business strategies that make them competitive in the marketplace. Those business objectives and business strategies will eventually become business initiatives. In today’s world, many of these business initiatives are going to be supported by IT.
Larger companies will have a number of business units, each of which will have multiple business initiatives of its own. The problem for IT is that all of them want all of their business initiatives addressed at the same time. And since IT has a limited budget, it must examine all these business initiatives and determine which ones to work on first. Instead of taking its lead from who is screaming loudest (or which business unit has more political clout in the organization), proponents of this view would use a collaborative process to look at all those business initiatives as a portfolio of initiatives and then prioritize and select which ones to invest in within IT, based on their business priority and the positive impact to the overall business. That process of IT portfolio management is the first step of aligning IT with the business--being able to set the IT strategic compass pointing in the same direction as the business strategic compass.
The opposite view
Proponents of this view are essentially saying “I am the CIO and I am intimately involved with the business and am part of the formulation of these business strategies, so by definition, I’m aligned already. And as a result, I already know the priorities based on the fact that I’m intimately part of the business, so there’s no need for me to take steps to align IT with the business.” This argument might be made by a CIO of a business unit in a federated model for IT (a CIO that’s responsible for a specific business unit), who believes that he has one master and that master is the business unit (or the line of business unit head), and because he’s directly aligned with everything that the line of business unit person does, there is no misalignment issue. Furthermore, many business unit CIOs report up to a central CIO who ultimately owns all of these budgets, who is probably on the board (or at least part of the executive leadership team) so in theory he should be aware of the business strategies and therefore there’s no misalignment issue.
I’ll be diving deeper into each of these viewpoints in subsequent posts. I encourage you to leave a comment with your own viewpoint!