Align Business Value with IT for a Better Business Plan
(This is the fifth blog in the blog series, “What Keeps C-Level Execs Up at Night,” from Jeanette Prenger, president and CEO of ECCO Select.)
No longer just an ancillary or support function, a company’s IT department now serves as a primary driver of business strategy—a true make-or-break function within the enterprise. But if your IT strategy isn’t aligned with your overall company goals, it’s as if three tires on your car are heading in one direction and the fourth is in reverse.
To succeed, every IT project or initiative must find a way to add some level of value to the business. To do that, technology activities must be appropriately applied to company strategies in the right way at the right time—a state of perfect alignment. It’s not only getting that fourth wheel out of reverse but accelerating it to the same speed as the other three.
But is alignment easier said than done?
A strategic gap
A recent study by Lochan and Shah surveyed 500 senior execs and found that less than 20 percent of them felt like their IT investments were aligned with their overall business needs—despite enormous resources spent to achieve that.
Ahmed Elmorshidy, PhD, explains in The Journal of Applied Business Research:
“Trouble typically starts when business units hand off their strategy to IT at too high a level. The broad goals are not concrete enough to be converted into well-informed IT decisions. In response, the proposals IT develops are defined at too low a level—often as a one-year operating plan rather than a comprehensive program to reach a strategic destination.”
He posits that this disconnect happens because the IT and company strategies are not rooted in defined “business capabilities,” which he classifies as “specific skills to achieve competitive leadership.” Especially in the rapidly changing business world in which we all operate – complete with technology that changes even more quickly – these capabilities must be clearly defined to allow IT to be flexible enough to adapt.
But what if alignment is the wrong target to be shooting for? Nigel Fenwick, a former CIO and a principal analyst at Forrester Research, believes that success comes not from trying to align two separately created plans but instead creating a comprehensive business strategy with a technology component infused throughout. The former model, he says, creates what many business leaders describe as a “master-servant” relationship. He explains in an article in Information Week:
“It makes no sense to develop a business strategy isolated from technology considerations, since nearly all strategies depend in large part upon underlying technology assumptions. Developing a technology strategy as an afterthought lets business leaders off the hook for responsibility for technology.”
The traditional view always placed IT in the role of strategy implementation, only after senior management creates the plan. But this dynamic, as I think we all can recognize, is no longer viable. And any business executive still clinging to this antiquated model will be left behind.
Fenwick goes on to outline a step-by-step plan of his own to achieve this co-creation, but what strikes me is that we’re all pretty much saying the same thing: Technology needs to be not only at the table when the business plan is created, but it needs to be an equal voice in the conversation. IT can no longer work in a silo, concerned only with achieving IT-related metrics.
Then, IT and the overall business goals can have a more circular relationship: Data can help aid decision-making when creating the business strategies, which can then help create the technology roadmap to achieve those goals.
What’s a good way to work on that? Just as with your car, the right tools are essential, and as CIO, you have several to choose from. One of the best I’ve seen is drawn from The Open Group’s Architecture Framework (TOGAF). The Framework lays out a great set of tools, techniques and methodologies to incorporate into your Enterprise PMO and IT architecture practices. This helps identify and quantify business capabilities and technical capabilities, and how to marry them to create business value and reduce IT costs.
Another suggestion is to adopt an Agile methodology for IT development. Due to the nature of the business involvement within sprint activities, this will naturally foster participation by the business within IT development projects. Finally, I’ve found that introducing concepts from a Business Service Management (BSM) perspective moves the IT experience from an “order taker” to a true partner. An offshoot of IT Service Management best practices, BSM focuses on aligning IT services around a more “customer-centric” methodology and thus driving strategic partnering on future IT initiatives.
After all, once all four wheels are headed in the same direction, working together, you’ll be amazed at how fast you can reach your destination.
This is the fifth blog in the series, “What Keeps C-Level Execs Up at Night,” from Jeanette Hernandez Prenger, president and CEO of ECCO Select, a talent acquisition + advisory consulting company, specializing in people, process and technology solutions for our clients. ECCO’s experienced advisory consultants can help your organization with a variety of business challenges, including the creation of a business plan that incorporates IT and the highly effective methods developed under TOGAF. Let us know your thoughts on Facebook or on Twitter @ECCOSelectCORP.