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Five IT and Business Strategy Alignment Considerations

Five IT and Business Strategy Alignment Considerations June 21, 2019Leave a comment

I’ve noticed a trend over the last few years around the democratization of strategy and it’s effect of IT and Business strategy misalignment. Not “Big S” strategy, but rather the explosion of all sorts of “small s” strategies. Cloud Governance strategies, Enterprise Architecture strategies, DevOps strategies, Customer and User Experience strategies and on and on. It’s enough to make even the most technically savvy and ambitious CIO’s head spin (when it’s not shaking with bewilderment and frustration) over the pervasiveness of strategy sprawl in IT and across the business. Supporting and integrating multiple IT strategies with business strategies requires a few key elements. First is executive alignment and support. If the C-suite isn’t aligned and bought in IT is in a weakened position to adequately assess and support Demand. Secondly, strong vendor management is important in ensuring technical requirements and tooling satisfies business requirements without being over-engineered or redundant. A third consideration is how IT plans and budgets for evolving business Demand. Without adopting and maturing an IT Business Management capability, leaders aren’t able to justify and allocate costs that gives them the “Bill of IT”. The fourth area to examine is how you interact with users and stakeholders. Do you have a scalable and repeatable process that insures users are engaged and their issues understood? Let’s look at each area in a bit more detail and consider how adopting each can align and optimize IT and business strategies. 

  1. Leadership alignment matters. In some organizations CIO’s report directly to the CEO. In others, the CIO reports to the CFO. In many cases, if the CFO has an Accounting background, IT is more likely to be viewed as a cost center and fulfillment organization rather than as a strategic partner responsible for driving innovation and change. The CIO may not have the ability to connect IT strategy to business strategy from a planning and budgeting perspective and the strategy just “happens to them” rather than them having a seat at the table and articulating IT capability and capacity requirements in order to proactively enable the strategy. If on the other hand, the CFO has a Finance background, it often increases the investment and risk tolerance leadership has with an understanding that IT investments are investments in the future of the business. Ideally, the CIO is on equal footing with other C-suite colleagues and reports directly to the CEO. This gives CIO’s the best chance to understand and closely correlate IT objectives and strategies to business strategies. Be mindful of your reporting structure and how it may be inhibiting IT performance.
  • Vendor Risk Management is fast becoming a standard best practice in many Enterprises. IT leaders are constantly bombarded with new tool vendors and products with competing as well as overlapping capabilities and feature/functionality. A solid IT Strategy incorporates vendor and tool evaluation and management to control costs while still delivering a timely and high-quality product to users. If you don’t have a strong vendor management strategy in place, chances are you have significant associated costs and your toolset may either have missing components or redundant functionality to support business initiatives. User appetite for Applications and SW Platforms continue to increase as users flock to SaaS solutions hoping for a panacea only to become frustrated when implementations fail, upgrades break due to customization and IT costs increase due to over-provisioning. Having a strong Vendor Governance program can reduce and eliminate many of these costs and risks and better align business needs to technical and tooling requirements.  
  • IT Business Management is a must-have for IT Practitioners to fully understand the impact and value IT is providing. If services are poorly defined and the bundled IT products and services that comprise them aren’t monetized, CIO’s face a losing battle when petitioning for budgets due to the inability to detail consumption costs of IT assets. Organizations must able to allocate costs via showback or chargeback to increase accountability and drive informed decision-making when it comes to IT spend and further investments. Establishing an IT Business Management strategy not only surfaces opportunities for improvement but can also reduce operational costs and waste allowing funds to be re-purposed for innovation and transformation. Opportunities for IT Leaders to increase their standing within the business depends on the ability to articulate how much IT is able to specify delivery and support costs associated with the execution of a particular initiative or strategy. This is also critical to informing staffing and other resource capacity needs and drives to the heart of recurring IT budget concerns. Being able to say “no” with numbers is a capability that every IT leader needs.
  • Users and Stakeholders hold the keys to success and failure. If you don’t involve them and they aren’t at the center of the solution you’re buying or building, your setting yourself up for cost overruns, slow/no adoption and further credibility hits. It seems like common sense, but still all too often, business and user requirements are glossed over, and products are rolled out with much fanfare “on time and on budget” but with very little actual chance of helping users perform their everyday jobs faster or more effectively. If IT doesn’t speak the language of business and understand how to document and map business requirements to technical requirements this will continue to be an issue. Business Relationship Managers bridge the gap between User Demand and Requests, stabilize and prioritize backlog in a way that balances demand with IT capacity, costs and capabilities.  If you have a high initiative failure rate, consider examining (or adopting if you don’t have one) your user and stakeholder engagement strategy. Do users have an advocate in IT that understands their needs? Are they being proactively involved and have a voice in how their requests are fulfilled?
  • Strategic Roadmaps serve as the guideposts for strategy execution and are the tangible touchstones that keep projects and teams aligned to a course of action. The problem is, there’s too many of them.  How many IT strategic roadmaps should there be? The answer is 1. If done correctly the IT roadmap should be designed and fielded for one purpose and one purpose only—to support and enable the overall organizational vision, mission and objectives. As organizational objectives shift based on changing business conditions, so too should IT roadmaps be flexible and iterative to change to support new objectives. Every technology, process or new initiative should be evaluated and incorporated with the question “How does this support and align with stated organizational objectives”? Only when that question can be definitively answered and with proper approvals should it be green-lighted and incorporated into the IT strategic roadmap.

In summary, be mindful of organizational structure as it can and does influence IT’s role in the business. Do proper diligence on vendors and the solutions they provide. Avoid redundancy and challenge vendor financial assumptions that overpromise and underdeliver ROI and long-term results. Embrace IT Business Management and cost transparency. It will increase fiscal accountability and improve decision making around resource allocation. Never forget users and business stakeholders. They are central to IT’s success. IT exists to help and enable users to perform their everyday tasks in as optimized and automated of a fashion as possible. Lastly, rethink your IT strategic roadmap. Does it clearly illustrate how IT enables business goals or is it a hodge-podge of technology implementations that isn’t easily understood and connected to business objectives?

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