The IT Alignment Paradox!

In 2007 a study was published by MIT Sloan (sloanreview.mit.edu) describing an interesting paradox how the spastic desire to reach full alignment between IT and the business ultimately led to more complexity and misalignment. At the end of this article you'll find a link to this study.

It starts by describing how in Charles Schwab & Co - a financial service company - business started to complain that IT had become slow and expensive. A familiar story isn't it? Money was thrown at the issue, leading to the company ultimately spending 18% of its revenue on IT.

While this study is over 10 years old - in the midst of movement like DevOPS - it is still so relevant to many companies!

The Alignment Trap

Studying the issue, the research discovered the following recurring pattern that led IT step into the alignment trap. It went like this:

• Technology is recognized as an enabler of success, and if business outcomes need to improve, we need to get technology and business objectives closer aligned.
• As a result, IT spend had to be linked to the company growth strategy and shared governance between business and IT for technology projects was a must.
• Business execs started to threaten that a lack of alignment can make IT irrelevant and ultimately lead to outsourcing the full shop. So alignment became a matter of survival for the CIO.
• Over time, business priorities started to take over, especially as IT often is a cost center , and the business was funding IT.
• As a result underlying complexities in applications, infrastructure and supporting systems were not getting enough funding to get addressed.
• Moreover - the situation got even worse: different divisions were driving independent initiatives, each one designed to address their own needs. IT - afraid to lose its funding, face and future - did not have the guts and power to highlight these these often conflicting needs.
• System choices were made solely taking individual business needs into account, picking best of class applications - whatever is at the top right hand Gartner quadrant is good.
• In addition - to show ever more alignment - IT departments started to provide dedicated resources, such as application developers and data centers, to each business unit. Also as a reaction to fight shadow IT teams that often were started threaten IT: "If you can't deliver, we'll do this ourselves".
• The results were: more overlapping systems that might have satisfied individual department initially, but did not advance the company’s business as a whole.

In summary: Complexity doesn’t magically disappear just because an IT organization learns to focus on aligned projects rather than less aligned ones. On the contrary, in some situations it can actually get worse.

"Aligning a poorly performing IT organization to the right business objectives still won’t get the objectives accomplished"

The results

When the dust settled, the CIO was fired and an even more expensive consultancy company was brought in; the report usually read like this:

• Too many overlapping systems
• Lack of standardization
• Lots of Legacy and Technical debt
• A complex IT organisation with overlapping responsibilities

Pave the way to a bright future

The road to happiness needs some loud and clear discussions in the boardroom. It starts with the recognition and support by the top that this can't continue and needs strong Technology leadership team to take you forcefully through the messy and bloody period that is ahead of you.

Before you start your journey you will have to prepare the battle ground in order to give your technology team a chance to clean-up things:

1. Kill all shadow IT teams overnight!
2. Remove the Technology recharge towards the business. Provide Technology with its own budget based on an agreed work program supporting corporate priorities. This makes Business and Technology equal partners and removes that hierarchical client-supplier relationship. This does not mean you should not provide full transparency of the costs of the services you run for them. If your business are good corporate citizens they should care!
3. Agree on a transition budget. Cleaning the mess costs money, extra funds that will only pay back on the mid term. So if the complaint that IT is too costly today, make your board realize that is only will get worse before it gets better!

The plan

Once you have the agreed the above you can start the recovery. It is all based by a relentless focus on efficiency and simplification through the following 8 steps to happiness.

1) Up-skill the technology workforce

There is a 100% correlation between the quality of the technology staff and the deliverables of the technology organisation. Your focus on this will pay off. Provide unlimited learning capabilities for your staff and ensure you have a compensation policy that enables your technology staff to have a long and successful career as an engineer.

While in the previous 100% business aligned structure, stakeholder management and good communications were seen as essential skills for your best IT staff, it no longer is going forward. Your highest paid staff probably were not engineers! Good talkers were dominating meetings.

Also, accept that in this new world, the backbone of your organization will be a small set of your top engineers. Understand that your best engineers often are much more introvert, or - as Ron van Kemenade CIO of ING bank told me - the best engineers are somewhat autistic!

For more details on this see the article below that I wrote on this topic:

2) Create a strong technology work culture

Engineer are like tomatoes; they need a fertile ground to grow fast and become shiny. That fertile ground at work is an encouraging work culture that makes all staff feel they contribute to the success of the organisation. Instill a culture that leads to an intrinsic motivation of all your staff where everyone can be him/herself, and fun is an essential part of the smell of the place.

See this article that I wrote on this topic some time ago:

PS: For those really interested in growing tomatoes see: https://bit.ly/2wf6HT5

3) Simplify the work force

If you realize that it are ultimately your engineering skills that will drive the future success of your organisation you may wish to weed out any functions that were added in the past, with focus on those that were added to manage that business alignment. 

Roles like Relationship Managers, Service Managers (oops my shop), Vendor Managers, People Managers probably form a large and expensive part of your staff costs. Review those thoroughly and only maintain the essential ones.

Review complex matrix relationships and understand the future is in teams that are self-managed. 

To help you clean up your management layer the following article provides much interesting provoking insights:

4) Simplify your technology landscape

If your ultimate goal is to remove the complexity and untangle the spaghetti ball that was created over time, several steps will have to be taken to get there.

Review your enterprise architecture

Mr Conway was so right and deserves a statue at the entrance of every large scale IT enterprise building.

Once you have simplified your organisation it's time your architecture goes through the same clean-up.

Over time I am sure you have added architects on architects and developed heavy architectures to solve specific business issues. This is one of the only areas where you may need external help as you own architects may be too emotionally attached to their technology babies. An example: Kill your Enterprise-Service-Bus and move to APIs for communications between your internal systems through an internal API Gateway!

Move to Platforms

I'm sure that in your business-led technology world the application choices were driven by a desire for best in class, and the best was usually whatever is in the top right corner of the Gartner quadrant. Gartner is responsible for so much mess!

So you ended up with a system landscape that resembles the dutch football team; multiple best in class systems (players), but little integration and usually poor adoption. Time to change!

Change your application strategy to a platform first strategy. Pick a set of platforms that meet most of the common requirements, that is maybe not best in class but that is fully integrated and plays football as Iceland does!

Agree your OOE (One Of Each) systems topology

A lean and mean systems topology does not need multiple systems that all do the same but that were bought because of individual business preferences. You only need one reporting platform, one authentication system, one contact centre, one case management solution. Agree on the One-Of-Each topology and migrate to that within the shortest possible time frame.

Call your Legacy Ghost busters!

Many companies are aware of the legacy and the technical debt they carry, but see it as a BAU (Business As Usual) activity to clean this up.

This will not get the job done!

Put your own Legacy Ghost buster team in place and let them eradicate all legacy and tech debt.

Ensure you properly incentivize them, provide them with their own budget and define aggressive KPI's as this is not the most desirable job!

A Seamless Employee experience

While all of this clean-up is on going in the IT kitchen, make sure you put proper focus on your employee interface. Over time the various business units probably came up with their own apps and applications for employees to engage with the company. Leave, Expense, Payroll, Benefits, Pension, etc..etc... are probably all different interfaces. Technology will gain lots of internal credit if that would all be simplified through a single interface.

5) Right Source your capabilities

Develop a work sourcing strategy that fits the priorities of the company and not an individual business unit. Agree what to build yourself and what the source externally. Next agree on the proper supply chain for these services. Over time a myriad of suppliers must have been contracted by the various businesses that should easily be rationalized.

The Gartner layered application model (OK Gartner ain't not that bad after all), may help you defining what to source and what to keep in house

6) Align Business and Technology deliverables

Next, critical review what activities your Technology team are undertaking. As they were order takers in the past, you will find they were asked to do things that really did not fit what you would expect to do in a technical team.

A typical example would be to see how much time you technology team are spending on business reporting. That is typically a deliverable from the business themselves and a skillset they have to develop. It is technology deliverable to ensure a proper reporting platform is available , that's it!

7) Create End-to-End accountabilities

Ensure that you establish proper end-to-end accountabilities for defined of corporate capabilities. This does not mean a full alignment that copies your business org chart, but aligns your business along similar capabilities. Example: All contact Centers will be served by your Contact Centre team.

This structure will have to align with a proper vertical technical alignment that support common technologies. Technologies like Authentication and Monitoring clearly have such a common vertical stretch overall business domains.

8) Have the proper Operational Support model

As head of operations you would not expect anything else from me. While delivery models are important, 90% of the application lifecycle they are in operations and often most of your OPEX end up spend in that phase. This needs to be set-up fully integrated with your deliverable model. For my essay on this passion of me see article below:

Hmmm isn't this alignment what DevOPS wants?

The smart reader of this article (there must be some) would probably say 'hang-on you now tell me to not align with the business while isn't his what DevOPS preaches? How do avoid falling into the same trap again?'.

That is correct, but as long as your agree on the proper foundation as described in the section 'Pave the Way...' and your technology alignment is not a copy of the organisation, but is aligned with common business capabilities, you have a chance to avoid the alignment trap!

Reference

Find below a link to the study I referred to in this article.

Arnaud is head of IT Service Management (Ops) at Emirates Airlines in Dubai. Within Emirates he is a strong an advocate of the DevOps movement and the  drive towards different ways of working. He leaves no opportunity untouched to help Emirates move into a DevOps Way Of Working!

This is the golden Age of Technology and organisational change. We should be proud to be part of it!

The opinions expressed in this article are Arnaud's own. He is probably wrong ?on most, but is so passionately about them, that (at least) he firmly believes them himself! Let the guy have that joy!