Why Leaders Must Align IT Strategy with Business Strategy.. or else!

Today information technology has become a critical part of almost every department. Globally successful organisations are those that create one unified team from these seemingly disparate silos. Business strategy and IT strategy alignment can blend knowledge, skills, and resources so you can work smarter, not harder.

Businesses have high expectations for their technology investment, implemented technologies and systems must reduce costs, increase security and enhance productivity or improve workflows and communications.

But despite the critical role Information Technology strategy plays in business success, it often ends up as an afterthought to the business strategy, rather than forming an integral part of it. Often it is because the business sees IT as a separate entity, where technology drives investments instead of the business' goals or objectives. This divided approach is counterproductive, and usually only serves to increase the disconnect between the two.

 Why does the disconnect happen?

There are a few ways in which the disconnect between IT and the more extensive business can develop, here are the most common:

• IT departments do not have a clear picture of what's vital to the business.
• The business leadership may not see the real value in IT.
• Business leadership may be unwilling to replace or legacy technology.
• IT decisions are made independent of business decisions.

What is a useful alignment model?

Aligning business and IT strategies involves more than just combining. Under the alignment model, every aspect of the IT strategy should support the goals of the company.

The alignment model means that every IT-related investment, activity, service or project, must optimise or create value for the business. To further improve alignment, IT should aim to achieve business-related metrics, not IT-related ones.

That said strategy alignment is not the sole responsibility of IT. Business leadership teams must be aware of their IT resources. Something that is often neglected. The leadership team must also understand how IT plays a role in their business'' effectiveness, and how it can impact their competitiveness, including their speed of response to any market change.

The key to an aligned strategy is mutual leadership and accountability, IT must increase accountability for and visibility of their results, however, they must also hold the business accountable.

What are the tangible benefits of alignment?

Utilising an alignment model can help improve your business's performance, leading to more efficient processes, faster response times and more efficient supply chains. That is because all areas are working towards a common goal and are aware of what others are doing.

• All levels of the business are working towards common goals.
• IT supports the business, adds value and drives success.
• It's much easier to manage compliance and risk issues.
• Meets IT demands consistently and efficiently
• Increases the agility of the business and allows it to react to changes
• Creates more significant integrations and collaboration between departments

What are the potential drawbacks?

It's important to remember that alignment is not a one-off, box-ticking activity. It is something which requires regular reviews, assessments and adjustments.

Even businesses who achieve alignment can experience a disconnect over time. As needs and priorities change, other departments will react. They'll develop strategies which work for them but will have little thought to how they must adjust IT to support these developments.

If this continues, pain-points and organisational friction will arise. But the cause of this is rarely identified. The business strategy has developed, but IT has stagnated.

These four steps can enable you to position your business and IT alignment strategies:

• Plan: Translate business objectives into measurable IT services, to effectively allocate resources and maximise turnover and ROI – This step requires ongoing communication between business and IT leaders.
• Model: IT designs infrastructure to increase business value and optimise operations – IT must understand business needs and ensure that they are implementing systems critical to business services.
• Manage: Service is delivered based on company objectives and expectations – IT must act as a single point-of-service request, and prioritise those requests based on pre-defined priorities.
• Measure: Improvement of cross-organisation visibility and service level commitments – While metrics are essential, it is crucial that IT ensures a business context to what they are measuring and keeps a clear relationship between the measured parameter and business goals.

In short…

The Business leadership team need to review IT strategy alongside business strategy each quarter. Which helps determine how technology is helping – or hindering – growth.

Temporarily rotating IT employees within business operations is also a top strategy in reaching business and IT alignment because it circulates company knowledge. This cross-pollination encourages better relationships between the IT department and other silos and broadens skill-sets, especially for entry-level employees.

Better knowledge depth gives the organisation more flexibility with well-rounded employees who can fill various roles as demand arises.

Although aligning the IT and business strategy takes time and cooperation, it is an exercise worth completing. When IT is working to support business goals, it leads to happier, more productive teams, smarter investments and a higher return.