Aligning IT with business goals
It is extremely significant for the IT vision to be aligned with the long range goals of the organization. The accounting department requires IT systems to have a good return value. This would be a direct correlation to the business goals that an organization has. Secondly, the long range goals can provide a stepping stone to the goal of the organization. If the organization requires that in 2010 that they need to be more power efficient, then they can have a certain goal. This goes into reason three which is any situation outside of specific business goals that require a business to function a certain way (namely governmental goals that require the business meet at a certain date). Organizations (public) need to also face the future of the business as many of the decisions can be considered “investor friendly”. This can ruin the reputation of the organization and the free market will do its bidding. One of the few drawbacks that I can think of is that the organization may lack uniqueness or “thinking outside of the box” when aligning itself to business goals. It can be tricky to properly balance the two and somtimes organizations can lack that uniqueness if they cannot think outside of the box. This is also a sticky situation for investment as many investors look for the new and fresh thing out.
September 13th, 2007 at 4:51 pm
In the almost 25 years we have been working on IT alignment with business, we have uncovered some consistent truths that no one (neither IT or business managers) wants to hear. This is the main reason for the consistent failure of IT to align with business. I say failure, because alignment has remained a top goal of both business and IT senior managers for about 15 years and yet the number of organizations that have achieved it IS very small.
The reason for this is not because the solution to getting IT and business aligned is complex. In fact, it is remarkably simple. That, however, does not mean it is easy to accomplish. In fact, it says easy but does extremely hard. This is because the solutions go against traditional thinking and traditional roles of IT and business.
All one has to do in order achieve and maintain alignment between IT and business is for IT and business managers to work together (partner) at every level of the organization. And, that those business/IT teams dynamically re-prioritize and re-examine to make sure IT projects are identified, designed, prioritized, and executed based on the business goals and that IT designs, resources, and implements IT projects in direct support of those current business projects.
To accomplish this, however, requires most managers to work in a way that is not within their comfort zone. This brings us to:
Failure reason #1: IT & Business managers must work as a team. Business managers determine the “what” and IT determines the “how”. Every IT project should have a business leader.
Failure reason #2: Successful alignment is not achieved based on what you spend on IT. It is NOT how much you spend but what you choose to spend it on.
Failure reason #3: Managerial, cultural and attitudinal roadblocks
Failure reason #4: Belief that IT is only a cost center and cannot make a difference in business outcomes (profit, market share, ROE, ROA, mission accomplishment).
Failure reason #5: IT credibility is the crux of successful alignment between IT and business.
Failure reason #6: IT needs to report at the correct level of the organization and be managed on the correct criteria.
Failure reason #7: Outsourcing IT is highly risky and makes alignment between IT and business even more difficult.
Failure reason #8: IT not involved with the business planning process.
For more about these failure factors