One of the top priorities for 2011-12 was Business-IT Alignment. 2013 focused on Big Data and Digitization- the big challenge. But a majority of 2013 still witnessed a very slow pace in technology changes in their organization. It seems to me that Business still not has connected to IT. IT in general has evolved from craftsmanship to a state of industrialization. You can describe that as moving from “many small shops to one large factory”. IT became a business within the business, so to speak. The era of digitization demands for e.g deep innovation beyond process optimization, more-integrated business and IT innovation, and a need for much faster and more agile capability.
Business-IT Alignment is still an issue
Why is Business-IT alignment still an issue? Have some of the executives not understood what´s going on? Of course they have understood, but the industries are in different mode. All industries in all geographies are affected by the digitization dragon and must adjust to that. But everyone cannot be an early adopter. Different industries are hit in varying extent pace due to varying competition. Competition is like a coin with two sides. One side is the customers and the other side is the enterprises. The same individual can act very differently within two different, but very close industries. Within these two different but close industries the industry maturity and business logic is also different. Here is the explanation – business logic and industry maturity. My conclusion of above is that the speed of connecting Business to IT: it is a matter of good timing but still a key issue is to get “more bang for the buck”. But how?
Key processes and mechanisms
- Start by putting the users (both internal and external) of the systems at the center for everything IT does and segmenting users in different segments. This might be a shift in mind set, but necessary. To exploit the momentum of this, a number of processes and mechanisms have to be established which integrate Business and IT.
- An integrated planning and budgeting is necessary. Business and IT must meet and sit together around the same table to make a joint long term plan. The long term plan shall be detailed stepwise. Planned projects must be ranked and synchronized with respect to affect goals and the architecture.
- Governance must assure that the right projects are started at the right time. An integrated development process (independently agile or water fall) must keep the executive attention all the way from project ideas to realized effects. When projects have delivered their solutions, everyone tends to move to the next project idea. To counter this inefficient acting, the following phase of effect realization must be as natural as the development project.
- Mechanisms assuring cost efficient IT service delivery are basic and a prerequisite in this context. The SLA-driven IT service delivery content must be determined and with annual efficiency requirements of at least 10%. The latter contributes to keep IT spending under control. A seamless infrastructural platform is fundamental for you to ramp up and ramp down your capacity according to the needs of development and sourcing.
Business-IT joint dialogue
Mechanisms linking decision makers in Business and IT in a multi-level dialogue is my last key recommendation. Decision makers on different levels must meet on a regular basis to discuss different issues on different time horizons. This is of course is done in most companies I visit. But the strategic joint dialogue within the Strategic Management team really makes the difference.
Business and IT key decision makers on different levels are members of the Strategic Transformation Team. It is through this dialogue that decision makers will find l the choices and decisions to be meaningful, understandable and sufficient – a prerequisite to bring them alive in the daily operation of business.