Abraham Maslow – the American psychologist better known for creating Maslow’s Hierarchy of Needs – once stated: “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” I have certainly observed this phenomenon in more than one organization. Someone identifies a need and IT offers a computerized solution to address the need. What often happens is that in an effort to help the business IT takes an existing software solution and expands its capabilities. Usually this happens with applications that are highly configurable. Over time, the applications configuration becomes so extensive and complex that it becomes a burden.
Let me use an example to illustrate:
In an effort to support the Product Engineering organization’s goal to accelerate R&D and improve its chances for successful product launches, the IT organization decided to use an existing ERP platform to configure a number of “new” modules for product analytics. As you may know, ERP applications are very transactional in nature – process and order, issue the work order, manufacture the product, ship it to the customer, produce an invoice, collect payment. Even SAP and Oracle rely on Business Intelligence tools to run sales forecasts and perform data analysis.
Over time the ERP platform became bastardized. It became difficult to upgrade because of the amount of changes it went through and the Product Engineering organization became overly-reliant on the application, making it difficult to replace.
The company’s strategy throughout its 40-year history was one of making money buying and selling other organizations; they would buy a company and run it for its profit then sell it when it became no longer profitable. Ten years ago they decided to change their strategy; they divested from every business except medical devices. Whatever companies they were to buy would have to be one that either complemented or extended the company’s existing product lines. To execute this strategy the company had to be able to absorb newly-purchased organizations as quickly as possible.
If you were a member of the IT Strategic Development Team for the company, how would you align the IT organization’s strategy with that of the company’s?
Hint: think about IT processes, policies, procedures, services, standards, organization.
If I were a member of the IT Strategic Team, I would try and do a couple different things to align IT and business strategies.
1. Understand the business objectives and strategy: This is an important concept to understand especially for IT because business objectives are the measurable accomplishments the business is trying to achieve. In order to achieve business objectives, companies must accept projects and prioritize them according to what the most critical needs are. Because IT is an enabler to meet business objectives, any projects IT teams have can be prioritized according to the prioritized business projects and outcomes.
2. Make sure IT can meet business objectives: In order to better prepare to meet business objectives, an analysis of the current IT environment is important to make sure it can meet the business objectives of the business. It is critical that an assessment of IT is done and all assets, applications, and resources are identified within the current environment. If the current environment will not meet the business objectives, more investment may be needed to bring IT in line with what the business is looking to do.
3. Set Metrics: Since IT is a value added resource for the core business, a good way to align IT with the business is to set metrics on success for each IT product undertaken. Things that can potentially be measured are how much revenue the IT initiative helped to generate, what the costs were, and productivity level as a result of the initiative. If IT is lacking in the metrics, it may not be properly aligned with what the business wants to do. In this case, business and IT leaders can work together to build a more stable “roadmap” of where and IT fits into achieving business objectives.
Thank you for your sharing. Yes, you are right, and I did not mention in my part is knowing about the business objectives and strategy. Actually, it is important step to make the IT strategy aligns with the company’s strategy. We can simplify the this step into four questions: What is our business strategy? What we need? What we have? and How we adjust?
Great point Sarush. I agree with you that it is important to understand the business objectives and strategy. At the business level, writing objectives is a process that requires an owner and employees to set organizational priorities. At the level of employees, writing objectives forces the business to outline more concretely how priorities will be met.
I agree with you, because it is important for employees in the organization to understand to business objectives. They will have right actions if they are aware of the importance of business objective.
I agree with you. Finally, Adjust IT Strategy is important. It is essential that we keep track of the changing business world – both internal and external – and make sure our solutions are in line. If they are not, then senior leadership has the responsibility to ensure that we do not continue those initiatives that are not. Putting good money after bad is never a good idea. CIOs are paid to make these tough decisions.
Good points, Sarush.
I agree with you. The understanding of the business is the basic to achieve the IT strategic alignment. Without knowing the business, there is no way to conduct the alignment. It should be the primary consideration when implementing the alignment processes.
Thanks for sharing your points, especially your point on understanding objectives and strategy. In my opinion, this basic understanding helps to ensure that IT can begin to be aligned with the company. Until that understanding is in place, its hard to imagine what IS projects can be rolled out to truly add value to the company.
Hi Sarush,
Great response! I think it is important for quantitative metrics to be set for IT projects. However, the nature of this company’s business strategy makes me wonder how metrics will be set in the IT environment for the acquisition, expanding, and reselling of IT infrastructure. Moreover, will this metric tracking come at a cost to the business?
Great point. If employees do not understand their company’s cultures and strategies. The work they are doing would become non sense and off-tracked.
Setting the metrics are a great idea. I didn’t notice that many people saying it ever skim through including myself. But metrics create real world goals that are obtainable and allows people to set up rally points around. Great call.
If you were a member of the IT Strategic Development Team for the company, I would take the following steps toto align the objects of IT and company.
1. Administrative integration- that indicates that there is a little or no effort from the IT to support the business objectives.
2.Sequential integration- which means that the business plan has one-way relationship when providing general direction for the IT plan.
3. Reciprocal integration- which means that there is a two-way relationship between Business and IT plan.
4. Full integration-. Means that IT and Business plan developed at the same time.
Reference: https://www.infotech.com/optimizeit/business-it-strategic-alignment
Egos and company politics can derail alignment efforts. An outside expert brings objectivity to the table, and he or she can help the organization identify the areas to work on.A third party consultant would be able to show executive leadership precisely how much this costs year to year –right down to the added electricity costs.
One additional point mentioned in your resource I think is important: IT Alignment should be revisited periodically, at least annually, or when there is a significant change in corporate direction.
Good point Jing. IT is developing rapidly, it is necessary to be revisited periodically.
Thats a really great point. and also the IT strategy and policies.
These are good points you made. Like I mentioned before an it takes a fresh eye, someone with an outside perspective to help the organization faces the challenges of misalignment. I also took a look at your infotech link about Business – IT Strategic Alignment. Great article. Thanks for sharing
I think the methods of integration you mentioned above for different ways IT and the business can be woven are great. I think going with reciprocal integration would be the best idea for this type of scenario.
Thanks for your point on reciprocal integration. As I’ve mentioned in other posts, in my professional experience, I’ve seen this approach – which includes, in my opinion, enhanced communication between parties – work very well. If planning is taking place to include IT and business objectives, I feel that alignment can truly begin to take place under those circumstances.
IT should approach each acquisition like a project. They will need to identify what are the expectations from the decision makers on how fast and to what degree the new company will need to integrate with theirs. They should also do a risk analysis on each acquisition to understand the likely issues that can affect integration. Integration timelines and cost proposals should be presented in the acquisition process so that the decision makers can calculate the cost of integrating IT into the overall value of the company. There may be some length of time or cost to integrate that the company may not want to undertake even if all other aspects of the acquisition seem favorable.
IT should also strengthen policies and controls within their primary systems. Personnel should be instructed to treat the acquisition IT infrastructure with caution as if it has the ability to harm the primary infrastructure until it has been properly and securely integrated. The goal should be to integrate the acquisition IT infrastructure as quickly as possible while maintaining security and prioritizing accessibility.
Hi Jason,
I think your point about doing a risk analysis to understand the affects that will occur in the integration stages is a good observation. Doing a risk analysis really helps the organization understand if the project they are considering is worth undertaking.
Security is also a good point. Protecting against exterior penetration can happen if the foundation within a company is soled.
Hi Jason,
I am in support of your idea of having the IT department strengthen its policies and controls with its primary system. As mentioned in my post, I would strongly suggest it will be in the best interest the IT managers and directors to ensure all that the IT infrastructure of all potential acquisitions are examined by an external auditor prior to finalizing the acquisition. In this case, the systems of the company can be assessed and the level of if integration needed can be incorporated in a cost-benefit analysis.
Great analysis Jason. Most probably the reason why IT did not do a good job was they misunderstood the business strategy of being able to absorb newly-purchased organizations as quickly as possible. As you rightly said, acquisitions should be treated like a project. IT in this case just decided to use an existing ERP platform to configure a number of “new” modules for product analytics. They failed to do a proper research on the future expectations of the business. Agility is a very important factor that needs to be taken into consideration when doing major system changes like that or acquiring new IT architecture. If they could just get the strategy right at the word ‘go’, it will make the integration of new purchased organizations a smooth process that will deliver value to the business.
Many organizations still perceive IT as simply an expense rather than a tool to help the organization achieve its strategy and goals. As a member of the IT Strategic Development Team, I would work diligently to ensure that IT is a part of the organization’s strategic and project planning. Furthermore, working to ensure that this relationship is maintained, even if organization priorities shift. By doing so, I can verify that even as changes are happening in the other areas of the organization (e.g. marketing, sales, supply chain, etc.) IT is not an “afterthought” and can instead be up to speed with organizational changes. I would also make sure that I have adequate insight into what is going on in these departments and how they relate to the organization’s strategy and goals. Once I have a true understanding of the operations effect on the strategy, I will be able to better determine how IT aligns with the organization’s strategy as well and where improvements can be made. These improvements may include restructuring IT to better suit the organization’s strategy.
I would also work with the organization’s leadership and have them conduct consistent (i.e. quarterly) reviews of the IT strategy to ensure alignment. Reviewing the strategy should be viewed as an ongoing process, between all departments, in order to maintain strategic alignment. An organization’s strategy is constantly changing. It is important that these strategic changes are being implemented across all departments rather than in piecemeal.
Thank you for your sharing. You got same idea with me that we need to adjust the IT strategy timely. Like you said, IT is tool to help company achieve their strategy and goal. How strong and how efficient tool we have, how easily for the company to achieve this goal. You also mention about the changing condition, it also affects how we decide to adjust the IT strategy.
Nice point Lyana. I like you said that “IT is not an “afterthought” .” I agree with you that an organization’s strategy is constantly changing, Therefore, we need to frequently review and adjust the IT strategy to avoid the operational inefficiency.
Hi Iyana
I like your point about IT being seen as an expense rather than a tool to help the organization. Like Xiaomin Dong said, IT shouldn’t be an afterthought, but rather a consistent alignment with the business strategy throughout the changes an organization goes through.
Iyana,
I see your point that many organizations still view IT as a necessary suite of tools, rather than a division of the business equipped with great minds and resources that can help in meeting business objectives. I also happen to feel that your view on regular follow ups between IT and management to ensure alignment is especially wise. In my personal experience, stronger communication internally can conquer most divides and usually bring about an enhanced result on the other side.
Thanks for sharing.
Hi Iyana,
I like your point on ensuring that the relationship between the IT strategy and the business strategy is continuously and consistently maintained. I think this feature is often overlooked although it is important as the planning and implementation of the strategy.
I definitely agree with the fact that some companies view IT as an expense, but it definitely a necessary one. If I were in a company like that, I would definitely go to the right lengths to convince the higher-ups that IT could be a very useful asset and can promote company growth.
Hi James,
I agree. I think when an organization follows a top down planning approach it becomes much easier to convince higher ups that IT is useful for the organization overall. Planning initiatives are viewed from the “top” and there is generally increased management acceptance of the role of information systems in helping them achieve business objectives.
Most time IT decisions are made with little understanding of business goal while business executives view IT as a cost center. This misunderstanding or disconnect brings about misalignment of strategies and goals which is detrimental to the success of a business.
If I was a member of the IT Strategic Development Team for the company, I will encourage a review of the current business strategy plan, inquire from other stakeholders (business or department managers) of the strategy, and assess how the business intend to achieve its goal.
Once IT understands the business strategy and intend to achieve its goal, an IT strategy will be designed to suit(support) the business strategy. IT will set its priority to support the business plan and IT should be included in designing business strategies and implementing the plan.
This alignment is not an event, but a process – a continuous process.
The key success factor for aligning IT strategy with business needs is mutual leadership and accountability. Business leaders need to lead IT and CIOs in the same direction.
That is true, but the are situations where business leaders do not know the effect or importance of IT assets. they focus on return(profit).
Can they ably lead the IT development and CIO or there should always be room or allowance for expert to use their expertise for the good of the company?
Business leaders? CEO? honestly they do not care anything about the IT department. Like what you said, the most important for them is ROI. Unless IT department make big problem and make them to pay responsibility.
Pascal you mentioned a very crucial point of stakeholder involvement in IT strategy planning. Business and senior management should be involved in the alignment of IT strategy with the current and future needs of the business. As you said IT is viewed as a cost, its high time that organization’s view IT not only as an enabler of the business strategy but as an integral part of business strategy. IT should not be learning about the business strategy after its in place, it’s important that are also involved when the business is developing its strategy.
Good point Karabo,
That way IT is not a stranger to the business strategy. Even before the strategy kicks off, IT understands where the department stands. Then based on the business strategy for its goal, IT strategy is developed to support the business achieve its goals.
Great point.
Pascal,
I agree. IT strategy is about alignment with the business and making sure we understand what the business is looking to achieve and ensure that IT will be ready to provide those needs. IT should understand the direction of the company, and have defined target IT capabilities. As you stated this is an ongoing process, and I believe continued communication is necessary.
Everyone,
During an event where the company needs a software, the IT department recommends a vendor and a software, but key business executives are interested in acquiring a software which is not as duration and sufficient as the company needs. Basically, the IT department and business executive disagree on the software and vendor.
Should the business executive decide or the IT department? If there is steering committee that comprises more of business executives, majority vote will be in favor of the business executive. Can the board of director step in or is it just okay to allow the decision of the business executive as the IT department should be supporting business goal?
The key success factor for aligning IT strategy with business needs is mutual leadership and accountability. Business leaders need to lead IT and CIOs in the same direction.
I feel that both IT and Business professionals need to come to a consensus before the project even begins. In a book I am reading a quote that I found interesting is “consensus does not mean everyone agrees, it means everyone can support the solution.” This is important for both business and IT professionals to remember especially during initial phases of a project but even during the duration until completion whenever a decision needs to be made.
I think that mutual leadership also plays a great role in terms of IT and business objectives in the same direction. Like Ami said, both of them should come together to an agreement even before the project starts.
True, there should be an agreement or consensus before the project starts.
If the situation exist where there is not a consensus, or some business executive will not except the CIO or IT department recommendation, meanwhile IT should be supporting business goal, should the IT department decline participation in the project or just go with the flow knowing that the project will fail?
It might be a rare scenario, but if it ever happens what will be the resolution. Like the CIO know the project will surely fail and some business executive are pushing implementation because of personal reason.
I think in a case like this it is important to develop criteria and the true organizational requirements of the software to evaluate it. Otherwise it will be hard to come to any type of consensus between IT and the business executives. While everyone’s evaluations will differ, these differences may bring up some important points that one side had not previously thought off. I have often worked with company’s where internally they could not agree on a vendor to supply a certain solution. We would develop an RFP and then create scorecards to evaluate these vendors. While the client would sometimes not choose the “top scoring” vendor, it helped to bring a lot of valuable discussion into the project.
Hi Pascal,
Great scenario! This happens often and it is important to keep in mind that IT must align with the business’s objectives. Therefore, if the C-level executives insist on implementing a system that may fail in the near future then we as IT professional must allow them to make the best choice for the organization. However, it is vital that the CIO point the pro and cons of the implementation.
Here are the eight steps to help us make the IT strategy aligns with Company’s strategy:
1. Identify Business Drivers-in this step, we need to know about what we need in business to drive IT;
2. Create IT Vision-in this step, we should give a plan to IT, to see what IT Capability (strategy, process, infrastructure and organization) we need,
3. Assess Current Alignment-compare current IT Capability with the envisioned IT Capability in three dimensions of alignment – investment, asset and organization,
4. Identify Alignment Gaps-to figure the gap between what we want and what we have,
5. Prioritize IT Initiatives-because of the ability limitation of each company, many gap fix plan can not be carried out, we should decide what should we do first,
6. Evaluate Implementation Options-to make sure all you steps follow your plan,
7. Create Migration Plan-This step creates a migration plan for the IT roadmap – steps, deliverable, responsibility, timing,
8. Adjust IT Strategy-because the condition is changing everyday, we should make adjust the IT strategy to fit the situation.
https://www.cioindex.com/article/articleid/18/7-steps-to-business-and-it-alignment
good points. let’s talk about CIO. Today, however, technology has officially crept into every corner of business. As a result, every department has its own technology demands and the potential for IT budgets to grow unchecked has skyrocketed. These changes have led business leaders to require more and more technology related leadership and advice to help drive the strategic decision-making process.
In many cases, despite a company’s dependence upon technology, the CIO continues to be excluded from strategy sessions. He or she does not have adequate visibility into what’s happening in the marketing department, the shipping department, or customer service, even though the CIO oversees IT operations supporting those departments. Despite the importance of technology in daily operations, CIOs without a seat at the planning table have little of the necessary insight to make technology decisions that support organizational initiatives.
Well said Hanqing, it is really clear and concise to understand. It is essential that we keep track of the changing business world – both internal and external – and make sure our solutions are in line. If they are not, then senior leadership has the responsibility to ensure that we do not continue those initiatives that are not. Putting good money after bad is never a good idea. CIOs are paid to make these tough decisions.
I agree with you, because it is important to understand what we exactly need on IT perspective. All the IT investment for a organization should be included on enterprise architecture. it is used to make sure what we need, It is an important step to allocate IT resources.
Hanqing, you provide a great and detailed information on the alignment of business and IT. Actually, the goal of perfect alignment is very complex and hard to achieve because the continuous changing environment (e.g. information technology, finances, competitiveness). However, the alignment may add incredible value into the organization and help to achieve the business goal more effectively. The value should be communicated throughout the organization to facilitate the alignment processes.
Hi Hanqing,
These are well-written steps to aligning an IT strategy to a business strategy. I think one of the most important ones (if not the most important) is to create an IT vision. This is because without understanding the vision of the department it will very difficult to understand how to govern and have policies that are in line with it. This poses a risk to the operations of the company.
Thank you for your sharing. You really gave us a lot of detailed information. You break the information into 8 steps and it really helpful for us to understand it. I like what you said about the last step. Because the IT environment keep changing, people should always improve their strategies and polices in order to fit the world.
It is important for an organization to have an IT strategy which align with business plan. To archive this objective, the first step is to make sure everyone in the organization understand the business objectives. It is good for people figure out how to get the right destination by right direction. For IT perspective, establishing enterprise architecture makes sure the IT investment is what the organization need. In addition, IT portfolio is also important for the organization to adjust IT investment to achieve business objectives.
On the other hand, IT governance should be in place in the organization. It ensures that IT strategy complys with business plan. Board of director should be responsible for this. IT strategy committee and IT steering committee are also playing the important roles in design the strategy and ensure employees’ actions are on the right path.
Finally, policies are the baseline for a organization. To make sure every employees has right action, policies are also important They need to be approved by senior management and reviewed periodically.
Thank you for your sharing. I really like what you mention about knowing of the IT strategy and business strategy. I agree with you idea. It is important for not only managers and company owner to know about these two strategy, but also the employees need to know about it which can help both two strategy can be carried out easily.
I agree with you. In most organizations when IT and business strategy are misaligned, it’s a result of one of two common scenarios: first, the organization has never included IT as part of strategic planning; or, a once thoughtfully aligned relationship has gradually become disconnected as the organization’s needs and priorities have changed.
As these changes occur, business leaders update their strategies accordingly.Likewise, technology evolves at a breakneck pace.After a while, the organizational friction and pain points become obvious, but company executives might not immediately pinpoint the heart of the issue: the business strategy has evolved, but the IT strategy has stagnated, or worse yet, diverged.
Well said Xinteng. Glad to see you mentioned IT governance. IT governance provides a structure for aligning IT strategy with business strategy. By following a formal framework, organizations can produce measurable results toward achieving their strategies and goals. A formal program also takes stakeholders’ interests into account, as well as the needs of staff and the processes they follow. In the big picture, IT governance is an integral part of overall enterprise governance.
Good points, Xinteng.
IT governance is a good way to ensure the IT investments support business objectives and achieve the alignment between IT strategy and business strategy. Many organizations implement a formal IT governance to provide a framework of best practices and controls and to meet the internal and external requirements, such as legal requirement, stakeholders requirement.
I agree with your point. IT strategy have to align with business plan otherwise this is the recipe for failure. Making sure people understand the business objectives, as well as a good IT governance to make sure that the IT strategy complies with the business plan. I haven’t thought deeply about this aspect in my own post. Thank you for sharing
Hi Xinteng,
I agree with your point on making sure everyone in the organization understands the business’ objectives and goals. It will be detrimental to the overall vision of a business if its IT component did not buy into its strategy. Great point!
Good evening, Xinteng. You made good explanations toward the method of how to achieve the alignment of IT strategy and business plan. I agree with you on the importance of IT governance and policies.
Great point. If employees do not understand their company’s cultures and strategies. The work they are doing would become non sense and off-tracked.
IT and business professionals unable to bridge the gap between themselves because of differences in objectives, culture, and incentives and a mutual ignorance for the other group’s body of knowledge. This rift generally results in expensive IT systems that do not provide adequate return on investment. Therefore, if I were a member of the IT Strategic Development Team for this company, I would try to align the IT organization’s strategy with that of the company’s by achieving the following characteristics:
1. View information technology as an instrument to transform the business: this includes exploring other revenue streams and integrating other facets of their business into each other. For example, using one central data warehouse to combine two separate, but partnering businesses.
2. Hold customer service, both externally and internally, at the utmost importance: communication between the organization and their customers must not be lost.
3. Rotate both IT and business professionals across different departments and job functions: they must have the knowledge and experience of both sides of the business so that understanding and communication is achieved. Once those three characteristics are achieved,
4. Provide clear and specific goals to both the IT and business employees: this will create the integration of both entities to achieve a common goal.
5. Ensure that IT and business employees understand how the company makes or loses money: this is important so that money is not carelessly poured into the IT department and there is no return on that investment.
6. Create a vibrant and inclusive company culture: there must not only be informational unity, but a company as whole.
Source from: https://en.wikipedia.org/wiki/Business-IT_alignment#Alignment_models
good points. what’s more, how to find Alignment is important. To dig a little deeper, a Business Value Analysis can be extremely useful when it comes to assessing business strategy and IT strategy alignment. This is an involved process, but the steps include:
1.Determining whether or not IT leaders have a firm understanding of the organization’s strategy and goals for revenue, growth, etc.
2.Identifying the business functions that drive those goals.
3.Cataloging the technology services and determine how they align to the business functions identified in step two.
4.Classifying the services into standard and value-added services. Standard services are necessary but do not directly support organizational goals. Depending on the nature of the business, they may include things like email, voice communications, etc. Value-added services do support the organizational goals.
Well said, Xiaomin,
As the resource you provided, there were many alignment models. The EA Frameworks are usually used to achieve business-IT alignment such as TOGAF. But EA development may be too expensive and time-consuming even inapplicable when implementing.
Hi Xiaomin,
You made some good points. Customers’ rating is really important so that the communication is necessary. As the story for our written assignment, may the IT team can develop a project to analyze and ingratiate their customers.
Hello Xiaomin, you made lots of information about the skills to align IT organization’s strategy with characteristics. I appreciate for your explanations for the purposes each characteristic.
In most organizations when IT and business strategy are misaligned, it’s a result of one of two common scenarios: first, the organization has never included IT as part of strategic planning; or, a once thoughtfully aligned relationship has gradually become disconnected as the organization’s needs and priorities have changed.Moving out of misalignment poses challenges difficult for a company to work through internally. Egos and company politics can derail alignment efforts. An outside expert brings objectivity to the table, and he or she can help the organization identify the areas to work on.
For example, a company may have chosen to manage email through its own data center. To do that, they purchased servers and hired engineers to install the software and keep everything running. A third party consultant would be able to show executive leadership precisely how much this costs year to year –right down to the added electricity costs. Furthermore, they can demonstrate how a solution like Microsoft Office 365 would reduce those costs and free up IT talent to focus on strategic initiatives, rather than managing utilities.
http://5qpartners.com/strategic-alignment/are-your-it-strategy-and-business-strategy-aligned/
Well said Qiyu. Business – IT Alignment should be revisited periodically, at least annually, or when there is a significant course correction in corporate direction.
I agree with you. Cost is an important factor to be considered in IT strategy. People should figure out a cost-effective method to make the IT investment satisfied to the business objectives. IT portfolio can be used in adjusting IT investment. That makes the strategy comply with the business plan.
Hi Qiyu Chen
I agree with you. When It was never part of a strategic planning, or when the relationship between IT and business goals are disconnected due to change of priorities. And it takes an outside and fresh look to fix it. Great point
When It was never part of a strategic planning, or when the relationship between IT and business goals are disconnected due to change of priorities, IT and business strategy would be misaligned*
Hi Qiyu,
You made a good point. Since IT is more and more important nowadays, the corporations should utilize it to make them developing and becoming strong. To keep up with the pace of the times to win the game!
If I were a member of the IT strategic Development Team for the company, I would align the IT organization’s strategy with that of the company’s as following:
1) Understand the business and corporate culture
To make sure the IT strategy alignment with the corporate’s, understanding the business should be the primary. Understanding the business can include knowing all the business processes, determine business nature, main products, key roles and responsibilities, key customers, partners. The corporate culture should take into account to creating appropriate IT culture so that achieving optimum performance.
2) Communicate the benefits of aligning IT and business
To make sure every member of the team understand the benefits and true value of the alignment, such as improved customer service, lower IT costs, improved work effectiveness and etc. This understanding will facilitate a positive work environment and enable a more effective alignment process.
3) Setting performance metrics
To make sure if the strategic alignment has been achieved, a measurement process should be in place. Possible metrics can be productivity, costs, work efficiency.
Hi JIng,
I think your points are fantastic and really capture some necessary steps that will need to be taken by the development team to make sure both IT professionals and business professionals have an understanding. Understanding corporate culture and using it to align business and IT goals is a great suggestion because most of the time this is overlooked or forgotten. Corporate culture is the roots of an organization and not understanding the roots will make you unable to nurture the project in the appropriate way.
Good evening, Jing. I think you hit the key points well. The business and corporate culture should be considered. Aligning IT and business are also important for any application development and the performance metrics setting should have been achieved.
Hi Jing,
I agree with your points. Communication is a good tool for a project or the team.
I agree with all of your points, and especially the metric for performance. When people are given a review of their work it promotes effort and keeps people on their toes.
Jing, I agree with you. Corporate culture equates to understanding the company’s background, which provides the common goal of keeping the IT team aligned with the company’s strategy. It is also important to reconcile and understand the true value of each member so that each member can play their part.
Most of the IT decisions are made without really understanding the business goals. IT should look at each acquisition more like a project, other wise it will simply be viewed as an expense.
As a member of the IT strategic development team, I would make sure IT is a part of the organization’s strategic and project planning. I would review the current business strategy plan. I will then identify the goals, objectives and expectations and how the business is going to achieve them. I would also do a risk analysis to identify issues that may arise as well as a cost analysis to help the decision makers decide on whether or not to undertake the acquisition. Then an IT strategy that supports the business strategy can be designed.
There should also be policies to enforce proper handling of the acquisition IT infrastructure until its complete integration.
Alignment means that the appropriate and timely application of IT, in harmony with business objective, strategies, and requirements. It’s necessary to feed strategy discussions with data-driven insights. Also, IT strategic plans should support the business goals.
I think you make some good points about IT and Business alignment. I also think risk and cost/benefit analyses are a good approach to coming to an agreement when deciding if a project is feasible.
Hello Mahugnon, I can’t agree you more on the importance of understanding the business goals. And I really like what you said “T should look at each acquisition more like a project, otherwise it will simply be viewed as an expense.” It is really thoughtful idea.
you are right Mahugnon, IT and Business have to work hand in hand. IT cannot make business decisions without full involvement by business. There is no project undertaken by IT that is independent of the business as a whole.
Hi
I agree with you. When It was never part of a strategic planning, or when the relationship between IT and business goals are disconnected due to change of priorities. And it takes an outside and fresh look to fix it. Great point
If I were a member of the IT Strategic Development Team for the company, I would align the IT organization’s strategy with this company by first gaining an understanding of what the organization is trying to achieve. IT strategy is about aligning with the business and having a deep understanding of the business, thereby being prepared to fulfill their needs, define target IT capabilities, and perform a gap analyst. The purpose of IT within an organization is to be effective, efficient while providing confidentiality, integrity, availability, be compliant, and reliable.
According to our textbook, ISP is an organized process of evaluating the organization’s need for information and outlining a system that will address those needs. ISP must look at information systems that will help the business accomplish the goals that were defined during the corporate strategic planning.
Valacich, J. S., & George, J. F. (2017). Modern systems analysis and design (8th ed.). Boston: Pearson.
I totally agree with you, Lezlie. Having a deep understanding of the overall business strategy is a essential job as a member of the IT Strategy Development Team. Figuring out what our business need is and what capabilities we have is much more important while we are developing the appropriate IT Strategy. Second, efficiency and effectiveness are core values which the IT strategy must help the overall business strategy to achieve. Without a good implementation, a good business strategy won’ be able to play its critical role.
Effectiveness is at the core of a successful business, as well as efficiency. I agree that a deep understanding of the business and its processes is essential for it to prosper. Being able to provide privacy and exude integrity is also important. When the business strategies throughout the organization are aligned, these things have a higher chance of happening.
I absolutely agree with you, Lezlie! The first step should be understanding the goals and objectives of the organization. Achieving the first step will allow the business to move forward with the process and procedures for the alignment of IT and company’s strategy effectively and efficiently.
Hi Lezlie, I strongly agree with you. The purpose of IT within an organization is to support the organization’s goals and to help achieve the goals efficiently. Before that, deeply understanding of company’s business goals is crucial and important. Correct understanding would help design a good project and keep the project stay on the right track.
Governance of enterprise (GEIT) is often times used to ensure alignment of IT strategy to business strategy. GEIT ensures that the IT resources of an organization are used in an effective way in order to fulfill stakeholder needs.The 3 processes of GEIT are:
• IT resource management- IT spending should be aligned with the current and future needs of the organization. This is usually achieved using project portfolio management. IT must purpose to acquire “mission critical” applications, systems, and any other assets. The focus should be on reducing costs, increasing benefits and creating value for the business.
• Performance management- Performance indicators, metrics and targets can be used to check if IT is delivering value to the business.
• Compliance Management- Policies support the achievement of the of the organization’s values. Standards like ISO 27000 and frameworks like COBIT can also be also used to ensure alignment of IT strategy with the organizational strategy.
Karabo,
I agree with the points you make. In particular, performance management jumps out at me as being critically important in the alignment process. When IT understands what the company is striving for, in terms of business objectives or goals – both qualitative and quantitative – at that point IT can truly begin to deliver value. Like you, I feel that review of metrics and targets will tell how effectively the value from IT is being added to the overall corporate mission.
you are right Karabo, The importance of the Governance of enterprise (GEIT) cannot be over emphasized. organizations Boards and executive management expect IT to deliver business value. ISACA has a certification exam named CGEIT – Certified in the Governance of IT, and I was shocked to find out that the exam was introduced in 2007, because it wasn’t until recent years that organizations started putting it into practice.
I found your information on GEIT very helpful and agree that it a helpful framework for overall better strategic alignment and risk management. While GEIT provides a structured approach, I think it is important to remember that it is not a one-time initiative, but an ongoing activity that needs to be monitored an adjusted over time, as does an organization’s strategy.
I agree with your explanation, Karabo! The three process of Governance of enterprise (GEIT), resource, performance and compliance management provides a comprehensive approach to ensure the alignment of IT and business strategy alignment.
I like your point about performance management. It is very important in the process of executing a project. It allows the company to know the performance of its project, such as what the company needs to focus, is there any problem, or how many inputs still needed and so on. Good performance management would help a company to achieve its business goal efficiently without unnecessary costs.
To align the IT strategy with the company’s strategy, I feel that a fundamental understanding of the company from overall culture through overall goals, by IT, is necessary to then go further in seeing what alignment looks like. I’ll break this approach down over three specific areas for IT to review in seeking more complete alignment:
– Culture (including core values, mission statement, and overall corporate strategic planning).
This area may give IT a better feel for the company’s “fit” in the marketplace, as far as, how they want to be viewed by competitors and the marketplace as a whole in conducting business. Employee view and consumer view of the company may be included here as well. If IT has a strong understanding here, it would be a solid first step for alignment.
– Goals (including objective statements and competitive strategy)
After gaining an understanding of the corporate culture, IT can begin to assess both the qualitative and quantitative goals the company has for reaching their desired place within their industry. Also the overall method by which the company wants to compete. For ex. Do they want to be defined as “innovators”, the “high quality” brand as compared to lower priced brand, or niched down to an ultra-specific customer base that they serve to enhance brand loyalty? These are important points that will further ensure alignment once understood by IT.
– Value chain analysis
Finally, in my opinion, this last set of info to be analyzed will help IT see what IS project development initiatives could need to take place in the future. By understanding the specific activities a company takes part in and determining where value is being added to its products and/or services, IT can be aligned with the company in a way that will give further clarity in using IT resources to enhance overall business processes and outcomes.
Hello Aaron, you raised three critical areas to focus toward how to align the IT strategy with the company’s strategy. I like goals the most. The objective statements and competitive strategy must be on the considerations.
I really like this post, Aaron. You just simply organized how to achieve the alignment between IT strategy and the overall business strategy into three specific words, but they were good enough to illustrate the approach. For instance, culture is broad word in the business world. However, it you connect it to the core values, mission statement, and overall corporate strategic planning, it would have a clear relationship with IT strategy. Also, goals is sometimes difficult to conclude, but it will make sense when it is associated with objective statements and competitive strategy.
As a member of the IT strategic development team, the first point of call is to ensure that the objectives of the IT strategy team align with the business objectives of the organization. In recent times, a lot of organizations have given precedence and a lot of efforts into effective IT governance. In this case we (the IT Strategic development team) would need to dissect the business objectives and policies and design our strategy around them and not the other way around. This would require working closely with Senior Management, CFO and relevant business units to get a thorough understanding of the objectives, assess the current IT infrastructure to determine the extent to which it can support the such objectives.
If the IT infrastructure needs to be modified, a cost benefit analysis would be carried out with the CFO to justify the proposed cost to be incurred.
A keen understanding of the relevant laws and regulations governing the sector is important, and working with the business units on policies and best practices would guide the IT strategic development team in designing its policies and procedures.
In conclusion, using an existing system for a new project may not be a bad thing but it is important to understand the objectives intended and assess the viability of using such systems for such project.
I definitely agree with you that using an existing system for a new project may not be a bad thing however that it is important to understand the objectives and assess the viability of using such systems for such project just as you would for implementation of a new system. For example, the inclusion of top management may help identify when it is more optimal to evolve existing systems rather than implementing totally new ones. This would also help avoid initiating projects where systems are redundant in functionality to an organization’s existing system(s) or unnecessary.
If I was a member of the IT Strategic Development Team for the company, I would align the IT organization’s strategy with that of the company in several ways.
– IT Processes: With regard to IT Processes, as a result of the business strategy we employ, it will be best to adopt IT processes that allow easy integration of other IT applications and systems. For example, in using data analytics software, we would ideally want to use a software that allows data to be imported from multiple databases. Hence, this will make the integration of newly acquired businesses easier without affecting our core business
– Policies – With regard to policies, as a result of the business strategy we employ, it will be best to have IT guidelines and policies in place that does not compromise our core business in the acquisition of new business. For example, prior to the acquisition of a company, the potential acquisition has to undergo an IT audit and review process before a formal agreement is made. This will allow the business to assess the potential risk of the new business with respect to the present IT environment.
– Services – With regard to services, as a result of the business strategy we employ, it will be best to employ IT services on a temporary or short-term basis. For example, in acquiring cloud computing services – this comes into play as we would want to sign a short-term agreement for these services as related to long-term. In doing this, the company cuts costs and is not committed to a service once it decides to resell a company.
Hi Derrick,
You made some good points. I totally agree with the police part you have mentioned. The core business should not be compromised in the acquisition of new business.
If I was a member of the IT Strategic Development Team for the company, I would align the IT organization’s strategy with that of the company’s as follow:
1) Understand the company’s strategy, background, culture, and its competitors’ background. Illustrate the advantages and disadvantages of the company’s background and culture. Understand how the company’s strategy took shape. Try to think the company as a whole element, then go deep, go into detail. The IT organization’s strategy should follow the company’s strategy.
2) IT processes should provide integration among the processes that are specific to IT, enterprise portfolio management, business processes and business change processes, and be integrated into a quality management system (QMS) and the internal control framework. IT processes should run based on the company’s business processes to align the IT organization’s strategy with that of the company’s.
3) IT department should always do the projects or products align with the company’s benefits. If the goal for the current period is increasing the income, then IT should develop the program or products to make customers interested in buying them. If the goal for the period is to maintain the existing advantages, IT should keep updating maintaining the product stability.
Reference: https://gta.georgia.gov/psg/book-page/it-process-framework
Mengqiao, I very much agree with your three points, the team’s cooperation and goals are related to the company’s strategy and background, which can make the team move in one direction. In addition, based on customer requirements as the basis for the development of products that customers are interested in the company’s products can be welcomed.
I like the point on the structure of the company. In order to completely understand the positives and negatives of a company’s background and history one must delve into their history and understand how and why it is the way it is. Only then can you start to properly tweak it for the better.
Hi Mengqiao,
I agree. Understanding the company’s strategy, so IT processes could run based on the company’s business processes IT Strategy is about alignment with the business, understanding what the business is all about and will we be ready to fulfill those needs. As well as, understanding the enterprise direction, defining the targeted IT capabilities, conduct a gap analyst, assess the current environment capabilities and performance, and define the strategic plan and roadmap. This is then taken to an IT staring committee and share/get approval from them.
Aligning the IT strategy with the enterprise strategy is always a tough job for most organizations. Developing an appropriate IT strategy plan is associated with various departments within the company, including strategy development team of IT department, IT steering committee, and board of directors. Therefore, as a member of the IT Strategic Development Team, we may have a variety of tasks to implement.
• Getting familiar with the company’s overall business strategy. Since the company changed the acquisition strategy recently in order to integrate newly-purchased organizations better, understanding both our and their company’s strategy and business need is much more important. We will develop IT strategy plan based on those need.
• Analyzing the current assets portfolio of both hardware and software. Assets integration is a critical factor to determine whether an acquisition is successful or not. Taking advantage of their resources and technology to expand our capabilities is the most important purpose of our acquisition.
• Concentrating on resources optimization of IT strategy. A good strategy usually needs a good implementation to succeed. One essential purpose of IT strategy is to provide a higher efficiency and effectiveness to the overall business strategy of the company. Helping the business strategy to implement easily and effectively should always be the critical purpose of IT strategy.
If I were a member of the IT strategy team, I would do the following to make the IT organization’s strategy consistent with the company’s strategy:
Team coordination process Assessment team coordination is the first step in developing a coherent organization. All systems and structures must support the company’s vision.
Second, the entire team must understand how their personal goals relate to the goals set by the management team. Now is the time for everyone to move in the same direction.
Finally, validate the strategy that has been developed and make sure it is the team’s strategy. This can easily be done by using competitive strategies that provide incentives, such as the chance to win something for a particular sales goal, or it may be a growth strategy that moves team members to the next level.
Using competitive strategies is something that will create a faster-paced and more productive environment. I think when people are going up against each other in a fun way it will really help the company and projects move forward and evolve.
I like the idea of having a team understand have a personal goals aligned with the team/project goals. While it is great and talk about the perfect world where everyone looks out for everyone else and does the right thing for the sake of the right thing it is necessary to understand the more primitive motivator of human beings. We do things that Help us to achieve what we want.
IT organization’s strategy and the overall strategy of the company should coincide and support one another. Departments of an organization should not be put into silos. There should be a clear connection of departments and the overall company so that it may flourish. The first step in strategy alignment is communication. The departments need to remember that they are building towards one goal and are all pieces of the puzzle. The culture should be properly aligned and communicated to each employee so they know exactly how things should be done. There should be goals and expectations that should be set out for each employee and department. Providing benefits for reaching these things would give each person an incentive for being a team player and abiding by the rules of the organization. The most important thing is promoting company growth while staying true to your values. As long as IT is supporting the expansion of their employer while acting according to the guidelines that have been set out, there is something positive going on.
James you bring up a great point about departments not being placed in silos. The connection of departments will allow for better communication within the organization overall. This will also improve the company culture as departments will be more in unison after realizing they are working towards one common goals. Organizations who establish this mindset can developed cross trained employees, yielding numerous benefits for the organization in return.
Hi James,
I definitely agree with your statement. Alignment of IT and the organization’s strategy is critical, and in order to achieve success communication is key.
If I am a member of the IT Strategic Development Team for the company, to align the IT organization’s strategy with that of the company’s. I will consider as followed areas:
First, we need to have a good understand of company’s strategy. we must have a good understanding toward company’s business goals, strategies, metrics and policies. We need to figure out each procedure across the services provided by companies. In additions, to build a good IT governance is also critical. Then we can get an overall view about what functions are needed can be support by IT department.
After the benefit cost analysis and break-even analysis. Projects can be set. A periodic audit should be conducted to make sure the current IT processes are still meeting the company’s goals, strategies, metrics and policies. If not, a maintenance should be conducted. Either upgraded or replacement or abandon of the old projects should be considered.
I strongly agree with your points. Achieving benefit-cost balance is important for a company, which means the costs and resources are used efficiently. And periodical audit or evaluate should be conducted to ensure the status of IT projects is kept on the right track. Maintenance should be available if there any thing goes wrong. I also like your point about upgrade, replace, or abandon project when necessary.
If I were a member of the IT strategic development team, the first thing I need to do is getting to know the company’s IT strategy, background, and culture. Also try to understand the competitors’ background and culture. Then try to understand how the company’s strategic could be better to get competitive.
The second I should know is what my role would be. I should relate my personal goal to the company and the team. Make sure to know how I can help the team and company to get the strategy operating smoothly, and then we can move and get the goal. Both on my personal and the company’s.
The third I should do is more detailed. I should make sure that every detail work are done such as setting performance metrics, processing frameworks, and making supporting policies.
Ping, you made a very good point on understanding the competitors. By knowing the competitors, we can make a better or more competitive decisions on the projects.
Your ideas are impressive. I agree with what you mentioned about competitor’s background and culture. Sometimes these information are easily ignored but they are actually very important for a company to design and execute its own projects. Competitor’s information can be a kind of reference to help a company avoid or minimize same risks so that to develop better projects possibly.
If you were a member of the IT Strategic Development Team for the company, how would you align the IT organization’s strategy with that of the company’s?
If I was a member of the IT strategic development team for the company, I will:
—understand the organization’s business strategies and background
—identify the organization’s both long-term and short-term goal and requirements on IT
—Develop a systematic approach to prioritizing IT projects
—Align projects to the strategic goals for business strategy
I agree with your points, Dongjie! Alignment of business and IT strategy is only possible when the short term and long term goals are met and prioritized accordingly. Often the tendency is to give less importance to long term golas and only prioritize the short term goals. However, this may not be the best approach in the process of IT and organization strategy alignment.
I agree with your ideas especially for identifying short-term and long-term goals. Both short-term goals and long-term goals are important for a company’s success. Besides, projects the company execute should align with business strategy and company’s business goals. Projects implemented on the right track are crucial for a company’s long-term development.
In today’s business IT plays a significant role in the business performance. Hence, it is important that the organizations and IT’s strategy align with each other. If I were a member of the IT Strategic Development Team for the company, I would consider a few steps to align the IT organization’s strategy with that of the company’s. The first one would be to evaluate existing systems and infrastructure of the IT and provide possible recommendations to improve execution and create competitive advantage. Secondly, I would also evaluate the existing plans and procedure and assure that the policies clearly define the objectives and regulatory requirements. Lastly, I would look into balancing the cost of IT maintenance against new technologies to support business strategies in order to obtain overall common goals.
I agree with you Binju, In order to make sure the deliverable satisfy the requirements of the organization, the team members must understand what is the real needs of the organization, which include the long-term and short-term plans.
If I was a member of the IT Strategic Development Team for the company, firstly I would clearly understand the business goal of the company. Then, I would align company’s existing business strategies and background with current condition. In this way, we could analysis company’s strengths, weakness, opportunities and threats to better identify both short-term and long-term goals. After short-term and long-term goal identified, we can develop IT projects and align projects with business strategy to serve and achieve business goals. Remember all things we do is to keep our job on the right track towards business goals. Meanwhile, evaluation after a project developed and executed is also important and reasonable upgrade should be in place to keep benefit-cost balance.
Good explanation Yingyan, besides all of your points, I think periodic review and reports are also necessary for align the project objectives to company’s.
While M&A activities can provide a strategic platform for future growth, they can also accelerate the software challenges for the organization. Even though most companies are likely to outgrow their ERP systems over time. To overcome and prepare for the potential challenges of combining entities these are few approaches to enhance merging ERP software.
Standardize business processes. It’s important to understand how the business procedures are and align the ERP software with business requirements.
Understand the best ERP strategy for the subsidiaries. It’s equally important to understand the higher level of the ERP strategy going forward. As an example to analyze how much will the two companies standardize operations? What areas are they sharing and what new modules are required?
Make the ERP system merging process repeatable and scalable. Since this process can repeat for each organization. Documenting standard business processes will develop a corporate ERP center improvement, and facilitate other activities that will enhance software merging.
Each acquisition should be approached like a project. A plan needs to define what the expectations are of how much and how fast the acquired company will integrate into the existing one. They also must complete a risk analysis to understand what problems could occur and how severely business could be impacted in the future. The risk analysis also serves to help the company understand what the net gain is to be had. There could also be a loss if they are not prepared to integrate two systems together. Although it may seem like a great idea to expand and purchase competition, the work that follows may not be favorable if you are not prepared
The 1st up to dealing with this issue of realignment is to do and analysis’s on the IT infrastructure and the business processes and goals of business units. The sooming all that is done then I would skip ahead and say that is cost effective, IT should Savage would could be solid from the RP and look for a less complicated program to fulfill the jobs that are murderous did nestle I wanted to do in the 1st place.