IT and Business Alignment – Holly Grail or Fools Gold?

There is a lot of literature out there that talks about the importance of IT and business alignment.  If you search for the term at gartner.com you get “about 1700” hits.  You can’t go to a conference without it being the topic of at least 1 of the speakers.   Nearly every survey of CIO concerns has IT and Business alignment as one of the top concerns.  Often IT dedicated websites have whole sections devoted to the topic of alignment.   

So what is alignment anyway?  Since there has already been a lot of discussion about alignment rather than making it up here is what reference.com has to say:

Alignment is the adjustment of an object in relation with other objects, or a static orientation of some object or set of objects in relation to others.

 Business/IT alignment, Business/IT alignment optimizes the relational mechanisms between the business and IT organization by working on the IT effectiveness of the organization in order to maximise the business value from IT.

So business/IT alignment is important because without alignment it is unlikely that you will be perceived to be investing the organisations money wisely and nor will you be perceived to be adding value.  I guess if you boil it down to a single self centred statement for a CIO, if you are not aligned then you’ll probably be looking for a new job soon! 

So if alignment is the mechanism that allows us to “maximise the business value from IT” then alignment it not only important but it is the “holy grail” as what CIO is going to disagree that maximising business value is not the most important outcome of their role?

The problem is that while I agree that maximising the business value from IT is the central mandate for a CIO I believe that the logic supporting alignment as the way of doing this is fatally flawed.  Why?  Because to believe that alignment is the most important thing requires that you believe that IT and the business are separate objects (alignment is “the adjustment of an object in relation with other objects”).  Alignment in a world of unity or an integrated world is nonsensical.  Actually, I’ll take this a step further; the fact that we practitioners of IT see ourselves as somehow different from the business in which we operate creates the problem of needing alignment.  If we simply changed this belief and replaced it with a belief that IT is the business, or perhaps more correctly, is within the business, then the issue of alignment goes away. 

That’s to simplistic I hear you say?  You’re just playing with words? Maybe, but no other function talks so much about the need for alignment as IT does.  It’s interesting that while reference.com has a definition for business/IT alignment it doesn't have a definition for business/[insert name of any department except IT here] alignment. Have you ever heard of business/marketing alignment or business/finance alignment?  Now this is not to say there are not issues with silo behaviour and the need to work together within and between other departments but the thought of this being a problem of two independent entities needing to be aligned is a little bizarre.  

One Approach to Strategy

This post was first published by CIO New Zealand

“Forget the arduous, intellectualised number crunching and data grinding. In real life, strategy is actually very straight forward. You pick a general direction and implement like hell.”   Jack Welsh

 

I love this quote. It captures so much of where I have ended up when it comes to understanding strategy. Not long after taking up my role as the CIO of The Warehouse I began to turn my mind to producing an IS strategy. However as I went through a traditional strategy exercise as a CIO rather than a consultant I came to realise that traditional strategies don’t work to well in the real world. The best possible outcome of a traditional IS strategy is that you produce a list of technologies and projects to be implemented into your organisation over a three to five year period that while they maybe rationally correct they are usually unrealistic and unexecutable. Why? I struggle to answer why with any precision however, if pushed, my answer is that an IS strategy provides a static view of some future nirvana based on conditions today, foisted onto a dynamic and ever changing organisation. Static and dynamic do not mix well no matter how often static is updated.

 

So if a traditional strategy doesn’t work then what are the alternatives? When I am confronted with these types of questions I revert to type, deep introverted thinking, and try and answer some basic questions. In this case the basic questions are:

 

Question 1 – Why are we here? Whether this is expressed in the traditional sense of mission, vision and values our alternatives such as an organisational Core Purpose as The Warehouse does, or a “general direction” as Jack Welsh expresses it you need to understand why you exist. A clear definition of purpose provides meaning to the team and if it is truly alive will guide all decisions.

 

In our case the team decided we were here “to help the Warehouse achieve it’s purpose of making the desirable affordable by becoming a world class IS organisation that provides great solutions and great service that makes life easier for our customers and our team.”

 

Question 2 – What does success look like? The “game” of business is played over a long period of time and you need to know if you are making progress towards meeting your purpose. This is the world of measurement and I love measurement as it very powerfully determines what gets done. The real question is what should you measure? We determined that there were 5 key dimensions of what it meant to be a world class IS organisation and we have developed measures for each dimension. The dimensions are:

Customer Satisfaction – Are our users and colleagues delighted with our service?

Operational Effectiveness – Are our core IS operations efficient and effective and are we actually providing a quality service? (actual service quality and customer satisfaction with the service is not the same thing)

Employee Engagement – Is our team a place where people want to work and are they motivated to do their best work?

Project Delivery – Are we agile and do we define, prioritise and deliver the projects the business wants and needs in a timely fashion?

IS Value Add – Are we delivering value to the organisation for the money invested and are we bringing great ideas on how to use technology and information to help the organisation succeed?

 

Question 3 – How mature are we as an organisation? More detail on this can be found in my blog post about the IS hierarchy of needs however the answer to this question will form the context in which you choose your priorities.

 

Question 4 – What initiatives should we undertake to meet these needs? The initiatives you undertake will vary depending on the culture of your organisation, your leadership style and what needs from question 3 you are trying to meet in the short term

 

Question 5 – What are the target measurements that will show we have succeeded? This is how you will know you are making progress and provides cues of when to celebrate and when to dig deeper into an issue that is not making progress.

 

After much thought and discussion within our team answering these 5 questions forms the basis of our strategy. It is simple. So simple we can fit it on a page, two pages if you count the scorecard with all our measures on it and we hang it up through out our work area, always visible. Now all we have to do is execute like hell.