ALIGNMENT: Building a Closer Relationship Between Business and IT Reply

alignment. team workjpgThe business gurus Kaplan and Norton describe “Alignment” as a state where all the units of an organisational structure are brought to bear to execute corporate strategy in unison.  When Alignment is executed well it is a huge source of economic value.  When it is executed badly it is a colossal source of friction which can cripple the business.  The authors go on to note:

Alignment

IT DOESN’T NEED ALIGNMENT, IT NEEDS BETTER UNDERSTANDING

IT and the Business speak of alignment in two radically different ways.  The Business talks about alignment between business units.  When speaking of tech they use words and phrases such as ROI and operational performance.  IT talks about alignment in a way that makes them feel as though they matter to the business.  That profitable, customer facing business units could achieve more if the corporate centre where to align business units under a single, cohesive strategy is one thing.  That IT depts fail to execute strategy or even deliver operational effectiveness through poor understanding of requirements, an inability to see the technical reality of commercial value or realise some of the social cohesion which enterprise software systems need is not mis-alignment – it is just bad practice.

THE RELATIONSHIP BETWEEN THE BUSINESS AND ICT IS DIVERGING

The increasing capabilities of a smarter, more mobile , more virtual workforce means a greater commoditisation of knowledge work.  With this comes the polarisation of Business and ICT.   A broader ICT function with a wider array of narrower and deeper areas of expertise will, increasingly, be incapable of coding the more subtle and complex social aspects of human collaborations.  In such a world the ICT agenda must be set by the corporate centre.

mis-alignment

ICT NEEDS TO FOCUS ON EXECUTION NOT ALIGNMENT

ICT’s economic value will be realised when it (and therefore Enterprise Architects) can support business units to reach across each other to create valuable products and services which justify the corporate overhead.  McKinsey & Co, for instance focus heavily on central knowledge management.  This enables research to drive service line improvement in relevant sectors.  IBM spends over 3 Bn GBP on R&D and the development of leading-edge products way beyond their years.  ICT needs to focus on the execution of corporate strategy and not alignment. Alignment is a structural issue whereas execution is a functional issue.  Stop tinkering with the structures and focus on the functions/operations.

GOVERNANCE – ALIGNMENT AT A PRICE

Moves to improve the business relevance of ICT usually result in heavier, more burdensome technical governance.  The finance function imposes capital project controls on technology projects and insists that benefits be quantified.  Although greater cost transparency will bring IT closer to the Business, heavier ICT governance only serves to drive ICT investment underground.  Pet-projects abound, useless apps proliferate and ICT costs continue to rise.  In the meantime, in a perverse inverse relationship, assurance becomes even lighter on larger programs. 

Alignment takes strong leadership and clear definitions of business intent.  A fancy set of IT tools are not necessary for alignment rather they are important when it comes to agilityMis-alignment is the fault of deep rooted cultural divisions which can only be overcome through the strict adherence to financial value and the use of a lingua franca engendered through a common architectural framework.   If ICT is to realise its potential and add real financial value then it must actively support the real-time execution of business operations.

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