Business and information technology alignment is a perennial challenge for all businesses, and it is no less so for e-businesses. Survey after survey (including my own periodic surveys since 1991) has consistently ranked business-IT alignment as the first or second most pressing issue facing IT executives.
It’s not that IT hasn’t tried. The position of CIO came into being to address this challenge. Since then, we have added executive steering committees, strategic information planning, and business process re-engineering to the mix. Despite these efforts, business-IT alignment remains a thorn in our side.
For e-businesses, good business-IT alignment is not just good sense, but the critical ingredient for e-business success. IT needs to know, for instance, that marketing is planning to target wireless customers with its next campaign. But if IT doesn’t hear about it until the campaign is launched, it could all be for naught. Or what if your company’s Web storefront is taking orders, but your back-room fulfillment system can’t keep up. Worse yet, what if the Web site exposes sensitive data to unauthorized users. Such misalignments are not uncommon in e-businesses, and they can sabotage e-business success.
What is Alignment?
Alignment, simply put, is business and IT working together to achieve business goals. The best e-businesses exhibit this teamwork in just about everything they do. At Dell Computer Corp., Cisco Systems Inc., and Yahoo! Corp., for example, business and IT are so tightly knit that it is hard to tell where e-business ends and IT begins. Charles Schwab & Co. and Recreational Equipment Inc. (REI) use IT to integrate their physical and virtual worlds so seamlessly that customers can’t tell where their transactions occur. For these e-businesses and others, good business-IT alignment is a cornerstone of their success.
In well-aligned e-businesses, everyone focuses on business goals. That focus begins by answering two key questions: “What are we trying to achieve?” and “How can IT help achieve it?”
Getting the answers to these questions depends on working together to identify opportunities, selecting the most promising, and developing a plan to achieve them.
Working together is the key. Whether you’re facing strategic planning or a project-level fix, IT and the business both must contribute to the decision and follow through on the execution.
Business-IT alignment sounds easy, but in practice proves hard to achieve and sustain. Alignment depends on communication, and communication is often elusive. Sometimes it’s a language problem: Business speaks dollars, IT speaks bits and bytes, and ne’er the twain shall meet. Other times, it’s a matter of different objectives: Business’s objective is to increase revenue or decrease costs and to use IT to do it, while IT’s objective is to stay within budget. The business sees only the benefits, while IT sees only the costs, making it hard to come together.
The consequences of poor alignment can be severe. There may be little or no trust between business and IT. Business looks at IT as an albatross, and IT looks at the business as a relentless taskmaster. Tension fills the air every time IT and business meet. In the most extreme cases, the animosity between business and IT comes out into the open. Alignment is impossible under such conditions.
Moving Toward Alignment
When alignment is pretty good, look to fine-tune the existing situation. Most shops can improve IT flexibility and responsiveness, no matter how well everything else is going. Moving IT resources as close to the business need as possible–even when that means putting them under business control–is one technique that works. Also, freeing up business units to pursue their own IT solutions–as long as they follow a well-defined infrastructure standard–tends to aid alignment.
IT shops with lousy business-IT alignment need to focus on building a foundation before they worry about anything else. In this case, start by figuring out why alignment is lousy. Are there too many demands on too few resources? Do business and IT communicate regularly? If so, is the dialogue relevant and applicable? Does IT play the role of naysayer because it manages a centralized budget, while business asks for the moon?
Whatever the problem is, identify and change it. This will not be easy, because in most shops with lousy alignment, there are no ready mechanism available for working together on the problem, nor is there a lot of trust between business and IT.
IT may have to take the lead in strengthening the relationship. To do this, IT will need to establish a solid track record, doing what it promises and meeting deadlines. It may also be necessary to rein in the business side’s expectations–when necessary, tell them there is no way everything they ask for can be completed on time, within budget, and to spec.
If this is the case, IT will have to work with the business side to identify the most important projects, the most important portions of projects, or even just the most important portions of the most important projects. IT needs to make clear that everything can’t be the top priority and that IT can’t work on everything at once.
Establishing priorities is a good first step toward improved business-IT alignment. The next step is to deliver on those priorities, keeping business involved throughout the process. Repeating this process is the best way to build a track record that will inspire confidence and open the door to improved business-IT alignment.
Do whatever it takes to promote good alignment–it will enhance your e-business success.
Chris Pickering is president of Systems Development, Inc., an IT research and consulting firm. He also is a senior consultant for the Cutter Consortium, where he has written a survey-based report on the state of e-business (more information is available at www.cutter.com/itgroup/reports/ebustrend.html). He may be reached at [email protected].