For many years, companies used organizational structures that kept several departments “siloed” from one another, which allowed them to establish easy-to-manage hierarchies within each function. Although most of them have shifted to flatter, less hierarchical structures in recent decades, IT departments still tend to be treated as isolated areas within an organization.
Unfortunately, this has led to IT leaders being left out of strategic planning and made it more difficult for companies to get the most out of their technology resources. That’s why there is such a strong push now to improve business and information technology alignment when it comes to strategy, planning, and execution. The importance of information technology in business should never be taken for granted.
What Is Business-IT Alignment and Why Does It Matter?
In today’s fast-moving digital world, technology plays a key role in how organizations deliver their products and services as well as how they interact with customers, vendors, and other partners. Companies rely on their IT departments to realize strategic business goals and facilitate the digital transformations that are necessary to keep pace with rapidly changing circumstances. Having the best strategy in place will not amount to very much if a company’s IT resources aren’t able to implement it.
As data analysis becomes more important to strategic decision-making, business leaders must lean more heavily upon their IT infrastructure than ever before. Advanced big data analytics, risk assessment, and cybersecurity are all areas where a greater alignment between business leadership and IT can help to improve decisions, mitigate risk, and optimize productivity while still keeping costs under control
Why Misalignment Occurs
Despite the obvious importance of aligning IT strategy with business strategy, many organizations struggle to maintain effective communication between departments. In some instances, CFOs and CIOs even develop an antagonistic relationship, each one focusing on their specific obligations rather than thinking about how their work contributes to broader organizational success. Once these misalignments occur, they have a tendency to grow quickly as every subsequent action or decision serves to compound existing problems.
There are a number of reasons why business and IT efforts can become misaligned. Lack of technical literacy among non-IT leadership results in unrealistic expectations or a failure to consider the consequences of a new strategic direction. Poorly defined or poorly communicated goals create confusion, which can easily paralyze an organization that needs to make informed decisions quickly in response to disruption and change. When one area of a company is committed to innovation and growth while the other plans to remain comfortably within the status quo, the strategic plans they produce are fundamentally incompatible.
4 Steps for Aligning IT With Business Strategy
Good communication is essential to promoting more effective alignment of IT and business strategy. Ideally, this should begin with a strong working relationship at the senior leadership level. It should come as no surprise, for instance, that over 70 percent of CFOs have become more involved in their company’s IT agenda over the last few years. Of course, there are still many barriers standing in the way of collaboration, but by taking a few simple steps, organizations can greatly improve their business-IT alignment.
Identify Existing Gaps
Any efforts to improve business-IT alignment need to begin with identifying the existing gaps that make it communication and collaboration difficult. In many cases, the gaps begin with the language barriers separating the business and IT worlds. While they may not literally be speaking different languages, they’re often asking different questions and thinking about problems in fundamentally different ways. Facilitating better communication and breaking down long standing barriers between departments can help to close misalignment gaps.
Make Strategic Goals Clear
At the end of the day, business and IT leaders are working toward the same goal of sustainable business success. That success could take a number of forms, but it’s critical that they are clearly articulated and visible to all stakeholders within the organization. For IT leaders, it can be very easy to interpret a lack of clear organizational goals as a preference for the status quo. On the other hand, the business side of the company may not understand why the IT department keeps pushing for technology upgrades when they should be focusing on delivering existing services. Without clear goals established in consultation with one another, business and IT leaders will find themselves speaking increasingly different languages, making aligning IT with business strategy almost impossible.
Strive for Convergence
But the challenges don’t stop once strategic goals are set, especially when it comes to connecting short-term pressures and needs with those long-term goals. They must also have the humility to recognize that they can’t achieve the company’s objectives all on their own. For CFOs, that means acknowledging the crucial role technology plays in their own success. Meanwhile, CIOs must remember that technology is not an end in itself, but rather the means to a larger business end. That’s why many organizations are talking more about convergence today than alignment. Rather than two separate entities striving to work alongside one another, business-IT roles are becoming increasingly integrated to facilitate better communication and execution.
Hire a Business Relationship Manager
Sometimes misalignment is so severe that estranged departments simply can’t bridge the gap without assistance. In such cases, a company may have to install a Business Relationship Manager (BRM) to facilitate realignment and convergence. A BRM typically has a strong understanding of business processes and operations, but also the technical vocabulary and expertise needed to communicate effectively with IT leadership and convey the importance of business strategy. They may serve in a strategic role, acting as a liaison, translator, and diplomat to improve relationships between departmental stakeholders, or in a tactical one, focusing on a specific task to ensure that all of the organization’s business and IT capabilities are being deployed effectively.
By taking steps to achieve business-IT alignment, organizations can do a better job of mustering their essential resources in the direction of achieving their primary strategic goals. Given the growing role that technology is playing in organizational planning, the outdated model of feudal departments that jealously guard their territory is rapidly giving way to more converged models that encourage cross-functional teamwork that reduces confusion and inefficiencies.
About Alan Seal
Alan Seal is the VP of Engineering at vXchnge. Alan is responsible for managing teams in IT support and infrastructure, app development, QA, and ERP business systems.