Tuesday, March 31, 2009

Alignment perspectives

In my conversations with business managers and IT managers, the subject of the divide between business and IT often comes up. Business managers often have no idea why IT is working on someone else's project and not theirs, or taking too long and still not meeting their expectations, and wonder why IT can't be outsourced. IT managers are asking why the business managers don't have to agree on what is important, don't take an organisational view and get rewarded for making departmental efficiencies at the expense of other departments in the value chain (usually IT), are not held accountable for realising the benefits stated in shoddy, forgotten business cases, and continue to blame IT.

Both sides despair about the wasted opportunities and point the finger but nothing changes. These are symptoms of weak or flawed organisational governance, which is necessary to effect binding improvements in aligning both the business and IT toward the creation of real value and the achievement of the organisation's goals.

Governance drives alignment, which in turn drives the creation of value. 

Commitment and a structured approach to governance at the highest levels is required to continually drive the alignment of business and IT across various dimensions:
  • Strategy and goals
  • Processes and operations
  • Portfolios of plans
  • Resources and budgets
  • Organisational structures, behaviours, and rewards
  • Performance measurement
  • Risk management
  • Benefits realisation
  • Decision making and lines of accountability.
A useful frame of reference for starting discussion with business and IT managers and creating awareness of alignment opportunities and challenges, and the need for sound governance to ensure continual alignment of these dimensions, is Venkatraman's Strategic Alignment model.

Venkatraman's model recognises that value from IT investments cannot be achieved if the strategies of the business and IT do not align and if there is no dynamic process to ensure continual alignment.

The model illustrates four alignment perspectives:
  1. Strategy Execution - How will business strategy drive organisational design and change, and how will IT infrastructure and processes need to support that?
  2. Technology Potential - How will business strategy drive IT strategy, to that the required IT infrastructure and processes can be determined?
  3. Competitive Potential - How will IT trends and capabilities influence or transform the business model and operations?
  4. Service Level - How to build IT capability to support fast changing demands of end-users?
The model is useful when aligning strategies by opening minds to the various alignment perspectives and considerations. It becomes even more useful when managers use it to drill down to understand what that means and what changes will be needed in the various dimensions for business and IT.

No comments: