CIO 1-on-1 Just as members of an orchestra must play the same piece of music in the same key for their performance to succeed, so must all departments of an organization work together in a coordinated manner to achieve long-term, sustainable success.
The alignment--or the achievement of maximum results through collective efforts that work in harmony--of business and IT is a critical component of long-term success. Yet, according to a recent survey by the IT Governance Institute (ITGI), nearly 50 percent of organizations do not have a formalized governance structure to align business and IT.
This statistic is worrying, because IT has evolved over the past two decades from a back-office support function to a prime facilitator of business and an essential component of business strategy.
Aligning IT with overall business strategy calls for a continuous effort requiring full support from all levels of the organization, beginning with the CEO and board of directors.
ITGI offers the following tips for aligning IT and the business in its recent publication,IT Alignment: Who Is in Charge?:
- Make sure that board members and other senior managers are educated about the risks associated with IT and how business value arises from IT. This education requires involvement in the planning of the business and its use of IT.
- Ensure that IT managers and leaders are given resources--especially time--to fully understand the business and how IT is engaged with the business at all levels.
- Make IT a board priority by regularly placing it on the board’s agenda--not just once a year during the budget process.
- Make the IT planning process part of the enterprise strategic planning process.
- Give the CIO a place on the board as a full or ex officio member participating in all key business discussions and decision making. At minimum, the CIO should report directly to a board member who has an understanding of IT.
- Implement a system of board reporting on IT issues based on a regular IT dashboard or balanced scorecard.
- Establish an IT-related committee with at least one board member. The committee representation should be consistent with the organizational structure of the overall business.
- Actively manage the IT portfolio based on regular, reliable reporting.
- Involve IT management in all potential merger and acquisition activities.
The most important tip when aligning IT and the business is to communicate and build a mutual understanding between business and IT management to make sure that IT resources are prioritized according to business needs and that IT-based solutions benefit the business.
Business strategy and IT strategy should be inseparable, with IT considered in every aspect and stage of business strategy development. However, according to the ITGI survey, fewer than 25 percent of organizations directly involve board members when determining IT strategy. If business leaders take direct responsibility for IT, fuller alignment can be achieved, resulting in long-term, sustainable value.
Paul Williams, MBCS, FCA, is a former international president of ISACA and its affiliated IT Governance Institute (ITGI). Williams is an independent consultant specializing in IT governance, IT due diligence, IT audit and project risk management. He also acts as strategy director for SeaQuation, a new company specializing in intelligent IT portfolio analysis. He is the author of IT Alignment: Who Is in Charge?, published by ITGI.