Does business-IT alignment really exist, or just a figment of consultants' imaginations?

Does business-IT alignment really exist, or just a figment of consultants' imaginations?

Summary: 'I want IT to move itself up the value chain... become a money-pit and you will be relegated to support or overhead.'

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TOPICS: Browser
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We talk a lot about "business-IT" alignment here at this site, and no subject is more obscure or overworked.

But is business-IT alignment real, or a figment of consultants' imaginations? My associate here at the ZDNet community, Michael Krigsman, recently put the question out there at the Focus business social media site, and generated quite a bit of lively and thoughtful discussion:

John Bagdanov: "The bottom line is IT has to develop healthy working relationships with the business units and the executive office. You have to gain their respect and demonstrate you’re commitment to their success."

Scott Priestley: "IT leadership needs to be integral to strategic planning, accountable for business metrics outside of their function and supportive of the innovation throughout other business functions."
Ben Shatley: "Add value and money will be thrown at you for any and all projects you can imagine. Become a money-pit and you will be relegated to 'support' or 'overhead.'"
Jim Smith: "In most companies I've consulted for, there simply is no focus on measuring the results of IT investments... If there's historically been no or little effort at reviewing the post implementation results, then the justification can be anything that is even remotely plausible because, 'they'll never know.'"

Vratislav Paulik: "Business/IT alignment has multiple dimensions, but I would like to focus on the most important one – strategic alignment. Balanced scorecard is a very good tool here. You include IT in the company strategic planning and ensure that the IT strategy is aligned with the business one in all the four balanced scorecard views – financial, customer, quality and employee. On the high level it means that the company objectives are cascaded down to IT in all the four areas, so that IT works in the company’s direction."

Topic: Browser

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  • Don't see it...

    My experience is that management sees their IT department as a Cost Center rather than an important tool that allows the company to succeed.
    ExCorpGuy
  • RE: Does business-IT alignment really exist, or just a figment of consultants' imaginations?

    It was a mistake to bundle up Computer Services, Telecomm, Networking and Database into IT. What business needs is Computer Services, not IT.
    tburzio
    • That's the wrong alignment

      @tburzio : The main purpose of computer services in the business is to let them handle data, transforming it into information and eventually ensuring it increases the knowledge required to run the business.
      rarsa
  • RE: Does business-IT alignment really exist, or just a figment of consultants' imaginations?

    The poor state of Business-IT is actually a symptom of the inability of almost most organizations inability to position Enterprise Architecture effectively within its strategic operations. So the problem is actually by virtue of poor design and lack of understanding of how to establish a viable architecture practice.

    I do agree with Excorp's comment of treating IT as an expense, rather than a capability driver within the organization.

    Tburzio comment is an unfortunate example of the #2 problem with Business-IT alignment which is false perceptions and lack of understanding of what IT is.
    baljamal@...
  • IT and Business

    IT are smart people for the most part and herein lies the problem. They are often too smart. They are always looking at the ways to do things properly. "Properly" takes time, is often buying into "new paradigms" before they are baked out and takes the Agile out of the business.<br><br>Don't get me wrong, IT has to do this BUT it must NOT be instead of anything else. Business needs problems solved today. Agile business improvement projects (what we used to call prototyping), often saves so much money TODAY that some of the saving can help fund IT research (what we call "playing").<br><br>So, I'm all for IT but AGILITY is key. Without that, IT might build the perfect solution, just in time to see their companies competitors take the lead from them!
    francis.carden@...
  • Business Management and IT

    I left the mainstream IT world when it was called "Management Information Systems". Back then, it was seen as a very expensive black art that held the company hostage. Senior managers were just learning to outsource the function, and it was becoming clear that senior management no longer sought or respected the views of MIS professionals.

    Since then, some things have changed, but most have not. IT as a "utility" or "service" has become popular, as well it should. It's often outsourced, and sometimes with great success. Still, the notion of IT as a "resource" or a "strategic asset" is less commonly successful, particularly if it's outsourced. Few outsourcing providers can truly understand your business' strategy and craft a reasonable IT strategy to conform to and support the company's overall strategy.
    I am often employed by large construction firms with global operations and hundreds of thousands of employees. It is common for those folks to have outsourced much of their employees' contact with the home office (time sheets, expense reports, HR functions, etc.) These archaic, inconvenient applications make it clear that the corporation, whose only assets are its people, has abrogated the "care and feeding" of those assets to outsourcers whose only concern is low cost.
    That's just one example, there are thousands more.
    Jim from Indy
  • RE: Does business-IT alignment really exist, or just a figment of consultants' imaginations?

    Joe,

    I think IT-business alignment is absolutely critical and not some consultant-speak or fad - it's job one for IT departments as far as I'm concerned. After all, IT is not an end in itself. Like other areas of the business (e.g., marketing, sales, operations, and so on), it exists in order to deliver value to the organization as a whole through increased revenue, reduced margins, money/time/resources saved, reduced risk, etc.

    In my work with clients every day, I see lots of organizations where IT is not delivering value or folks outside of IT aren't aware of the value IT does deliver (or some combination of both). If we're going evolve IT to the next level as an organizational function, then fixing this problem should be top of mind for all technologists, not just those in leadership roles.

    I've written some things on this subject folks may find useful (if it's allowed in these comments...don't want to be a spammer):

    - ITIL and the end of IT (http://bit.ly/bPz0zv)
    - IT: take it or leave it? (http://bit.ly/bPz0zv)
    - LEAN IT (http://bit.ly/dwcR76)

    Anyway, great post and discussion--keep it up everyone!

    Cheers,

    Joe
    http://flavors.me/jshepley
    jshepley
  • Fortune 500 companies

    My experience working at a Fortune 500 company some years ago, roughly is on par with the experts advice. If you could add extra value, you could get as many assignments as you could handle. I remember starting with an interdepartmental problem tracking and resolution system and from there - W2 printing, Risk Management software, Corporate Training database, ceo contacts database, custom organizational chart software - the projects came pouring in, after the word got out.

    On the other hand I've worked at companies where IT was perceived as simply an expense and to be avoided if you wanted anything to get done.

    Of course those are the two perceptions, and I think they were largely controlled by IT - how they wished to approach projects, defined how the rest of the corporation chose to use them - rather than it simply being the case that say, that it came down from upper management, how to treat IT.

    Beyond how the dynamics works...what is best?, i.e. the lesser expensive choice in the long run - well its almost certainly doing it in-house through IT. - if, you have a helpful IT department. If you don't, then you don't.

    Business managers who are not expert in IT, have to usually rely on information they get from salespeople and consultants. Salespeople don't give good advice, at all.
    Consultants are only a little better, but the majority of consultants have to say what can be believed and have to take a tepid approach to any project. They simply can't say - save costs with such and such creative approach. They take a middle road, a non-ambitious, rarely competitive middle road.

    IT departments sometimes even usually have brilliant people. And if a truly brilliant person steps into the transom and says, I'm going to save you money by doing this quicker, faster, and more professional than you can get anywhere else - that's great, take it, otherwise, hire that outsourcing company. The choice is either there, or it isn't.
    rdupuy11
  • Was it a rethorical question?

    Although it is not always aligned, it is a truism that it SHOULD be.

    The only purpose of IT in a company is to serve the business interests.

    Alignment works both ways. IT knows what the business needs and proposes how to make it better/easier/cheaper.

    The business in turn realizes how much it has to invest to allow IT do just that.

    When the Alignment is broken, IT starts producing little value and is seen as the business as a cash cow.
    rarsa
  • IT is so intertwined with the business.

    IT is so intertwined with the business that any discussion of "IT needs to align with the business" only occurs when people need to say something that sounds profound, it is time for bonus and raises (or lack thereof, in the case of IT) or business management just wants to make the IT staff feel like second-class citizens.

    The problem with alignment generally and attempting to be agile in particular is that most CxO's idea of strategic planning looks forward no further than this coming Friday's earnings forecast conference call with the analysts.
    Too Old For IT
  • Keeping it simple

    Simply put we in IT have shot ourselves in the foot years ago with the mantra that the user is our customer. That ensured that IT would NOT be a business partner with the other divisions of the company, just a cost center.
    We can never lose sight of the fact that the customer is the only one paying the company's bills. Any project must be able to show how it is benefiting that relationship.
    harrim47
  • RE: Does business-IT alignment really exist, or just a figment of consultants' imaginations?

    I have to weigh in since I was referenced <img border="0" src="http://www.cnet.com/i/mb/emoticons/happy.gif" alt="happy"><br><br>(though I may have gotten a bit carried away on the referenced thread)<br><br>Systems, particularly proprietary software, do have value, because they enable the implementation and application of business processes. Without software, the business processes cannot efficiently work, if they can be implemented at all. This is particularly the case in the manufacturing industry. <br><br>It doesn't matter what executives may or may not think. <br><br>Take the systems out of the company, put the company up for sale, and see what sort of value it has on the open market. <br><br>Well, it's value is the value of a business less systems -- I.e., the value of a complete business less the amount it would take to develop technology to put the business process in place. <br><br>Technology is a tool just like a hammer. It has value. Its value is not based on the happiness of the user, etc. as I read in a recent MSDN article. Since when, after all, have any of us joyously swung a hammer all day long? Before I became a software engineer, I was a house painter. My paint brush had value. But there were days it most definitely did not make me happy <img border="0" src="http://www.cnet.com/i/mb/emoticons/grin.gif" alt="grin"><br><br>Further, without systems in place to implement and apply business processes, the business model is nothing but words or pictures on paper. Its value is only the value of the idea itself. <br><br>Does not the application of an idea add more value than simply having an idea and doing nothing with it?<br><br>If it is more valuable to file a good idea away and do nothing with it, business is most definitely in a heap of trouble <img border="0" src="http://www.cnet.com/i/mb/emoticons/happy.gif" alt="happy"><br><br>Nevertheless, to those executives who wish to believe that software has no value, I would recommend they trash all software, put their business up for sale, and find out.<br><br><img border="0" src="http://www.cnet.com/i/mb/emoticons/happy.gif" alt="happy">
    Ben_S