Successful business-IT alignment requires more than a good relationship between the chief information officer (CIO) and other C-level executives. To realize the full benefits that successful business-IT alignment can deliver, there needs to be alignment at three levels:
- Strategic: Executive/senior managers work with IT to define and prioritize IT programs, projects and resources to meet business needs.
- Tactical: Senior/middle management works with IT’s management to collaborate on the delivery of IT projects and to review IT services, whereby ensuring the correct balance and focus of IT based on a business perspective.
- Operational: Middle managers and team leaders from the business work with IT management to define and monitor fit-for-purpose delivery as well as to support IT applications and services that empower the business.
Measuring Your Alignment
One of the most widely cited models for alignment was developed by Jerry Luftman. He suggests that there are six principles that are widely used to measure maturity of business-IT alignment:
- Communication:
Being able to communicate and exchange ideas effectively is critical to the success of strategy definition and execution. Important elements of communication include:
- Understanding of business by IT and vice versa
- Ease and effectiveness of collaboration
- Ongoing sharing on knowledge
- Competency/Value Measurement:
In many organizations, IT struggles to demonstrate the value that they deliver. Often IT’s metrics are set independently of business metrics and IT’s performance is judged on service levels. To achieve alignment there needs to be:
- Alignment between business and IT metrics
- Proper service level agreements (SLAs)
- Benchmarking to demonstrate IT’s performance relative to competitors
- Formal measurement and review
- Governance:
Proper governance includes engagement of both IT and business stakeholders and covers a range of processes. For alignment to be achieved, governance needs to address topics such as:
- The integration of business and IT strategic planning
- Structure — How IT is organised?
- Budgetary Control — Is the budget in IT or held in departments?
- Decision making for IT investments
- Partnership:
Partnership describes the relationship between the business and IT. When IT is viewed as an equal partner who can contribute towards strategy definition, the business value delivered increases significantly. Factors that indicate a true partnership exists include:
- Business perception of IT
- IT’s participation in strategic business planning
- Sharing goals, rewards and risk management
- Cooperative IT program management
- Identification of formal business sponsors/champions
- Trust
- Scope and Architecture:
This alignment criterion addresses an organization’s technology maturity. It addresses the organization’s ability to:
- Support a flexible infrastructure that is transparent to all business partners and customers
- Evaluate and apply emerging technologies effectively
- Enable or drive standardized business processes
- Provide flexible and customised business solutions
- Skills:
This principle includes all aspects of human resource management — not just traditional areas such as training, salary, recruitment and so forth. It also considers the organization’s cultural and social environment. Factors measured for this criterion include:
- Change readiness
- Innovation
- Cross-training and career paths
- Social and political environment
Conclusion
Achieving and maintaining true alignment is not easy. It starts by ensuring that proper Governance is in place that involves both IT and Business. It also requires organisations and individuals to develop new skills and knowledge for both IT and Business Stakeholders:
IT Stakeholders need to improve their business IQ, develop the advanced communication skills required to better understand, cooperate with and influence a broader set of stakeholders.
Business stakeholders need to develop a better understanding of concepts like the mega-trends (e.g., mobile, social, big data and cloud), Enterprise Architecture and Governance to ensure that they can participate in the right technology-focused discussions to drive business results.
When these elements are in place the organisation will be truly ready to leverage the value that technology can offer.