The concept of IT (information technology) alignment has been around for some time, regarded as a challenge to many leaders. The term IT alignment refers to the harmony between IT and business. It relates to the ability to use IT effectively in order to improve financial performance and marketplace competitiveness.
IT and business are usually seen as two separate entities that work together. However, IT should receive the same focus as other areas of your business and it should be discussed with the same importance as well. Too often, IT is seen as a separate aspect of the business that needed to be aligned with the business goals and many organizations still operate this way.
IT should be seen as an integral part of your business, not a separate entity. After all, IT enables business capabilities and is an area of strategic advantage for business. Therefore, It should not be seen as a cost to be managed, rather as an important business asset.
Bottom line, IT teams need to understand your company’s business problems and how to implement IT in such a way that it improves financial performance. IT must be able to change or adjust as your business evolves because “strategy” is a moving target and it is always changing.
Why is Business-IT Alignment Needed?
Simply put, the alignment between business and IT is an important aspect of IT governance. Though, there is a focus on aligning IT with business by many organizations, most of them are still struggling today. This is why CEO’s and CIO’s need to ensure that IT understands the business strategy before designing a plan. They also need to ensure that IT is inclusive in all important business matters. This includes inclusion in internal meetings, external meetings and other details related to your business strategy.
When your business operates with one agenda and IT operates with another, you should expect missed opportunities. Imagine if IT was focused on business goals too, rather than only focusing on IT goals. For example, you may improve your call center operations, implement a customer relationship management system, or provide tools to your sales force in order to improve close rates.
In fact, to remain competitive, organizations must join hands with IT. When IT understands business goals, it can enable your business with the latest technology in context to your long-term vision, goals and expectations.
A Framework For Business-IT Alignment
There are four phases of the business IT alignment cycle. These are plan, model, manage, and measure. The four phases or the overall cycle acts as a framework for a broad range of activities that assist in aligning IT and business objectives. You may use this as a roadmap or reference.
This is about translating business objectives into measurable IT services. IT needs to be able to effectively allocate resources to maximize business results. This demands on-going communication between IT and business leaders. As mentioned earlier, IT must evolve, as your business needs change. Services and resources have to be modified to meet the new needs when the time comes. Thus, a plan that accounts for this is important.
In this phase, IT designs infrastructure to increase business value and optimize business operations. Essentially, IT must understand your business needs and ensure that they are implementing systems that meet those needs or support critical business services.
In the manage phase of the cycle, service is delivered based on company objectives, ensuring that your organization meets company expectations. IT acts as a single point-of-service request and prioritizes those requests based on pre-defined business priorities.
It can be difficult to manage resources in order to meet any agreed-upon service levels without a single point-of-service request. Essentially, without a method for effectively managing IT infrastructure and all related changes, your IT department faces the risk of causing failures.
In this phase, the focus is on improving cross-organization visibility and service level commitments. While component-level metrics are important, it is crucial that IT ensures that there is a business context to what they are measuring. Understanding the relationship between the measured metric and business goals is ideal.
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