Do your IT projects propel your company forward or slow it down? Do your
technical and business functions create synergies or disconnects? Your answers to
these questions reveal whether your IT
department is aligned with your business
objectives.
“Without alignment, IT becomes a cost center,” says Eric Stoll, director of technology at
Arke Systems. “But when IT does deliver on
business objectives, it positions itself as a
business driver and engages as a strategic
partner.”
Smart Business spoke with Stoll about the
impact of IT alignment and how you can create it in your business operations.
Why is it crucial to align IT with business
objectives?
When IT is aligned and engaged, it can act
as a business driver and strategic partner. But
when this doesn’t happen, IT will stay in a
reactive mode that distracts it from efficiently accomplishing business objectives. The
goal of IT should be to deliver business capabilities that benefit the company.
What are the potential consequences if they
are not in sync?
If IT can’t support key business objectives,
this could lead to loss of revenue, missed
service-level agreements and lower customer
satisfaction. This disconnect can also hurt
employee morale when IT professionals feel
unrealistic expectations set them up for failure and other employees feel frustrated by
ineffective IT systems. But when time and
care is put into IT project planning, the end
result will prove much more satisfactory to
everyone involved in the process.
What does a unified business look like?
With an aligned plan, the business units feel
a natural push and pull of productive stress,
which drives the whole organization forward. Both the business and IT groups
understand the overall company goals and
objectives and how they relate to IT. Both
parties also agree to company measures of
success, such as revenue targets, customer
service levels and strategic projects, and
know how IT will help the company reach
those measures. All IT projects would have a
solid business reason or ‘case’ and a business
sponsor. The sponsor represents the needs of
the business, offers insight and affirms that
the IT expense has merit based on the cost
benefit analysis.
Continued momentum requires frequent,
scheduled, measurable communication between business units. During these conversations, everyone can review an IT ‘scorecard’
that relates IT performance to the company
measures of success. This allows for continual recalibration throughout the project.
What processes should be in place?
When the business considers IT a valued
partner and involves the department during
the planning phase, the business realizes the
benefit of alignment. Planning should encompass these core areas:
- Financial: established processes that
account for IT costs and benefits - Strategic: measurable IT involvement in
achieving business objectives and goals - Operational: service-level agreements
between business units and IT
Project management ensures the proper
implementation of the plans and should
include frequent, scheduled communication,
such as:
- Monthly financial, strategic and operational reviews
- Peer and 360-degree feedback related to
performance and customer satisfaction - Assessment of the company’s processes
and systems by external talent
What are some common mistakes that lead
to disconnect between business and IT?
Oftentimes, IT focuses too much on ‘how’
when they should focus more on ‘why.’
Executives aren’t concerned with ‘how’ IT
happens, and rightfully so — knowing too
much detail could be a distraction. For IT to
participate at an executive level, it must
speak about IT initiatives in terms of business strategy, which usually means discussing how IT supports each business unit’s
objectives. IT must also operate and report
performance in relation to these goals in
order to be perceived as a business driver.
When IT doesn’t operate in terms of business objectives, other executives may feel
frustrated. This could lead them to believe
that IT is too costly, that the initiatives aren’t
critical, and that IT representatives should be
excluded from strategic planning.
How can mistakes be avoided?
Everything really comes back to clear planning, including defined vision, goals, objectives and success measures. The IT plan
should relate every part of the project back to
the business objectives to demonstrate their
measurable positive impact.
Financial planning and management also
play a critical role in the process. The ideal
set-up has IT costs distributed and paid for
by the individual business units. This will
drive measurement and push the IT group to
perform, especially if the business units can
seek external support if they feel IT is not
meeting its measurements. Also, the business sponsor of IT projects should control
the budget and have accountability for meeting it. This creates checks and balances
between business and IT and mutual agreement on spending.
ERIC STOLL is director of technology at Arke Systems. Reach him at (404) 812-3123 x130 or [email protected].
