In-Depth

Seven Habits of Highly Successful Business/IT Aligners

There are seven ground rules for aligning business strategy with IT. Flub any one of them and you can kiss your alignment aspirations goodbye.

• By Stephen Swoyer
• 08/30/2005

IT executives have business strategy/IT on the top of their to-do list, but—as many IT pros have discovered—not all of them have concrete notions about where to begin. As it turns out, there are seven ground rules for effectively aligning business strategy with IT, says one prominent analyst.

Dr. Tushar Hazra, a senior consultant with analyst group Cutter Consortium, contends that there are at least seven best practices that organizations pursuing alignment initiatives would do well to follow. Since these practices are interrelated, Hazra says, skimping on any one of them might very well doom the best laid plans of IT pros and business stakeholders alike.

Best Practice #1: Establish Effective Communication

For starters, Hazra says, IT leaders and business sponsors need to have a way to effectively communicate with one another. What this really amounts tois IT coming to terms with the expectations of business sponsors. This doesn’t involve IT merely paying lip service to the concerns of business stakeholders, either. Instead, it assumes that IT leaders develop a sincere understanding of the (often) vastly different concerns of the business domain. To the extent that business stakeholders feel that the IT side of the fence understands their concerns, IT leaders should have an easier time obtaining executive support (i.e., buy-in) for their own concerns, according to Hazra.

But this best practice also assumes an understanding of the vicissitudes of business in any large organization. Simply put, says Hazra, not all stakeholders are going to be available at all times, which can place a practical limit on the input that they have into alignment planning. As a result, even if an organization has established an IT governance board to address this very issue, further tweaking will almost certainly be required.

“I actually think that is the most important part. What usually keeps on happening is that companies usually start with a small group of people, maybe three or four or five people, who are assigned to go out and assess what the situation really is. These people start with a set of assumptions about who the important [business] stakeholders are. But once that information has been gathered, the number of [business] stakeholders almost always increases,” he says.

This leads to a problem: the more stakeholders there are, the less likely it is that all stakeholders will have a meaningful say in alignment planning. “What I usually propose that people do is try to make sure that the expectation is set right from the beginning that not all stakeholders are going to be able to be [present] at all times. The idea is to give [absent stakeholders] some sort of way—perhaps [by means of] a portal or dashboard—so that those who are not readily available can still have access to the information.”

There’s a corollary to this rule, too. Merger and acquisition activity can complicate the picture in many organizations, which sometimes have similar (or identical) business units in different corporate subsidiaries or far-flung global locations. Part of the business of alignment, then, involves recognizing when and where such cases exist, and—even before the business stakeholders sit down with IT—consolidating redundant business units, or reaching a clear consensus on the concerns of each. “This is something I find particularly in companies … who have mergers and acquisitions. They have either managed to buy some companies that have similar kinds of business functions in place, yet not the same technology, not the same business processes.”

Best Practice #2: Assess Costs and Benefits

This leads to Hazra’s second alignment best practice: identifying the true—not derived—cost benefits of a proposed alignment. An organization can’t very well anticipate the benefits of such activity if it doesn’t have a clear understanding of its own structure—particularly, as Hazra has noted, if there’s redundancy or overlap in its business units. “They have to have the ability to deal with these [issues of overlap or redundancy] before they can think about [IT] alignment.”

Best Practice #3: Determine Business Value

Organizations need to determine how business value will be measured, managed, and monitored. This is trickier than it sounds, Hazra points out.

“The problem I find most companies have is how do you come up with a [business value] matrix? If we don’t have a matrix that allows you to collect all of the data that will help you measure, it’s not going to work. It’s just simply not going to provide you with the benefits that you’re looking for.”

Once again, Hazra suggests using a portal. “There are various ways of collecting the matrix, and it doesn’t have to be collected in one place or in one Excel spreadsheet or in one governance dashboard. It could be in various places,” he says, “but we need to have some sort of portal that would allow us to access all of that information in all of those different places and maybe bring it into a consistent look and feel.”

A portal has the added advantage of opening up the process to as many business constituencies as an organization deems necessary.

Best Practice #4: Define Roles and Responsibilities

Companies need to define roles and responsibilities for each member of the organization’s alignment teams. This is especially important in larger organizations, Hazra says, because it makes it easier to attribute the appropriate accountability, responsibility, and ownership while optimizing the level of resource utilization across the enterprise.

“In small companies, most people feel a lot more accountable and responsible than they do in large companies, because their roles and responsibilities are a lot more visible,” he explains. “In larger companies I know, it’s easier to be anonymous in some ways. So this is an attempt to bring more visibility, more accountability to the larger companies.”

Best Practice #5: Capture Compliance Requirements

Companies must capture requirements for compliance with industry and government regulations, policies, and procedures. Many companies are already doing this, says Hazra, because they realize that it can make them more agile in dealing with always changing mandates and legal restrictions.

“Again, the larger companies are affected a lot more extensively than the smaller companies. The regulations that we usually find are equally applicable to small, medium, and large companies, but as the company grows in size, the complexity of systems and applications [affected by compliance regulations] also grows. They get more extensively impacted than the smaller [companies].”

Best Practice #6: Conduct Milestone Reviews

Another practice that’s well established in most large companies is that of periodic milestone reviews, particularly with respect to project deliverables. “The best practice for the mid-size or large companies is … setting up the project management or roadmap management office, and giving somebody a specific responsibility to maintain some of these reviews and inspections, and keeping track of them as you grow,” he notes.

“This is something I find is a lot more well-established than the first four or five elements. The reason behind that is that project management is something that really hasn’t changed a whole lot. It doesn’t matter if we’re doing outsourcing or not, somebody has to look at it and assess how it impacts the overall enterprise.”

Best Practice #7: Establish, Update Ground Rules

Finally, says Hazra, companies need to establish ground rules and update them with incremental improvements from alignment lessons that they’ve learned. Common ground rules include not trying to identify all business stakeholders, business processes, and etc. before a company starts its alignment planning. It sounds simple, Hazra concedes, but in larger companies, it’s surprisingly difficult.

“Let’s start with the basics, the fundamentals. Larger companies don’t manage to do the lessons learned as well as the medium or small companies. It kind of falls through the cracks, and people usually don’t allocate that time, they don’t appreciate sharing each other’s information,” he comments.

“Sometimes they’re really very political. It depends on the organization’s culture, and the differences of the organization’s culture, but it is often the case that a company doesn’t manage to benefit the way it should be [benefiting].”