IT- Biz, far from a winning combo?

NEW YORK: Although information technology (IT) executives and corporate

business leaders increasingly acknowledge the potential benefits of better

aligning IT with business strategy, few have succeeded at making the link,

according to a new survey from Deloitte Consulting LLP and IDG Research

Services.






Ninety-six percent of IT executives surveyed predict a "significant"
or "moderate" positive bottom-line impact if an IT strategy were

specifically developed to closely align with and support the corporate strategy.

Only 10 percent of those same respondents, however, report their enterprises

have been "extremely successful" in IT and business alignment efforts.

Further findings reveal that clearly defined and communicated roles and

priorities can significantly improve IT and business alignment.

"We’re seeing a change in the economy that is spurring renewed

emphasis on growth and the reemergence of technology as a valuable contributor

to business strategy and the performance of business operations," said Ann

Senn, Principal, U.S. Leader of CIO Services, and Global Leader of Deloitte

Consulting’s CIO Advisory Services

practice.

"But IT departments cannot catch the wave if executives are unable to

define the role of technology in the organization and agree on how CIOs should

contribute to the organization."

Contentious findings on IT and business Alignment



While there is general agreement on the value of information technology
within an organization, only a small percentage of respondents report a high

degree of success in IT and business alignment efforts.

• Ninety percent predict that a "significant" or
  
  "moderate" positive impact could be achieved by their enterprise
  
  when IT spending were explicitly planned and measured against corporate
  
  priorities.
• Sixty-five percent of IT executives say "ineffective communication of
  
  business strategy and goals between business management and IT
  
  management" represents a "significant" or
  
  "moderate" challenge.
• Nearly half (49 percent) say the "lack of defined business
  
  strategy" is a "significant" or "moderate"
  
  challenge.
• Only 10 percent of respondents report their enterprises have been
  
  "extremely successful" in strategy alignment efforts. These
  
  respondents are five times more likely to say they are "extremely
  
  successful" in aligning IT spending priorities with business spending
  
  priorities.

"Extremely successful" alignment continues to elude most IT

executives. Sources of conflict that produce misalignment include unclear

definition of IT’s role in the organization, lack of detail in top management’s

plans, and shifting timelines.

Senn said, "Most CEOs love the products, love the customers, and hate

getting into details. They are superb at delegating. In addition, technology

infrastructures generally outlast the business models and the strategies they

were originally intended to support. This leads to overly rigid infrastructures

that limit flexibility."

Overcoming Obstacles and Creating Alignment



To help organizations overcome the obstacles that prevent alignment, Deloitte
Consulting identified three characteristics exhibited by organizations that are

more successful in aligning IT and business strategies:

• Executive agreement on the role of IT — where and how it adds value to
  
  the business.
To reach an agreement on the role of IT, Deloitte

Consulting developed a model that has proven helpful to the role-defining

process. The model contains four potential roles for IT: Business Leader,

Business Partner, Service Provider, and IT Entrepreneur. By identifying IT’s

potential roles in an organization, executives can agree on the roles and

scope of work IT should contribute to the organization.
• Executive agreement on the right priorities and focus areas for IT.
  
  The second characteristic requires IT governance, or the ability to place the
  
  organization’s IT assets into investment categories. IT governance involves
  
  balancing IT’s potential contribution against other opportunities and
  
  available resources. The IT investment portfolio should be structured to be
  
  consistent with the organization’s aspirations and operations.
• Doing the right things right — follow through and deliver against
  
  expectations. The last characteristic calls for organizations to
  
  deliver against expectations. If all other plans were well communicated and
  
  expectations were set, IT executives could execute well against plan and
  
  deliver against expectations. An organization that delivers effectively will
  
  be more credible in setting governance direction in the future. As investment
  
  decisions are turned into real business benefits, the organization will also
  
  gain new insight into where and how IT can contribute to the organization.

According to Senn, "To be extremely successful in aligning IT with the

business, the IT role and investment priorities must be clearly defined and

executed against agreed-upon plans. As executives begin to understand the impact

misalignment has on organization’s bottom-line, IT alignment becomes

increasingly critical to the organization."

Source: Deloitte Consulting LLP