IT and business: worlds apart

IT-business alignment is now at the forefront of the minds of both the users and suppliers of IT. Why? For the simple reason that businesses are now so dependent on IT to support their activities – and that although the role of IT as a business support tool has undergone a significant evolution, but the thought processes which shape how IT is talked about, sold, bought and implemented, have failed to keep up.

Whereas IT was first used as a business tool to automate the storage, retrieval and analysis of structured data in the “back office”, it is now contributing directly to the business processes which touch customers and partners, where the emphasis is on the automation of information exchange and collaboration between people and companies. There has been a proliferation of applications supporting ad-hoc collaboration within and between organisations, particularly intranets, email and more recently instant messaging, web conferencing and blogging.

The result? IT supports a broad spectrum of business processes: from stable, non-differentiating information management processes that are explicitly defined (such as accounting processes) through to dynamic, differentiating, collaborative, inter-enterprise processes (such as product design and channel marketing processes) that depend on tacit knowledge.

However the IT market, as a whole, remains fixated on rigid, highly-structured processes; features and functions; “speeds and feeds”; and “quick fix” IT silos. As a result, typical IT portfolios fall short in a number of areas:

• Integration – when a new system, either purchased or developed in-house, is implemented, significant effort is required to enable it to interoperate effectively with the systems already in place
• Information access – although information to support decision making is abundant, it is often difficult to access in a timely and meaningful fashion
• Flexibility – it is often difficult to modify system behaviour in response to ever-changing business requirements, in part because of technology limitations and in part because of an inability of businesspeople and IT delivery organisations to communicate requirements effectively
• Resource utilisation – the industry may be focussed on speeds and feeds, yet the utilisation of IT resources is sub-optimal and there is significant redundant capacity.

Things are changing, but a world where technology suppliers, IT organisations and business stakeholders can all speak the same language is a long way off.

Aligning IT with the business

For IT organisations to align themselves with desired business outcomes, they must seek to collaborate with business decision-makers, to create an environment where both IT investment and IT service delivery reflect business priorities; and where business and IT change are informed by the capabilities and limitations of each other – as shown in the figure below.

A broad but well-defined IT governance framework is essential. There are four key features that the framework should have:

• It should be built with explicit links into the overall corporate governance framework, to reflect business strategy, budgeting, and change management processes
• It should aim to evolve the IT organisation, and the resources and assets it manages, towards a model which explicitly recognises the distributed, heterogeneous, federated nature of technology; but which utilises common, unified IT management control structures
• It should promote the use of two key concepts (contracts and policies) to connect IT management control structures to the physical technology environment – throughout IT investment, service delivery, and change management processes
• It should enable the IT organisation to assess IT’s contribution towards business outcomes, and demonstrate that contribution to business stakeholders.

In other words: a good IT governance framework should bring the benefits of the mainframe-based data centre era, to today’s flexible, but complex, distributed computing environments.