IT Alignment - A Dialog

In the almost 25 years we have been working on IT alignment with business, we have uncovered some truths that lead to the consistent failure of IT to successfully align with business. I say failure, because algnment has remained a top goal of both business and IT senior managers for decades and yet the number of organizations that have achieved and maintained alignment is very small. (See CIO Insight, March 2007, "The Eternal Priority" by Allan Alter - "Yet again, alignment is the top priority for CIO's". "Alignment rises to the top because it's at the heart of business technology".)

These discusions are intended to explore the reasons behind the difficulty in implementing IT alignment. We will share our knowledge and experience garnered over these last decades and invite comments and input from those who have succeeded (yes, there are some), those who are/were unable to maintain, those who are in the process, and those who have lessons to share.

In an effort to get this dialog started I submit the following observation from among out top 10 failure factors:

SUCCESSFUL IT ALIGNMENT IS NOT ACHIEVED BASED ON WHAT YOU SPEND. It is not how much you spend, but what you choose to spend it on.

In all our years of research and work with alignment in hundreds of organizations, we have found only two that did not spend enough on IT to meet their goals. However, we have found only a handful of organizations that focus their IT investment dollars on the things that would make the business more successful -- enable their business goal achievement.

Organizations have spent huge efforts trying to determine if they are spending the right amount on IT. The answer is simple: If you are spending enough dollars to support the IT projects that will enable the top business goals of each function within the organization and on the IT infrastructure to enable its 3 to 5-year strategic vision, you are spending the correct amount of dollars. If you cannot afford to fund the IT support for all the top goals of each business function, the prioritization process is again very simple -- fund the projects that achieve the highest priority business goals.

We gather data on the three top goals of the managers in each unit of the organization. We have found that most organizations are financially unable to fund IT for more than the top two priority goals for each business function. In some cases, not all the 2nd level priority business projects can be fully IT funded. However, all top priority goals projects should be funded. The process is a give and take, but IT funding decisions made based on the impact on the business strategic plan.

The process is also a dynamic rather than static process. We have discovered over the years that by the time the ink is dry on a strategic plan, business goals have changed. The changes may be due to market, industry, economic, political, legal, or any number of other reasons. However, what is important is that the IT and business teams at all levels constantly revisit these goal shifts and determine whether the business projects underway should be continued, changed in priority, or abandoned. IT needs to be agile and able to reassign resources based on, at least, a quarterly review to minimize IT lag with business goals.

This brings up the issue of long-term IT projects such as ERP, etc. Should business and IT undertake these projects? Absolutely!!! However, funding these long-term projects should NOT preclude the funding of those IT projects required for successful short-term goal achievement. To do so is to risk organizational decline and, in the case of the private sector, diminished profitability. Those organizations that have focused IT funding solely on long-term projects have experienced (in addition to lower profits), job losses, market share declines, outsourcing of IT, and many other unpleasant outcomes. Big, long-term projects (like ERP) require infusions of additional IT resources in order to service the ongoing business.

So: How does the CIO maintain alignment currency on actual business goals and retain enough spending freedom to do the quick, high-payoff projects?

We invite anecdotes, stories, comments, observations, critique, expansion, or any other dialog on the above and look forward to a lively discussion and/or debate on this topic.