New Survey on IT Alignment

IDG Research has conducted a new survey about IT alignment. The findings published in a white paper at: click here for whitepaper are very consistent with our own data collected over the last 25 years. Some of their findings are as follows:

1. Companies that are well-aligned typically include the CIO or senior IT person as part of the executive committee. (See our Blog post of Sept. 13)

2. In well-aligned companies, IT is brought into new projects from the beginning rather than as an afterthought.

3. Frequent communication between IT and business is essential to successful alignment, and it needs to take place at all levels within the organization.

Other findings include data regarding the importance of IT alignment -- ..."81% say alignment is critical or high priority" and "over 50% say aligning IT with business goals will increase in importance over the next 18 months". Still others cite the IT poor success rate organizations have had with implementing and maintaining IT alignment -- ..."only 15% say they have been very successful at aligning IT and business goals".

The survey finds that, "One of the challenges to alignment is that the actual business goals of the enterprise are not always clear to IT, and they're not always well articulated within the organization as a whole."

How true this is. We have found in our work that as soon as you mention the business strategic goals the business or IT manager's mind leaves their real world and begins company-speak. Furthermore, in our experience, when the business managers requests and IT project, s/he is not thinking about the company goals (one reason why IT project requests are not aligned with business goals) but is thinking about today's big problem.

What is needed and the approach we have used over the years to bypass this problem is to work with the top operational goals for each unit within the organization -- things that have to be achieved in order for their organization/function/etc to be successful. Regardless of what is written in the strategic plan, or communicated by senior management, the operational goals are the ones driving the organization because these are the things the business managers are "doing".

IT therefore has a problem. Whose goals does it align with if operational and strategic goals are inconsistent. By identifying the operational goals, IT, operational business managers, and senior managers, have a means of measuring whether they are on the same page. Let me cite a story as example:

One of our clients in an electrical utility industry who used us over a period of years found in their initial baseline survey that a new unit that had been established to "pursue new business ideas" had operational goals that dealt primarily with getting more efficient and cost reduction and they had few operational goals dealing with revenue increases or competitive advantage. When this data was presented to the Senior Management Committee they were shocked. A discussion among themselves revealed that the business managers they had assigned to the new unit where mainly from the old power generation unit. These managers where unable to get out of their "old think" box in order to accomplish the strategic purpose for which the unit had been established. The Senior Management Committee was unaware until then that these managers were just the wrong people for the job. It was their fault not the fault of the business manager's chosen.

Management changes were made and more entrepreneurial managers put in place. At the next measurement, the goals shift was toward revenue generation and competitive advantage. Because IT had the strategic/operational goals for this unit, it could design projects to quick achieve these goals. The results: new profitable products up within one year and spin-off of a whole new profitable business within a few years.