Business and IT alignment is a perennial issues facing executives. It is one of reasons for misunderstandings, inefficiencies and frankly recriminations between technologists and business professionals. Improving Business and IT Alignment is a constant part of CIO strategic priorities as shown by the CIO survey results. Follow the link to participate in the 2013 CIO survey.
Business and IT Alignment in theory
CIOs and executives define alignment as an issue of leadership and process. Get the right process with the right leadership participation and commitment and business and IT create greater alignment between supply and demand. Using that economic model (supply and demand) the ideal alignment process would create a result shown in the figure below:
The alignment goal, shown as a blue dot, exists where business demand, IT budget and IT supply meet. The goal of alignment is measured by getting the right things into the right box. You will notice that the graphic above captures many of the common operational realities of alignment planning. IT is a capped or fixed resource with a predetermined budget and short term capacity limitations. This reflects the reality that it is difficult for a CIO or IT organization to suddenly “make more room” in the IT plan, unless they go ‘off budget’ by hiring temporary labor in the form of sourced people or solutions.
A plan for fitting the right things in a stable box represents the first stage of alignment capability – getting a proper plan.
The first stage of alignment does not sit well with the business
The issue is that this first stage often fails to achieve or maintain a stable plan for two reasons. First, things change and changes priorities and resource allocations which tear down the alignment. While you can deal with this issue through various means – including using technical tools to keep social alignment — any alignment strategy needs to address creating the plan and managing the plan in an environment of change.
The second reason has to do with the first stage alignment process itself. From a business perspective, engaging and supporting the alignment process actually makes the IT budget seem SMALLER not larger or better organized. Smaller in the several senses. Alignment adds administrative overhead required to run the governance processes. Each division feels they are getting less IT as they visibly compete with each other for a centralized and finite resource. Using the same supply and demand graphic, the figure bellow shows how a first stage alignment process can feel to a business executive.
The yellow triangle illustrates the perceived narrowing of IT capacity as each group is not more aware of what it is not getting because it can see what others are getting. This leads to zero-sum behaviors, escalating demands, shadow IT and a greater use of outside resources. Stand in the shoes of the business and this behavior becomes clear. They perceive getting less, but they notice that the IT budget remains the same. It is understandable that executives would think that alignment was supposed to get me more of what I needed, but all they see is less.
Tightening the plan is IT’s answer. Layering new levels of governance on top of business requirements, IT priorities and budget decisions. Greater control often confirms executive fears that the only way to get what they need is to either scream the loudest or go outside of IT by claiming that their solution is unique and cannot be provided within the IT organization. This creates an escalating dialogue of control, conditions and compromise – all because business and IT view alignment as a single stage focused on improving the plan.
There is a second stage in alignment maturity, one that few people explicitly plan for or engage.
Productivity and throughput form the second stage of alignment
What does the CIO exchange for greater business and alignment? After all the business is giving up some degrees of freedom, coming under an additional set of controls. What do they get in exchange for their silicon handcuffs?
If your answer is that they get a better plan, fewer failed projects and greater predictability, then you would be right. But you are making a weak argument. Weak in the sense those business leaders can get all of those things by choosing to work outside of IT.
CIOs need to promise more in exchange for business and IT alignment. More in the sense of committing to increasing IT productivity and throughput as a commitment IT makes to the alignment process. The deal is this — participate and contribute to alignment and I will get more – not less – for you and the entire organization. I will commit to and start to shift the IT Capacity curve outward, as shown in the figure below, doing more with the same IT budget.
A good alignment process should increase IT capacity, not consume it in administrative overhead and zero-sum governance meetings. If we all decide what we want, then I should be able to give you more of it. The question is how?
Recognize that if I have a highly effective governance and alignment process, then business requirements should be channeled in ways that are compatible and consistent with existing IT assets, resources, architectures an standards. By making the commitment to increase output, CIOs are enticing business executives to play with and by the rules rather than working around them, ignoring them or simply throwing them away.
This takes courage to commit a capacity increase at the start of the process. Even a 5% increase means significant challenge for IT – if it’s going to do things the same old way. However, with commitment comes a reciprocal commitment on the part of the business to work with rather than against IT.
The logic is simple, work with me so I can build in ways that leverage the legacy, reuse solutions, motivate the IT staff, etc. and we can do more together.
The result at the second stage is a win-win conversation where the more we work together, find ways to create value within resource and capacity requirements we can actually make the pie bigger, not smaller.
The results can be dramatic, as shown in the final figure below. This figure compares the perceived loss of capacity business leaders feel with the committed increase in capacity when alignment enters into this second stage. The dark gray area shows the net capacity increase you gain simply by going beyond committing to a plan to making capacity commitments.
Every simple illustration naturally simplifies the issue, politics, dynamics and realities of your situation and organization. However, look back at your business and alignment initiatives and ask – are we just improving control of the planning process (stage 1) or are we trying to plan in a way that creates capacity and therefore business value (stage 2).
Chances are you are stuck in stage 1, particularly if business and IT alignment remains a win-lose discussion.
Perhaps its time for CIOs to think beyond the process and plan. Perhaps its time to go onto the stage.