Business IT Alignment- Moving Beyond the Jargon

Any discussion around business value of IT is far from complete without reference to business IT alignment. The concept has become so popular that every known and unknown IT problem seems to revolve around it. Yet it remains an abstract concept as little is known about how it can be built or changed? Business IT alignment has an underlying reality and through this blog, I would like to highlight what lies beneath.

Research has found 6 inter-related dimensions creating business IT alignment-

1. Communication between business and IT functions

Is there a shared vision between business and IT? Do they understand or appreciate each others’ domain? How does the business and IT functions communicate, how often do they communicate and what do they communicate about? What is the tone of their communication? Is it positive or smack of conflicts and power struggle?

2. Partnership between business and IT

What do the business and IT functions do beyond communicating? Do they really work together? How do they work together? What is the relationship like- positive or negative? What is their experience of working together? Are there structural mechanisms to support their working together? Are the business and ICT planning and management processes tightly connected and integrated? Is there a clear ownership of IT projects at the senior level?

3. Architectural alignment between business and IT

What is the structural alignment between business and IT? Do they work with compatible or incompatible structures? An example is that of business working with SBU oriented structures with high level of decentralisation in decision making but IT function is centralised with powers vested in the corporate office.

4. Value measurement of IT investments

Are there well defined methods of measuring value of IT investments? Are these methods formalised and standardised i.e. are they in the open? Are they understood by only a few or all? What are these methods? Do they emanate from the business strategy measures? How often are these revisited? How critically are they used? Does IT performance affect budgets?

5. Governance of IT investments and projects

The structural side of IT management, is there a governance structure defined? Does it include all the decisions related to IT and the roles and responsibilities around those decisions? Is there a transparency with which these roles and responsibilities are defined and practices? How often is this revisited to reflect the contemporary needs of IT?

6. Human alignment with IT projects

What is the alignment of people and their efforts around IT? Do people participate in IT projects? Do they merely adhere to the systems or they use the system in innovative and unique ways? Are there institutionalized change mechanisms, which help minimize the resistance? Do key users participate in decision making process?

We at Coeus Age have developed an 18 item scale to measure these 6 dimensions of business IT alignment. Those interested may used it to gauge the business IT alignment in their respective organization.

Defining these 6 dimensions of business IT alignment, though highlights both conceptual and practical side of the construct, there is further reality beneath.  These six dimensions spans across two operational aspects of the organization, people and practices. And it is here that any meaningful intervention for change can be identified and initiated.

Let’s understand what these operational aspects are.

People represent the relational at the senior level and motivation or orientation aspects at the lower end or the broader level. The nature of relations, level of conflicts, reasons for the conflicts, the degree of power struggle, the role of the top management to address these conflicts and struggles and how do they do it all put together define the people side of the reality at the senior levels. How do people align with IT projects, do they participate?, do they simply adhere or do they use the information for their day to day working or are they empowered enough to take important decisions having implications of the way business is conducted? Again the role of top management becomes quite salient in terms of setting the purpose of IT, thus providing the motivation for the people and creating an appropriate environment.

Practices are the structures and mechanisms, which enable working of people together in relations to IT, how do they identify the need, define projects, implement and use them? They can be of many types, in different rhythms and level of formalization. They essentially are the institutionalized aspects of working together. Example would include- monthly review meets, quarterly meets, steering committees, operations meet, weekly operations meet, group leadership meet, plat level committees etc. They are salient by both their presence and their effectiveness. Merely conducting meetings is not enough, but what is their effectiveness in driving the appropriate behaviors is also important. Again the role of the top management comes under the spotlight as they are the ones, who set the tone and the environment for both presence and effectiveness of various practices.

It is the people and practices aspects as discussed above, which lead to the six dimensions, which in turn collectively create the construct of business IT alignment.

Hence, to understand and do something with business IT alignment, one needs to look at the people and practices side of the organizational reality.

Measuring the six dimensions of business IT alignment needs to be complimented by the understanding of the underlying people and practices aspects. Then only it helps one change the business IT alignment as required by the contemporary needs of the organization.