A few years ago, I thought that we had finally moved beyond the conversation of “business-IT alignment”. I thought that business processes and technology had finally become integrated; if not integrated, then at least the boundary between business processes and technology was significantly blurred.
Well, I was wrong. Business-IT alignment – or the lack thereof – is still a thing.
We’re still struggling with business-IT alignment
This recent CIO.com article discusses seven hard truths of business-IT alignment. Here are a few of those hard truths:
- “The business is not your customer.” I agree. For IT to act like non-IT colleagues are ‘customers’ simply drives a wedge between the IT department and the rest of the organization. This behavior also provides IT with an excuse for not understanding the business of the business.
- “Like it or not, you are responsible for business outcomes.” That’s true. The real value from the use of technology is for the organization to realize business outcomes and value. But too often, IT sees and measures success in terms of projects getting done, or laptops being delivered, or contacts at the service desk being resolved.
- “The business really does need to understand what you do.” That’s also true. While the IT department is responsible for the installation and maintenance of digital technology, IT must be more than just a technology caretaker. IT organizations must help the rest of the organization understand how the use of technology supports business strategy.
- “You’re probably talking about the wrong things.” Couldn’t agree more. Many of the measures and reports that are being produced by IT are only because the tools being used by IT make it easy to produce these measures and reports. Do these measures have any meaning or relevancy to the rest of the organization?
Why is this a problem?
Business-IT alignment is not just a catch phrase or buzzword. The digital era is amplifying the importance of having strong business-IT alignment. But within many organizations, business-IT alignment is missing. How does the lack of alignment impact IT and the rest of the business?
First, IT is unable to respond to business demands at the speed of business. Consider the challenge that every modern business faces – serving the digital customer. The digital customer is demanding that businesses provide services at anytime from anywhere. In response, businesses want to leverage emerging technologies such as chatbots and GenAI to meet that demand. But because IT hasn’t been involved in those business strategy conversations, it is forced to play “catch up” to meet these demands – demands for which IT is usually unprepared. IT is not prepared because no one has been trained, much less involved in the selection of this technology – but then IT is expected to make it work as well as fit with existing systems and infrastructure. When IT is forced to play catch up, in-flight projects get delayed as IT resources are shifted to meet new demands.
But this behind-the-scenes work is rarely visible to the rest of the business. To the rest of the business, IT is a barrier to responding to the digital customer.
Secondly, the rest of the organization continues to look at IT as just a cost center. What those outside of IT may not realize is that IT must deliver warranty (security, resiliency, continuity, capacity, performance) as part of its services – regardless if that’s been communicated or specifically requested. Delivery of an expected level of warranty costs money – costs that may not be apparent to non-IT colleagues.
Why ITSM hasn’t helped
Wasn’t ITSM adoption supposed to address issues like the above and align the IT organization with the rest of the business? True, business-IT alignment is a goal of ITSM adoption…but for many organizations, it didn’t happen. Why?
- ITSM was (and continues to be) an IT initiative with little to no involvement from non-IT colleagues. The initial ITSM project focused internally on IT processes and infrastructure management and excluded defining services and business-IT strategy. Making things worse, IT didn’t map how what it does supports business results or delivers business value. There was (and is) no link established between ITSM goals and objectives and organizational goals and objectives.
- The ITSM initiative only focused on implementing a tool. This is a suboptimal approach for two reasons. A technology-only focus excludes how ITSM impacts people – both within and external to IT, as well as processes, suppliers, and partners. Secondly, the IT organization only took actions that facilitated use of the tool, not necessarily align with business needs.
- ITSM is only focused on IT operations – or even worse, just the IT service desk. ITSM is viewed only as a way to deal with end-users of IT products and systems, never considering how technology could be used strategically to deliver business value or results. As a result, not only is ITSM not aligned with the business, IT is not internally aligned.
Successful AI adoption requires Business-IT Alignment
Businesses continue to experience the impact of the digital economy. In the digital economy, the “store” is always open, and customers expect that systems are “always on”. Customers can (and will) do business whenever and from wherever they want – using any internet-accessible device. Customers expect a differentiated, frictionless experience that provides value. Encountering system downtime or a poor experience is simply out of the question.
And organizations are turning to new capabilities enabled by emerging technologies, like chatbots, GenAI, intelligent automation, and more to meet this ever-increasing customer demand. In the digital economy, the technology managed and delivered by IT is the crucial connector between a business and its customers.
What does this mean for IT? IT can no longer play a back-office role within digital organizations. IT has a critical role as a business operates within the digital economy – and strong alignment between business and IT is required.
The successful use of chatbots, GenAI, automation, and other emerging technologies starts with having strong business-IT alignment. So how do organizations seize this opportunity, avoid the mistakes of the past (as with ITSM adoption), and realize true business-IT alignment?
First, ensure that any AI initiative has clearly defined objectives that are aligned with business strategy.
Second, successful adoption of AI requires strong involvement of business leaders[i]. Successful use of AI-enabled capabilities depends on the AI understanding the business of the business. It’s business leaders that have the knowledge that AI needs.
IT organizations must make the investment in building skills and competencies, in both AI technologies and in understanding the business of the business. Technology-only skills are no longer sufficient. IT must become that trusted advisor to help guide business leaders as the organization navigates the challenges of an AI-enhanced digital economy.
Lastly, good ITSM is an enabler for AI adoption. Good ITSM means aligning activities with business goals and objectives, defining services to ensure a shared understanding how technology delivers business value and outcomes, and providing business-relevant metrics and reporting. As a result, good ITSM enables fact-based decisions regarding AI adoption, such as where intelligent automation would improve a customer or employee experience.
Nothing will change – unless there is change!
Let’s be clear. Business-IT alignment challenges will not just go away, nor will they fix themselves. It’s up to IT to align with the rest of the organization, not the other way around. And it’s not just the CIO alone that can drive business-IT alignment – the entire IT organization must also drive it as well.
It’s time to break the pattern. Here are some suggestions for breaking through those alignment barriers– all of which can be initiated by IT.
- Establish and nurture the guiding coalition. To demonstrate its commitment to overcoming the challenges of business-IT alignment, IT must form a team to drive change. This early step in Kotter’s 8-step model demonstrates IT’s commitment to driving improvement in business-IT alignment.
- Map business value streams – plus. Value Stream Mapping is a great way to identify how value flows through an organization. But don’t stop there – identify and map how technology supports each step within each value stream. Review these value streams with all IT personnel to raise awareness of how IT enables business success. Then, take it one step further. Review value stream maps with non-IT stakeholders and decision-makers. Not only will this illustrate the role of IT in business success, but those stakeholders may also even be surprised to see how technology enables value flow through the business!
- Look at what you’re reporting to whom. If IT is sending reports full of technology metrics to business colleagues, then IT is reporting the wrong things! Identify and define ways to measure and report on metrics that directly reflect the organization’s mission, vision, and goals. By measuring and reporting on metrics that are important to the business, IT demonstrates how its contributions lead to business success.
- Get serious about continual improvement. IT organizations can positively influence non-IT colleagues by fixing those things that cause constant irritation when interacting with IT products, processes, and services. Establishing a regular and on-going continual improvement practice to remove these irritants – then publicizing those efforts – will begin to change the perception of IT.
Business-IT alignment has long been a critical success factor for the modern, digital-age organization. Success with AI adoption is raising the need for alignment to a new level. Taking these first steps will set you on the path of business-IT alignment – and AI success.
Does your IT organization continue to struggle with alignment to “The Business”? Let Tedder Consulting help you establish the strong foundation you need so that your organization will realize the business results required from its investments in and use of technology. Contact Tedder Consulting today for a no-obligation discussion about how we help!
[i] https://www.forbes.com/sites/forbestechcouncil/2023/10/06/why-business-leaders-should-understand-ai-alignment, Retrieved April 2024.
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