{"id":2966,"date":"2009-07-20T14:22:47","date_gmt":"2009-07-20T19:22:47","guid":{"rendered":"http:\/\/www.redmonk.com\/cote\/2009\/07\/20\/alignment\/"},"modified":"2009-07-20T14:22:47","modified_gmt":"2009-07-20T19:22:47","slug":"alignment","status":"publish","type":"post","link":"https:\/\/redmonk.com\/cote\/2009\/07\/20\/alignment\/","title":{"rendered":"Business IT Alignment"},"content":{"rendered":"<p class=\"pic\">\n<a href=\"http:\/\/www.flickr.com\/photos\/cote\/3708573912\/\" title=\"Weird devices at SFo by cote, on Flickr\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/farm3.static.flickr.com\/2455\/3708573912_2644275780.jpg\" width=\"500\" height=\"375\" alt=\"Weird devices at SFo\" \/><\/a><\/p>\n<p>A short while ago, <a href=\"http:\/\/www.vickipowers.com\">a Houston-based freelance writer<\/a> tracked me down in email to ask a few questions about a favorite marketecture question, what exactly is &#8220;business IT alignment.&#8221; It seemed like a good chance to write-up the thoughts on the topic, and repurpose the content here:<\/p>\n<h2>Why is business strategy and IT often at odds within organizations?<\/h2>\n<p>The cultures of these two parts of a company are often in conflict.<br \/>\nSpeaking in the broadest sense of the term, &#8220;IT&#8221; is still very much so<br \/>\na black box to the rest of the world. While companies like Facebook<br \/>\nand Google seemingly deliver software and services at the speed of<br \/>\nlight, the process for creating the software and services that<br \/>\nbusinesses use is not as flexible. Computers and software require very<br \/>\nprecise instructions, and the humans who support them tend to follow<br \/>\nin that train of thinking. The business side of the house tends to be<br \/>\nvery imprecise in comparison, and cannot always articulate what it<br \/>\nneeds from IT in a narrow enough way. The result is a communication<br \/>\nproblem from the start.<\/p>\n<p>Also, producing software and other IT to<br \/>\nsupport the business is still a very long process. Business needs, on<br \/>\nthe other hand, change very rapidly, often several times a year. What<br \/>\nhappens here is that at the start of an IT project, the business will<br \/>\nwant one set of requirements, but these evolve over time to match new<br \/>\ncustomer demand. Often, during the project, these changing priorities<br \/>\nmismatch with the development IT is doing. By it&#8217;s nature, most IT is not<br \/>\nflexible enough to adapt to change.<\/p>\n<h2>What are the risks when IT and business strategy aren\u2019t synced up?<\/h2>\n<p>There are several:<\/p>\n<ul>\n<li>Delivering Bricks &#8211; IT projects not delivering software and services that are actually<br \/>\nvaluable to a company&#8217;s customers and, thus, profitable to the company<br \/>\n&#8211; often times, IT may be doing its best to shoot for this, but by the<br \/>\ntime the project is out it&#8217;s not flexible enough to change as needed<br \/>\nor it may have missed a market window.<\/li>\n<li>Wasting money on un-valuable IT &#8211; removing unprofitable<br \/>\ninfrastructure is difficult, &#8220;IT never goes away,&#8221; is a common quip.<br \/>\nIf the business is not constantly asses the value various IT assets<br \/>\nare giving the business, it could be wasting money. The problem is<br \/>\nthat getting the raw data to make these decisions often seems<br \/>\nextremely costly in the short term. If a business manager is bonused<br \/>\non their short-term profit-making, there&#8217;s no need to worry about long<br \/>\nterm problems, so you save that money in the short-term by not<br \/>\nspending it. And, who knows where a business person may be in the long<br \/>\nterm anyhow, so why should they worry about long-term problems?<\/li>\n<li>IT is at risk of loosing funding &#8211; if IT is not obviously<br \/>\ncontributing to a company&#8217;s bottom line, they&#8217;ll get less and less<br \/>\nfunding and may even be out-sourced.<\/li>\n<li>Lost opportunities &#8211; often times, the business side of the house<br \/>\ntends not to view IT as a strategic asset. They may not be asking,<br \/>\n&#8220;how can we use technology to make more money?&#8221; This is because of<br \/>\nmultiple reasons, but usually comes down to poor visibility into IT<br \/>\nand trust lost over past project difficulties. IT may also not be<br \/>\nstaffed correctly to be strategic to the business:<\/p>\n<ul>\n<li>do IT managers understand<br \/>\nthe market dynamic their company is in, and can they imagine new<br \/>\ntechnologies that would allow them to capture more cash from existing<br \/>\nand new customers?<\/li>\n<li>Does IT even have the time to think about that?<\/li>\n<\/ul>\n<p>At the same time, elder companies (like telcos and cable companies, as<br \/>\njust one example) are struggling to differentiate themselves in the<br \/>\nmarket and need to look beyond played-out brand and &#8220;life-style&#8221;<br \/>\nmarketing to snatch the harder to grab cash in contemporary markets.<br \/>\nWhat they need are new &#8220;features&#8221; to their nearly commoditized<br \/>\nofferings and actual, concrete, real reasons for customers to given<br \/>\nthem money in return for products or services.<\/li>\n<\/ul>\n<h2>What steps can organizations take to best align business strategy with technology and turn IT into a competitive advantage?<\/h2>\n<p>The first step is to start with IT. People in IT need to understand<br \/>\nhow what they do day-to-day helps make the company money and, thus,<br \/>\nkeeps them employed. IT staff need to think like the business &#8211; as<br \/>\nhorrifying as that can be to the more purely engineering types &#8211; and<br \/>\nstart to <i>want<\/i> to participate in the business cycle, that is, making<br \/>\nmoney. Once IT can speak about the actual business of the company,<br \/>\nhopefully bringing some new ideas to the table, they can start to win<br \/>\nover the trust of the business.<\/p>\n<p>Next, the business needs to actually fund IT to further this<br \/>\ntransformation. You can&#8217;t view IT like the office supplies department:<br \/>\nthey do much more than stock the closets with pens and staples. The<br \/>\nbusiness side has to understand what IT is capable of and, more<br \/>\nimportantly, be imaginative enough to push IT even further.<\/p>\n<p>As a clich&eacute; example, you can look at Apple and AT&amp;T. In the area the iPhone<br \/>\nplays in, AT&amp;T is really a commodity product &#8211; in any given US city,<br \/>\nthere&#8217;s a blizzard of other options that, really, are just as good, and probably cheaper. By<br \/>\nteaming up with Apple, AT&amp;T was able to use IT (the iPhone and having the web in your pocket) to drive<br \/>\n<a href=\"http:\/\/www.macrumors.com\/2009\/07\/20\/apple-estimated-to-account-for-20-of-cellphone-industry-profit\/\">much new revenue and new customers<\/a>. And, as a delicious dichotomy, <a href=\"http:\/\/www.techcrunch.com\/2009\/07\/18\/att-is-a-big-steaming-heap-of-failure\/\">AT&amp;ampT seems to be blowing itself up real good<\/a> by not allowing poor service\/IT and stifling <i>innovation<\/i> on the platform.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A short while ago, a Houston-based freelance writer tracked me down in email to ask a few questions about a favorite marketecture question, what exactly is &#8220;business IT alignment.&#8221; It seemed like a good chance to write-up the thoughts on the topic, and repurpose the content here: Why is business strategy and IT often at [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,17,34],"tags":[],"class_list":["post-2966","post","type-post","status-publish","format-standard","hentry","category-enterprise-software","category-marketing","category-systems-management"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/posts\/2966","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/comments?post=2966"}],"version-history":[{"count":0,"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/posts\/2966\/revisions"}],"wp:attachment":[{"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/media?parent=2966"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/categories?post=2966"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/redmonk.com\/cote\/wp-json\/wp\/v2\/tags?post=2966"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}