Aligning Business and IT Strategy
Recent surveys suggest that business strategy and success is increasingly being underpinned by a successful IT strategy. I have suggested many times on this blog ways and means to achieve an effective understanding of an IT strategy and landscape, but how do you assure your IT strategy is aligned to your business strategy?
For me the first step to any effective strategy is to understand the complexity and cost effectiveness of your current landscape of systems and processes. Formally mapping out how your systems and processes align to the key components in your business (such as the business process value chain, your locations and your business products) can tell you a lot about where your inefficiencies are. Tools like ours at www.strategy4it.com can help visualise the areas that are driving up cost or causing process inefficiency. Take a simple example – you have multiple finance systems, system versions and processes servicing different parts of your business which will hinder cross location budgetting; our tool will highlight areas of concerns and targets for investment and change.
Once you have evidence of where you are today you can see what does not match your objectives – assuming of course you have clear objectives! It is amazing how many organisations do not have a clear “top 10” list of business goals. Start by formally drawing up a list for your company – some will be easy like ‘maximise revenue’ or ‘minimise cost’, but others maybe less obvious: ‘maximise cross selling’, ‘ease speed of acquisition’ or ‘maximise flexible staff working’. Do not be afraid to have some conflicting objectives but do make sure that your objectives are quantified or measurable in some way, and put them in an order of priority.
Armed with your set of objectives you can start to assess each of the key areas and components in your company in turn from the maps I mentioned above. By identifying which areas are meeting the objectives and which are failing and looking to the options available you can start to form a roadmap for change. I suspect that with this information in hand you will see that the areas of highest complexity are likely to drive the greatest inefficiency, and are the areas most adrift from corporate objectives. Documenting the areas of most concern and then agreeing the levers that can be pulled to change the landscape in these places to align them better to the objectives will be the core of an effective strategy. Taking my previous example, if finance systems are not interlinked and standardised between locations this may affect the key information on sales commissions. In turn, a limit on the increase of cross selling within the business will not achieve a revenue related objective. Maybe a simple investment to align the versions and introduce some cross reporting would result in higher sales?
I hope this short overview shows how following a disciplined method to examine a business end to end, applying both rigour and imagination could achieve a major positive impact and develop a clear plan for improvement.