Like many IT leaders, RJ Juliano does not distinguish between technology goals and business goals, but rather sees them as one and the same.
“We need to go far beyond the goals being uniform and indistinguishable,” said Juliano, senior vice president and chief information and marketing officer at Parkway Corp., a parking garage operator and real estate developer in Philadelphia.
In Juliano’s experience, a combined IT business approach builds stronger teams, promotes meaningful dialogue, and ensures competitive advantage and long-term business and brand sustainability.
“The right relationship accelerates and enables the achievement of organizational goals, engages customers and employees, and drives innovation in both products and processes,” he said, adding that separating technology from business results usually has the opposite effect.
Sharon Stufflebeme, managing director in the technology advisory practice of consultancy Protiviti, said the role of the CIO today is to anticipate, influence and implement the company’s business strategy.
“But CIOs can’t anticipate, influence or implement things if they don’t understand the needs,” she said. For this to be successful, there must be alignment between IT and business across the entire company.
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What is IT business alignment?
Executives, business consultants and researchers have long emphasized the need for IT and other business functions to align their priorities and strategies.
Information technology is no longer a supporting player in the company, but part of the main engine. In fact, computer technology has been driving business growth for decades, with the Internet and digitalization transforming both the way people work and the way they interact with organizations and each other. That’s why alignment between IT and business is critical to business success.
“It’s the assurance that the technology being deployed will enable business success,” said Rebecca Gasser, CIO of Omnicom Health Group, about the benefits of IT business alignment. “Some of it is fundamental, like networks and infrastructure, but a lot of it is the technology that gives the company a competitive advantage,” she said.
Although IT-business alignment is now widely viewed as critical, it wasn’t the norm in most organizations until just a few years ago, said Darren Topham, senior research director at Gartner, a technology research and advisory firm.
In its early decades, the IT department focused on providing computer hardware, software, and services as a utility. Under this paradigm, technology is a tool that supports workers in their usual tasks, with reliability and availability being the key measures of IT success, Topham said.
However, this paradigm has evolved over the years, and particularly in the 21st century, as more and more technology executives joined forces with their C-level and business colleagues to use technology to redesign work, products and services.
This led to a series of disruptions as startups introduced entirely new business models and legacy companies changed their own processes and market offerings.
CIOs and their IT teams must continue to provide useful technology services, Topham said. But they also now need to be able to strategize how technology can influence the company’s product and service offerings and the way it delivers those offerings.
“This is where the alignment manifests itself,” he explained. “Here, everyone from both sides contributes something for the benefit of the community. There is no ‘them’ and ‘us’.”
Topham added: “The ultimate expression of this is the term.” digital business.”
Why is IT business alignment important?
IT business alignment ensures that the IT organization and business units work together and move in the same direction at the required speed.
“Technology can be exciting, but it is often expensive and not as useful as originally hoped. By collaborating and aligning, the company and the technology team can ensure that the ROI is there, supported and fit for the right purpose of the business,” Gasser said.
Surveys and studies prove the importance of IT business alignment.
According to the Gartner report, “The role of the CIO in preparing for the acceleration of digital business“More than 70% of executives “recognize digital technology as an integral part of revenue generation, product development, customer loyalty and the advancement of strategic operational processes.”
In its “2021 Evolution of CIO Responsibilities Survey,” Gartner found that 83% of CIOs surveyed said they are “increasingly working on enterprise-level initiatives that go beyond their traditional IT delivery leadership roles.”
In the meantime, “The IT job is changing in an age of change“A 2021 Economist Intelligence Unit report based on a survey of more than 1,000 IT decision makers and senior executives found that 83% believe adapting to external changes requires a moderate to significant improvement in IT infrastructure and apps required.
“IT needs to serve every business function because technology is now ubiquitous,” said Protiviti’s Stufflebeme. Aligning IT with the business ensures the organization gets the right technology at the right time to meet its key performance indicators and achieve its business transformation goals – whether that’s improving customer service or generating new revenue streams acts.
Stufflebeme said the lack of alignment between IT and business creates significant barriers to companies’ market success.
“If there is a lack of alignment, the technology may work, but it may not deliver the result the business needs,” she said. “You have solutions that end up being bridges to nowhere, you have business problems that aren’t being solved properly, or you have business initiatives – whether to save costs or increase efficiency.” [program] – that are not carried out properly.”
What are the benefits of IT business customization?
Experts cited the following benefits of aligning IT with business functions:
- It reduces digital friction because IT is able to deliver technologies that are easier for employees, customers and partners to use. “This has a huge impact on an organization’s goal achievement and productivity,” noted Topham.
- Customer loyalty, cost reduction and productivity improve.
- Companies gain greater insight into vulnerabilities in both business processes and the technology that supports them.
- It drives innovation as teams are better able to identify problems and opportunities that can be addressed through the use of technology. “You get to the concept of co-creation, and that creates more value for the organization,” Stufflebeme said.
- This results in shorter delivery times and accelerates time to market through increased collaboration and innovation.
- It increases the ability to deliver technology that drives business strategy and goals.
- It provides a competitive advantage in the market.
Aligning IT and business gives a company an edge, said Jo Ann Saitta, managing director of EY Business Transformation Consulting, health sciences. “It allows [the enterprise] to stay up to date or even be one step ahead of the times.
What are the challenges in IT business alignment?
Despite the critical importance of strategic alignment between IT and business functions, Stufflebeme said many companies still find it difficult to achieve this.
She and others cited a number of obstacles and challenges that leaders and their teams face on this front, including the following:
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Lack of trust and credibility between IT and business leaders: “The biggest challenges are having a CIO who strives for and creates unity.” [between IT and the business] and having a company culture that also expects and encourages this unity,” said Juliano;
- Reluctance on the part of IT or the business to relinquish control or invite input into functional areas: Some CIOs still take a command-and-control approach, while some organizations still have a culture that sees technology only as the domain of IT said Topham. and adds that both mentalities need to change to reach agreement;
- Lack of business acumen within the IT department;
- Lack of technology skills across all business functions;
- IT’s inability to understand how technology initiatives can support business objectives;
- IT’s inability to communicate how technology initiatives can support business objectives; And
- IT’s inability to calculate the financial impact (costs and ROIs) of technology initiatives.
Best practices for IT business alignment
To overcome such challenges, experts offered the following best practices:
- Create shared responsibility and shared value between IT and business. “This can no longer rest solely on the shoulders of the CIO,” Topham said, adding that CIOs should train functional leaders to manage their own technology portfolio to support shared responsibility.
- In addition to being good communicators, develop good listening skills. “It helps you understand what the current state is and what would look great in a future state,” Saitta said.
- Integrate technologists into the business units and ensure that IT staff interact directly with their counterparts in the business units by attending meetings and adopting Agile and DevOps practices that promote collaboration. “Then technology becomes a natural part of the business,” Saitta said.
- Incentivize employees across the organization to work toward collaboration between IT and the business.
Such practices, Juliano says, can bridge any gaps between IT and its business partners and help the organization reach a point where the two are, in his words, “unified and indistinguishable.”
All major goals are shared goals, he emphasized, adding that joint collaboration between IT and business must go beyond simply agreeing to common goals and include shared responsibility for results.