Getting Strategic: Understanding the Difference Between IT Business Alignment and IT Strategic Alignment
Introduction
IT Business Alignment and IT Strategic Alignment are two important concepts that must be considered when developing an effective IT strategy. While similar and related, the two concepts are distinct and it may help to think of them respectively as “micro” vs “macro” in terms of scope.
IT Business Alignment focuses on the alignment of information technology resources within its business processes. Meaning that all of the organization’s technology assets of all business units are working together to meet the same business goals.
On the other hand, IT Strategic Alignment involves aligning the IT strategy with the overall business strategy. It involves establishing organizational goals for how technology can help achieve key organizational objectives and guide the choices made for IT Business Alignment.
Understanding IT Business Alignment
IT business alignment focuses on the “trenches” of business operations, in other words, what specific technology is being used to achieve the particular outcome of a business unit. Take for example a common IT business alignment in a sales department workflow:
The salesperson uses a CRM software to track the sales pipeline
The CRM software is connected to an accounting software that automatically generates invoices when the salesperson moves a lead through the sales stages
A payment software is takes and processes payment of the invoice, sending an update of payment status back to the accounting software
The accounting software changes the payment status of the customer in the CRM
Since the various components in the workflow are all aligned, the individual salespeople only have to focus on their core selling responsibilities to the customer instead of any internal process. If any one of these IT components are missing, the workflow becomes fractured because the required process becomes manual (eg. tracking customer data in Excel).
How IT Strategic Alignment Differs
Many organizations have implemented some iteration of the workflow in the example above, but the question is whether it was done in conjunction with the overall business strategy. The answer to this question is where companies with IT strategic alignment differentiates themselves.
Using the sales department scenario above, IT would be aligned with the business strategy if, for example, the business was looking to rapidly scale its customer growth while keeping employee costs down. In this case, the automated workflow that has been implemented can increase sales without necessarily having to scale the sales team in tandem.
On the other hand, if the current business strategy was to focus on decreasing the cost to manufacture its products, the sales automation would not be aligned with the immediate direction of the business. So while the sales department would be happy with a useful tool, the company did not best allocate resources to an area of IT that would further its strategic goals.
Implementing an IT Strategic Alignment
The first step in creating an effective IT alignment strategy is to conduct a software audit. This involves evaluating the current state of the organization’s technology assets and software, as well as their relationship to its business objectives. During this process, key stakeholders should evaluate each asset’s contribution towards reaching organizational goals, which will allow them to identify areas that work well or need improvement. Additionally, organizations can also use this information to prioritize initiatives based on their potential return on investment.
Once a strategy has been formulated and assets have been aligned with organizational objectives, it is important to establish clear roles and responsibilities between all stakeholders who are involved in the IT alignment process. Implementation can only see success if there is buy-in with the people involved, since any change to workflow impacts their day-to-day. If the buy-in isn’t there, then the plan should be revisited and tweaked to achieve consensus.
Finally, establishing metrics for measuring success is essential for any successful IT alignment program. By setting specific targets that measure how well new strategies are performing against expectations executives can make sure they are getting maximum value from every dollar spent on technological investments moving forward.
However, it is important for decision makers to not only consider quantitative data such as financial returns. Qualitative measures such as employee engagement or customer experience ratings should also be considered valuable metrics. Especially since research has shown that positive sentiment around technology can go a long way towards improving overall business productivity and efficiency levels. By taking into account all aspects of how well technologies are performing within an organization during review sessions – including both tangible ROI figures along with intangible benefits like user feedback - business owners can get a full picture of whether or not resources invested in alignment efforts have paid off thus far or need revisited so better decisions can be made further down the line.
Conclusion
Establishing an effective IT alignment strategy can help organizations reap a variety of benefits. Not only will it enable them to more effectively manage their technology assets and resources in order to achieve maximum returns on investments, but it can also foster greater collaboration between departments. Additionally, having clear objectives as well as performance metrics that measure how well new strategies are performing against expectations allows business owners to make sure they are getting value from every dollar spent on technological initiatives moving forward. Finally, with all these pieces in place companies can ensure that their business strategies and IT efforts remain closely intertwined over time so they continue driving positive outcomes throughout their entire lifecycle of operations.
