IT-To-Business Strategic Alignment Concepts Worth Sharing
By Gabriel Morgan, Sr Director of Enterprise Architecture and Business Analysis, REI
Keep calm, remember to follow the strategic planning model and avoid the chaos caused by the planning paradox. The planning paradox is caused by the situation when a company’s strategic planning process isn’t designed to achieve enterprise-wide strategic alignment. A common mistake is to build a strategic planning process by starting at the top of the organizational chart and work their way down until each level of the organization has a set of objectives and a budget to achieve it. This organization hierarchy-based planning process can only achieve intra-organizational alignment and not an enterprise-wide strategic plan. Inevitably, as each level of the organization scrambles to define objectives by performing business analysis to identify higher performance targets, then comparing that to their organization’s capacity to deliver, they often do a mad scramble to meet with groups upstream and downstream in the value chain to gain alignment to form a holistic enterprise-wide strategic plan.
Remember to sequence the company’s strategic planning process based on the company’s value chain. For each business, start from the customer and work your way back. When this happens, each organization in the value chain can define their performance targets for their function that is in support the enterprise’s success indicators; sales, market penetration, and customer satisfaction.
The image below is a visual model I’ve used as a reference to sequence the strategic planning process.
Technology can spearhead a company’s growth strategy and IT leaders are positioned to lead these business endeavors
The result is lessening the chaos that is naturally caused by top-down organization chart-based planning process.
There are other uses for the above diagram that I should go into further at some point but for brevity, here are a couple additional points it highlights:
• There are teams accountable for Corporate Strategy and they aggregate strategy formed by business groups within the company.
• Support organizations create their strategic plans to back each business strategy they support via adopting the cascaded business strategy. Therefore, support organizations share accountability for the supported business strategy in their supporting strategies.
IT as the company’s technology advocate. IT organizations have travelled a rough road. In the early days, IT’s value proposition was limited to tech support but then technology progressed to the point of being relevant to business function leaders allowing IT organizations to mature to business partners and take a co-ownership role to achieve greater business performance. Along this journey, there were threats to IT’s existence such as; IT’s business acumen gap forcing IT to struggle to maintain alignment to business strategy, viable IT outsourcers making the existence of an IT organization a choice to business leaders, and business folks directly implementing powerful SaaS applications without IT involvement making it difficult for IT to manage technology. IT organizations who have managed to weather these storms have figured out how to manage technology as a business function for the company. But that won’t be good enough soon. Technology and business trends continue to conflict and bifurcate, maybe even at an accelerated rate. Companies will need to bridge the gap between technology innovation and business growth, and IT is well-positioned to step up and fill this gap as a business leader for the company.
Technology can spearhead a company’s growth strategy and IT leaders are positioned to lead these business endeavors. It’s happening already. IT leaders are expanding their role to lead new digital businesses like two-sided marketplaces and ad-revenue generating community platforms. They are also shaping data as products for sale. And I might add all this while having to support the rest of the businesses within the enterprise. Companies who are leading in these spaces have embraced technology change and focused on preserving the crown jewels of their organization, their data, and wrapping them with systems designed for scale because they aren’t quite sure what business models they will need to support next.
We are in exciting times. Markets are changing rapidly and traditional businesses are being disrupted. Thankfully, computer technology innovation has accelerated and is accessible to the average IT professional. This is an opportunity. Your business needs you.