Ask the Expert: IT and Business: On The Same Side?

CXO: Why is IT-business alignment critical to a company’s success?

PB: In my opinion the term ‘IT-business alignment’ is badly phrased. Nobody speaks anymore about ‘aligning sales with the business’ because these functions are totally ingrained. IT has existed in business for several decades, but it appears that many still believe that IT has objectives that differ from the corporate agenda.

The divide that exists between the IT and business mindset appears to be a legacy issue that stems from poor communication. Today there are few businesses that do not rely on IT to deliver their products or services, yet IT and business planning remains commonly reactive.

On average IT spends 80 percent of its budget just to ‘keep the lights on’ and 20 percent on innovation. This ratio needs to be reversed. Business managers need to realise that effective use of IT can deliver measurable efficiencies and create real competitive edge. IT management needs to learn to communicate the value it can deliver in business terms. When IT and Business learn to communicate in terms that have real business relevance, the legacy mindset divide will be lifted and the true value of IT will be fully realised.

CXO: What approaches currently exist to help businesses address the issue?

PB: Best practice has created a framework that should allow these separate perspectives to converge. In 2004, the OGC published an ITIL booked called the ‘Business Perspective’, which assists IT management in a number of key areas. These include developing IT services to meet business objectives and exploiting IT resources to build an integrated culture supportive of change and innovation. The current Refresh (ITIL Version 3) adopts a much more holistic view, making a stronger case for ITIL and the business benefits that can be realised from adoption.

Recent research indicates that the Financial Services sector is demonstrating more maturity in terms of IT and business integration. Largely this is due to trade’s absolute dependency on IT and the massive financial impact of IT failure. IT Account Managers are often employed to provide the interface between IT and business customers. This extra communication effectively translates business goals into IT service requirements, demonstrating IT’s value.

CXO: Are there any pitfalls that should be avoided?

PB: If IT is to be seen to deliver real business value, it must learn to communicate its challenges and accomplishments in business terms. Many IT organisations adopting best practice focus on the back office processes that drive IT operations. Although these processes will certainly improve service, they can take quite a long time to fully implement, so the improvement is gradual and less visible to the business. If adoption is seen as an IT only matter, lack of business engagement can prevent full realisation of the benefits.

What is required is a top down definition of the services IT provides to the business, which identifies the components that need to be managed and monitored. In turn, this allows relationships to be established that accurately depict the service model.

CXO: What benefits will this provide long-term?

PB: The main benefit that can be derived from service modelling is that IT can publish the services provided to its customers via a non-technical Service Catalogue and report its achievements in terms that have business relevance. By identifying the components that constitute a service, the cost of the service can be made visible and demand for the service can be controlled. For example, if a particular service is comprised of legacy components that are costly to maintain, IT can create a case for replacing those components with more efficient technology at a lower cost. This contributes to demonstrable cost reduction, increased efficiency and service improvement. If IT management is not capable of identifying opportunities to demonstrate value, it faces the threat of an outsourced service provider delivering this same message to the board.

To summarise, IT needs to get out more and meet its customers. It needs to regularly speak with line of business managers to define service provision in business terms and ensure that delivery matches their expectations. IT managers have spent their lives learning to run IT and they now need to learn how to communicate the benefits of technology. Service desks are often manned by technical staff that view the role as merely a stepping stone in the advancement of their IT career and so little time is invested in advancing their customer service skills.

Gartner recently predicated that by 2010, 60% of IT technical functions would become customer-facing roles. This may be a rather extreme projection, but organisations are today are placing customer service skills at the top of the list when recruiting service desk staff. When you appreciate that the service desk is the customers’ first point of contact this, appears to be an obvious approach.

When IT speaks the language of business, the term ‘business alignment’ will be a thing of the past.