CIOs are not in the dark when it comes to knowing that their organization should be aligned with the rest of the business. They understand that their strategies, organizational capabilities, and resources need to support the entire business. If executives know that IT business alignment is essential — what is holding them back? According to an article in the Harvard Business Review, How Aligned Is Your Organization, the challenge is that executives focus individually on different areas — strategies, organizational capabilities, resources, or management systems. Instead of seeing how each aspect is operating individually, it’s time to evaluate how all of these things fit together.
Authors Jonathan Trevor and Barry Varcoe use McDonald’s as an example. The large fast-food chain serves more than 70 million customers around the world every day. Having scalable processes is not just nice to have, it’s an absolute necessity. McDonald’s perfectly executes what Trevor and Varcoe call enterprise alignment. According to the authors, enterprise alignment connects your company’s purpose, business strategy, organizational capability, resource architecture, and management systems.
McDonald’s corporate focus on enterprise alignment reiterates what many CIOs already know but may have difficulty implementing: that IT should be treated as a living puzzle with many interconnected parts. Now let’s discuss how your organization can transform your existing structure of separation into your very own enterprise-aligned operations.
Put the IT Business Alignment Puzzle Pieces Together
One of our customers, a large financial services provider with branches in more than a dozen states, faces constant pressure to remain innovative and support the new technological demands of their users. To better address these challenges, the company’s CIO launched a digital transformation and embarked on a mission to emphasize technology and data in IT’s culture.
IT leaders sought a way to track critical application health for key services in order to reduce business risk and cost of downtime. By leveraging IT business analytics, they were able to combine change, outage, and financial data to track potential revenue losses for their top 10 business services. IT used this data to predict potential production instability and to make better financial and resource allocation decisions across IT operations.
Their team set out to improve application health and minimize revenue-impacting events, increase transparency across IT operations, and actively move to a data-driven IT strategy — turning data into insights, then into actions. In the end, addressing these specific challenges positively affected their broader business strategy.
Time to Master Digital
Regardless of how difficult ‘mastering digital’ sounds, your organization can (and should) overcome this hurdle. In a Forbes article about the top 10 strategic priorities of 2017, they suggest to not just facilitate your company’s digital transformation but lead it. Data from a 2017 Gartner survey shows that CIOs are modifying their investment pattern in response to the need for digital transformation. A typical CIO is spending 18 percent of their budget in digitization, but that number is expected to increase to 28 percent in 2018. Businesses that have already fully adopted digital technology into their planning process are spending 34 percent of their IT budget on digital.
Our customer — the large financial services provider — approached the issue of digital transformation, and it helped them better succeed at business alignment. Before undertaking the task to digitize, the company was stuck in manual processes and lacked connectivity across the org. This left leaders in the dark on how IT was performing and whether it was aligned with broader business initiatives. By connecting IT systems and analyzing project details, they were able to get a higher-level view of operations. This allowed IT executives to pinpoint where their operational strategy mirrored business needs — and where they needed to get back on track.
Hand in hand with this digital transformation comes the understanding of how this change aligns with the business — one will not be effective without the other. The same survey cited above shows that, together with their CEOs, high-performing CIO leaders share a focus on growth and digitization — perfectly illustrating that business priorities need to be set so the IT organization knows what their goals are.
Move Out of the Dark for a Clearer Perspective
We are entering an interesting time in IT leadership. Back in the day IT ran almost as a separate organism from the rest of the organization. While functions like marketing, sales, and finance were working toward the same business goals, IT was the black sheep. IT was there to support, but not accounted for in the business partnership.
Now CIOs have the opportunity to not just be a presence at the business table, but to influence overall enterprise goals. Going back to McDonald’s: they win at business alignment because they execute a tightly managed enterprise value chain. Their IT leaders make sure they know what their company’s business strategy is and what they must do to fulfill their overall purpose, coupling this with management systems and a full understanding of what tools they need to deliver a winning performance.
CIOs may no longer be in the dark ages where being a partner to the business is a ground-breaking idea, but there are ways to improve execution of this concept. If you want to learn more about the best practices and tools you can use to better align IT with the enterprise, join me for part three of our Webinar Series on 8/24 at 10am PT/1pm ET. My colleague, Ryan O’Shea, and I will dive deeper into business alignment, prioritization, and compliance.
[Photo credit: Pexels.]