Aligning Business With IT and IT with Business – Part One

The following excerpt is taken from “Aligning Business with IT and IT with Business”

Systems Tend to Cause their own Behaviour

A History Lesson and a Sea Change

Today business cannot breathe without technology.

You would be hard pressed to find a commercial or governmental enterprise that that does not as a matter of course rely entirely and completely on the intricate and extensive deployment of new or existing technologies.

If the system fails, the business stops (breathing).

As a result, today the traditional custodians of the technology, the modern day CIO and senior people in the IT function no longer find themselves hidden in the shadow of the chief financial officer.

They, or at least a large majority of them, have assumed significant leadership roles within their organizations and generally report to the CEO or some other top business executive.

This of course was not always the case.

Prior to these rather recent developments, IT typically exercised a subservient and reactive role, supplying systems and services in response to explicit business demands.

This was alright back in the early days of commercial data processing, when the main requirement for IT was the automation of clerical procedures.

But the historical chasm between IT and business is no more; for all practical purposes, the two are one and same (two sides of the same coin and so forth) even if they might not always know it or show it.

 

The IT/Business Divide Requires Radical Changes in the IT Function

The contemporary IT organization has evolved into a demand-driven entity that must be ferociously focused on business results rather than being a fiefdom that merely manages technology.

There are still of course pockets of IT managers who cannot answer even the most rudimentary questions such as:

• What does it cost to run the supply chain or the manufacturing plant?
• How can we measure whether business change initiatives have achieved expected cost, time or quality goals?
• Even more lamentably, the IT/Business relationship is still in some corners bedeviled, beguiled or afflicted by all too common inefficiencies and problems such as:
• The business being frustrated with IT and doesn’t understand what it is getting
• Increased incidence of finger-pointing and blame between the two entities
• IT spending money on infrastructure and new software versions when said solutions do not directly impact the business’s needs
• Low scores on IT customer satisfaction surveys
• Slow, cumbersome processes for getting anything done through IT
• The IT organization that wants to be cutting edge needs to change this.

In The Phantom of the Operation: How to Get rid of the Silos in your Company, I detail the systemic process with which you can help your organization come together as one team.

This particular article/workshop addresses how to help IT and Business become more aligned.

If you are not in the place to have the entire operation become realigned, but are concerned nonetheless about these two groups, then you might consider what many companies are doing to achieve this objective, the Business Relationship Manager.

 

The Four IT/Business Relationship Models

In a word, the IT organization should help the business to exploit opportunities and counter competitive threats enabled by technology.

There are four Business/IT relationship models you can use to meet this challenge.

Those operating systems or models are:

1. Passive:

The Business Orders and IT Delivers If the Budget Permits

2. Provider:

The Business Chooses From a Menu Provided By IT

3. Partner:

The Business Improves Performance Using the Advice and Counsel of IT

4. Peer:

Business Leaders Who Are Also Technology Leaders Help Lead the Business

Each successive role involves a more proactive style of interaction with the business.

In order to meet the needs of the business, the CIO and his team must decide which of the four operating systems or model their organization will use.

 

The Four Distinct Models for Business/IT Collaboration

1. Passive: The Business Orders and IT Delivers If the Budget Permits

In the Passive relationship, business executives decide how they want to spend ‘their’ IT budget, and when the money runs out, the work simply stops.

In other words, the IT function does what it is told to do, as and when budget allows.

IT supplies systems and services in response to explicit business requests, much as IT outsourcing firms do for many firms today

However, with this model, IT and business work in isolation and business will often communicate directly with different IT managers and departments.

The business wants no more than an arm’s length transaction based relationship with IT.

In many such organizations, IT has ‘account managers’ who take orders, or else IT expects the business to engage directly with representatives of several IT functions.

These are, however, not true Relationship Managers (BRMs).

 

2. Provider: The Business Chooses From a Menu Provided By IT

Business and IT continue to work largely in isolation.

They each appoint a liaison on both sides who is expected to bridge the gap.

This model includes exploring and introducing new technologies relevant to the business, staying aligned with new hardware, software and internet service vendor offerings

In this relationship, a ‘business buyer’ plays the role of the sourcing manager in a strategic sourcing organization.

There appears to be no consistent name for this position.  Within business units terms such as “business systems manager” and even “account manager” are used.

The buyer is usually responsible for aggregating and communicating business requirements to IT.

This is often the case in companies with several business units where a staff person reporting to a business CIO buys IT infrastructure services from a central supplying unit.  In the Provider model, the BRM from the IT function mirrors the responsibilities of the business buyer.

While BRMs are generally chosen for their experience in planning and executing IT projects or services, the critical skill they bring to this role is the ability to manage and set expectations.

 

3. Partner: The Business Improves Performance Using the Advice and Counsel of IT

The BRM in a Partner role serves as a consultant to the business.

IT (the BRM) is regarded as having a specialized, business enabling role on the management team.

In this model the BRM:

Participates in planning business and IT work together to achieve joint business goals

Facilitate the discussion of business objectives

Educates the business on available technology

Plan the change programs needed to deliver the desired business capabilities.

Acts as an agent of change within the business, in conjunction with or as an alternative to external management consultants.

The business in turn agrees to go through the (sometimes painful) exercise of defining objectives in sufficient detail to enable the BRM to provide meaningful advice.

As importantly, the business agrees to provide the time and resources needed to implement the change programs.

 

4. Peers: Business Leaders Who Are Also Technology Leaders Help Lead the Business

The truth is that companies need to stop thinking and talking about “the business” as something to which you need to
align, and start thinking about it as something of which IT is a part.

The Peer relationship reflects and embodies that principle.

tIn a peer relationship, the board of directors seeks new leaders to exploit IT enabled opportunities in the marketplace.

A Peer BRM must demonstrate the leadership skills and business knowledge to buttress his or her position as the business leader who can also manage or direct the IT organization.

Peer BRMs come to this role with a wide range of business and IT experience to establish their credibility.

The BRM is a member of the senior management team participating in all strategic planning.

Business and IT responsibilities are fused, at least at the top management level.

An IT expert is recruited to the top leadership team to drive business innovation and growth.

The BRM is one among equals; he or she is expected to help the top team become technology literate.

 

The primary focus is on the needs of the external market.

 

This role also includes advising and guiding business executives on the strategic impact of IT, much like an outside board-level director.

They spend much of their time in industry meetings where they can network with their customers and suppliers.

They are accountable for the IT organizations but delegate responsibility to their lieutenants whom they trust to deliver the capabilities that will support the business strategy.

The Executive or BRM Peer can have a profound impact on an organization’s competitive positioning as senior IT people advise business management on the impact of IT at a strategic level.

So there are four business models Passive, Provider, Partner and Peer.

In the next post, Part Two, we will explore the Business Relationship Management role and how your company can better align business and IT.

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