Business to IT Alignment – A Practical Discussion

Business to IT alignment is an objective that most technology and business leaders would agree as essential for agility.  However, ask for a definition of Business to IT alignment or how to implement an alignment strategy and the likely results are conflicting information and vague guidance.  In the following blog I will try to add clarity to this topic as well as provide practical guidance.

Definition

Let’s start with a basic definition of Business to IT alignment by addressing some common misconceptions.  Business to IT alignment is far more than just Project Portfolio Management (PPM).  Business to IT alignment consists of several domains:

Knowledge Map for Alignment

Business – IT Alignment Domains

Several Tier I & Tier II ERP software vendors provide software solutions to address certain Business to IT Alignment requirements, including PPM and Communications (social collaboration).  However, it is important to remember that technology alone is not the answer.  Collaboration tools can be used to generate more noise than effective communication.   Also consider that having strategic initiatives stored in a common platform (ex. PPM) does not mean the all stakeholders share a common interpretation.    

Just as Business – IT alignment is more than just PPM, enterprise governance is much more than just IT governance.  In simple terms, enterprise governance is a process that ensures that enterprise capacity (Business, Operations, IT) are working on the right things at the right time to enable business goals. It’s a set of guidelines that focuses on organizational success while managing associated risks.  Alignment is hard to achieve when governance is not consistent across the enterprise.  Knowledge transfer is the most underestimated and misunderstood area.  Effective knowledge transfer is more about education and trust than software and templates.  Before one can be successful with Business – IT alignment it is important to fully appreciate the scope and breadth of effective alignment.  A viable alignment strategy must address the key challenges listed in the next section.

The Challenges of Business to IT Alignment

Consider the following alignment model.  This is a very simple model that I would like to use for discussion purposes.

Governance Model

Business – IT Alignment Governance Model

Allow me to highlight some key challenges associated with the traditional alignment model provided.  First is the notion that Business and IT operate separate silos.  Notice in the example above that there are separate Business and IT goals.  Thus, there must be an exercise to reconcile Business goals and IT goals to identify commonalities and gaps.  Practically speaking, given the level of effort required to align these separate strategies, a reasonable conclusion is that alignments occur periodically based upon corporate milestones.  This is where the model breaks down because effective alignment must be a daily activity.  Every business request from strategic initiatives to daily support tickets is an opportunity to reinforce alignment.  Another possible concern implied in this model is that the majority of alignment effort happens at the enterprise level.  Sustainable alignment must happen at every level within the organization.

A results-oriented alignment strategy must address the inhibitors of alignment.  Consider the following relationship between alignment and communication:

Alignment and Communication Inhibitors

Alignment and Communication Inhibitors

Success alignment requires successful communication.  Successful communication requires the effective use of all the key communication skills

Key Communication Skills

Key Communication Skills

Process is important but the soft skills like communications, emotional intelligence (empathy), and knowledge transfer will have the greatest import on long-term alignment success.

Practical Steps to encourage Alignment

Before you can start implementing practical steps you need to assess the level of alignment within your organization.  The Strategic Alignment Maturity model referenced below was developed by Dr. Jerry Luftman and is based upon the Capability Maturity Model Integration (CMMI).

CMMI - Strategic Alignment

Strategic Alignment Maturity

Once you have identified your current maturity level then you can devise realistic, increment steps to move forward to the next maturity level.  It is also important to periodically assess your organization’s alignment.  What gets measured gets done!

Summary

Why is Business to IT Alignment so hard? Consider the following statements to highlight  the key challenge with alignment.

Business vs IT Value Perspective

Business vs IT Value Drivers

Is Business to IT alignment an impossible goal? No, as long as a practical, measured approach is taken to achieve tangible results.  Business to IT alignment is a strategic goal that can only be reached by taking tactical steps to bring Business and IT closer together to generate mutual understanding and trust. When alignment is achieved communication is effective resulting in valued partnership.

IT to Business Alignment for ERP implementations

You’ve decided on the ERP software you need, the Business side has bought into it, and you’ve even picked your Implementation Partner. Now the hard work begins: Making sure that your software deployment strategy sets your company up for success, and that means making sure Business, IT and the Implementation Partner are all speaking the same language.

Increasing knowledge transfer and collaboration between business and IT

Driving IT to Business Alignment

First, we need to understand that Business, IT, and the Implementation Partner are coming from different perspectives.   Every party has a knowledge gap to address.  Business best understands their existing business model and the underlying success drivers.  The Implementation Partner understands the ERP software and has multiple years of implementation experience.  IT best understands how technology supports the existing business model as well as how best to utilize existing corporate IT technologies.  Alignment is generated only when a common understand of the business model, ERP software, and technology capabilities are shared by all three parties.  When this alignment occurs there is effective communications and faster decision-making.  Decisions move implementations forward. 

Following is a recommended set of steps to develop a common understanding for effective collaboration:

  • Document existing business processes

It is an area that I see many ERP implementations lack.  The typical challenge I hear is “Why document my existing business processes if I know they are changing?”  Here are my reasons:

  1. Business users usually do not have a consistent understanding of their business model.   Going through the exercise of documenting business process will highlight these differences and drive deeper understanding.
  2. Documenting the existing business model will enable you to highlight the EXACT organizational changes that will occur.  How can you manage organizational change when you do not have a clear understanding of what’s changing?
  3. Business process maps can be a key source of information to quickly educate IT and the Implementation Partner on the existing business process model.

 

  • Educate IT and the Implementation Partner on the existing business model

Business should take a formal, iterative process to educate IT and the Implementation Partner on the existing business model.  The entire project team should be involved in this training and should progress from a solution-level overview to a detailed business-role level.   Following is a suggested approach for conducting this training:

Level Description Suggested Duration
Business Solution Provide an executive overview of the existing business processes, systems, and organizations that make up the existing business solution. 4 hours
Business Process Provide a work flow of business activities that result from a business event.  Key variations and exceptions should be noted. 2 hours for each business process
Business Activities grouped by Role Provide a “day in the life” experience for key roles that support the business solution. 1 hour for each role

 

  • Complete ERP software training BEFORE the Implementation Partner arrives

Just as it is important for your Implementation Partner to understand your business model and your language it is important that Business and IT have an understanding of the ERP software and its language.  Effective communication is a two party effort.  Taking the required ERP training before the arrival of your Implementation Partner will enable you to more effectively work together.

  • Have the Implementation Partner conduct supplemental ERP software training

Education is an iterative process – you will never learn everything you need to know for supporting ERP  in one training class.  ERP vendors only provide foundational training.  I always say that the Implementation Partner completes ERP training for the customer.  Implementation Partners have hands-on experience with configuration and maintenance of ERP solutions. 

  • Implementation documentation should be more business-oriented

Nothing encourages alignment more than being able to think like your end customer.  Too often we create project documentation that focuses more on technology than business reasoning and justification.  There are times were I am guilty of moving too quickly from what needs to be done to how will it be done without understanding why does it need to be done.  At the end of the day we build software to drive business results.

 Summary

Business to IT alignment is a strategic goal that can only be reached by taking tactical steps to bring Business and IT closer together to generate mutual understanding and trust.  Implementing ERP software is an opportunity to generate greater alignment by developing a common language for effective collaboration.  When alignment is achieved then decision-making is effective resulting in a greater opportunity for success.

From the book “Maximize Your Investment: 10 Key Strategies for Effective Packaged Software Implementations” by Brett Beaubouef.

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