EVG cafe: Business & IT alignment…a step closer.
Ensink & van Gool organized their first knowledge café event with customers to discuss and explore Business and IT alignment (BITA). The cafes are designed to bring IT professionals together to both share knowledge and experience and create new insights around topics impacting IT organizations. Business & IT alignment was chosen as the first theme because BITA has been a top 3 CIO issue for many years, yet we still struggle to realize alignment! Karel van Gool introduced the session, stressing that in his perception ‘communication skills’ is the most critical BITA capability IT professionals need to develop. Karel showed a dictionary definition of alignment: ‘a state of agreement or cooperation between persons…with a common cause or viewpoint’. It would appear that we struggle with the agreements and don’t always have a common viewpoint.
The theme would be discussed and explored using the Grab@Pizza Business and IT alignment simulation game as an enabler.
Paul Wilkinson from GamingWorks first presented the top findings from ‘Trends in Business & IT 2012/13’ from the Business & IT Trends institute in the Netherlands . The results, based upon findings from 472 organizations, showed the following global top 5 IT Management concerns were:
- Business & IT productivity
- IT and Business alignment
- Business Agility and speed to market
- Business process management and reengineering
- IT reliability, security and efficiency
The top 4 show a clear growing importance of IT to support and enable the business. Number 5 in the top trends shows the strategic importance of ITSM.
The 20 delegates at the café shared their existing business and IT alignment challenges. These were:
- An explosion of new business innovation and applications and a failure to manage end of lifecycle and consolidation of the application landscape.
- Increasing complexity of the infrastructure and the service sourcing model. The need to create more transparency and simplicity.
- The need to balance innovation and growth with operational stability and manageability.
- Contracts and agreements. Contracts can become barriers to flexibility, agility and growth.
- Making agreements when there are conflicting priorities and agendas.
- Aligning end-to-end processes throughout the delivery chain and between business &IT.
- The unclear scope and responsibilities of SLM and BRM.
- Managing expectations on timescales and resource allocation.
- Too much distance and too little understanding of each other’s issues, the need for improved collaboration and communication between Business and IT.
- The gap in attitude, behavior and culture between business and IT. Also the need to create a business focused attitude, behavior and culture within IT. Changing the ‘DNA’ of IT people.
- Distance between the strategy level and the shop floor, the important role that middle managers NEED to play.
In the business simulation game delegates played the Business and IT management team of a fictitious Pizza company called Grab@Pizza. Their task was to turn-around a poor performing organization and exploit emerging technologies to increase revenue, reduce costs and gain new customers. Not only did the team have to innovate and enable business growth using IT, but they also had to manage the stability, availability and continuity of existing IT and services.
Delegates experienced two months of the game. In the first month the CEO was not happy. Neither the business unit managers nor IT had clear governance mechanisms, control over strategy realization or insight into costs and risks. There was a ‘them and us’ feeling, ineffective communication and decision making, poor insight into the business strategy and goals…..’Just like reality!’ said many.
In the game IT Finance controlled the purse strings without understanding the business strategy, and did not help IT make the business case for investments. Finance did not understand the IT requirements in relation to the business strategy or managing business risks. At the end of the round ‘We were well within IT budget!’, business: ‘Why did I lose $4M in profits’?
Between games rounds the team discussed reasons for failure and agreed new behavior, made changes to their processes and aligned their end-to-end decision making. They developed a priority mechanism to ensure effective use of scarce resources. At the end of the second month the CEO was happy and, business results were being achieved. What had changed? What had the team applied in terms of business and IT alignment that had made them successful? What could they take away and apply?
- Communicate, communicate, communicate the business strategy in terms of V,O,C,R (Value, Outcomes, Costs, Risks). All in IT must be aware of and understand this. IT decision making and investments must be aligned to strategic choices. The strategy needs to balance new innovation and growth with managing risks associated with IT, such as stability, availability and continuity.
- SLM has an important role in ensuring the strategy is embedded in the organization through SLA’s aligned to V,O,C,R. SLM has a critical role in translating the needs of both sides.
- A service catalogue needs to be extended to include the service portfolio (planned new business IT functionality and related services) and must cover all process areas (such as business capacity, strategic to operational changes and decision making authorities, as well as support processes), The SLA’s must also ensure business roles, responsibilities are also clearly part of the agreements. E.g decision making authority in change board, input to impact assessments, input to business case).
- IT governance mechanisms are needed to ensure the business is aware of its role and responsibility and mechanisms ensure these are embedded in the organization. These need to include internal business agreements. Aligning strategic IT related decision making to business unit responsibilities and authorities.
- Business must quantify and share requirements and reporting needs with IT. Reporting needs to be defined together. IT reports must be in terms the business understands in relation to V,O,C,R and must facilitate effective decision making, prioritization and resource planning.
- Everybody in IT must understand how IT (and their own role!) contributes to the business strategy. Personal ownership and responsibility for this need to be embedded in the culture. This requires a focused management role in changing IT attitudes, behavior and culture.
- All IT process managers must learn to make business cases for their investments. IT finance department should help IT make business cases.
- Problem management is a crucial role in managing business risks, especially when fast, agile changes are part of the strategy. Problem management needs to have a better understanding of the strategy, V,OC,R and able to make effective business cases.
See global results of Business & IT alignment survey events
At the end of the day delegates gained new insights into measures they could take away and at the same time they had experienced how a business simulation can be used to bring Business & IT together to the same table to confront each other on desirable and undesirable behavior, facilitate dialogue and work towards a better understanding, shared views and agreed improvement actions. Binging Business & IT alignment a step closer to reality. I am sure EVG will be organizing new cafe events to go deeper into the pragmatic and practical solutions to the BITA issues discovered.