Improving Business and IT alignment capabilities
In 2013 Business and IT alignment will STILL be a hot issue and will remain so. Nothing new there then!
We have struggled for more than a decade to align Business and IT, there are no signals that it will suddenly magically disappear and there are few clear signals to show that we, as an industry, are effectively addressing the issue. This article will give you some critical success factors for making alignment successful.
We must bring alignment to a more mature level.
Experts are now talking about Business and IT Integration or Fusion. Experts are always coming up with trendy new buzzwords and models. It is as if by giving it a new name we can sweep the old one under the carpet and blame our lack of alignment on the old outdated terminology…..or framework. Whatever you want to call it, with the increasing demand for IT and the increasing impact and importance of IT for organizations we must bring alignment to a more mature level. Writing this is like living the film Groundhog day. Every day you wake up and face the same situation again and again…..only with business and IT alignment it seems to be a perennial experience.
Every year we say Business & IT alignment is important and every year it comes back and bites us.
The fact that business and IT alignment is STILL an issue implies that existing frameworks, training & certification, and consulting approaches have, on the whole, failed to achieve the hoped for results…..namely alignment? Is it simply an impossible goal? one that is ever changing, and can never be realized? Or is it because of the way we try to tackle the problem? In our view it is the way in which we approach and tackle the problem, as well as the level of maturity of IT and the business within an organization.
We still firmly believe that Attitude, Behavior and Culture (ABC) is the key barrier or enabler.
We have conducted a series of business simulation games (Grab@Pizza) around the world to bring Business & IT people to the table to discuss and explore Business and IT alignment fail factors. More importantly to discuss and explore success factors and concrete improvement actions to improve the maturity of their alignment. Bringing people together to help change attitudes and recognize a need to change behavior.
In the business simulation sessions we also made use of the maturity model and assessment of Jerry Luftman, to help teams explore issues and define improvements. During the business simulation sessions so far experts and practitioners alike have been confronted with a simulated business and IT environment and are asked to demonstrate their ability to deploy and manage IT as a strategic business enabler.
This document contains the key success factors taken from the hundreds of IT and Business managers who have taken part in the Grab@Pizza ‘Business & IT Alignment case experience’ simulation. These are the actions that delegates say they must ‘take away and apply’ or ‘improve’ in their own organizations.
The majority of them recognized the fail factors they experienced in the simulated environment as being the current state of business and IT alignment in their organizations.
Grab@Pizza – Key learning points in relation to practical issues
These have been clustered in line with the 6 areas of Jerry Luftmans alignment model. The table below describes Jerry Luftmans model.
- Business management must share the business strategic goals and priorities with IT to avoid incorrect investment decisions, resource allocation and risks to business goal achievement. Very often this is not done, done too late or is ineffective.
- IT must use the the Business Strategy and Business Planning in order to effectively plan IT activities, investments and resource capacity. Support processes must also be aligned with strategy planning. What is coming in the pipeline and how will this impact the workload in operations and the service desk for example. Often people in IT are unaware.
- Business units must understand the strategic priorities and align their demands for IT resources accordingly. One of the top ABC (Attitude, Behavior, Culture) worst practice cards chosen globally in surveys is ‘Everything has the highest priority according to the users’.
- IT must make the business aware of the impact of demanding everything as high priority, also the impact of poor business involvement in requirements specification and testing. Often IT has trouble communicating this to the business. The business often does not take its responsibility for understanding this.
- IT must break out of their ‘internal focus’. IT employees need to actively engage with the business to understand how services are used. This is continually a Top scoring ABC worst practice card from our global surveys. The simulation experience was an effective way of bringing Business and IT people together and helping IT break out of this internal focus.
- IT must have the right metrics and information to communicate with the business and must not be too IT-centric. IT must create a more customer and business focused culture. Many IT organizations are struggling to make this culture change.
Competency and Value management
- Business managers are not interested in the IT metrics of ‘incidents solved’; ‘system capacity and growth’; ‘incidents per employee solved’. Business managers need to know if the capacity will support projected business processing growth, that negative business impact is minimized as a result of unsolved outages, that business value and outcomes have been realized, that operating costs have been reduced.
- IT must implement effective, reliable IT Metrics and information in order to communicate with the Business and support business decision making. IT metrics must first enable IT to control their internal capabilities.
- The business must make it clear what metrics they need to be able to effectively steer IT so that value is realized and risks are well managed. Often the business does not know themselves what they should be asking for metrics.
- The business needs to understand the downstream support impact, costs and investments resulting from a strategy of agile, rapid deployment and reduced testing and documentation. Problem management and incident management capabilities become critical and must be invested in.
Service Level Management
- SLM must explore and understand business needs and business demands and not just manage agreements and service levels.
- SLM must facilitate an effective understanding of service requirements to prevent IT from adhoc, firefighting and continually reallocating resources and priorities.
- SLM must ensure both IT and business information needs are understood so that services can be provisioned and managed to meet business needs and enable effective decision making.
- SLM must ensure reports can demonstrate the value of the IT department/IT service, not just IT related metrics.
- SLM must ensure operational processes are involved in SLA agreements and can deliver on agreements.
- Organizations must clarify and understand the roles and responsibilities for BRM and SLM.
- The need for an effective Incident Management dashboard in order to monitor numbers, trends and data in order to become more predictable and in control. This data helps IT make decisions on: number of IT staff or Service Desk staff. The data also supports Problem Management and Change Management decision making.
- There must be formalized Governance mechanisms for IT investment priorities, managing IT related risks, and developing IT capabilities to prevent unacceptable delays, costs and lost business opportunities. Two of the top scoring ABC of ICT assessment cards globally chosen are ‘Everything has the highest priority according to the business’, and ‘Demand and Give, the business demands and IT gives in’.
- Authority levels must be clearly defined and understood relating to investments, resources allocation, planning, prioritization, decision making. Assumicide is killing the business.
- Accountabilities must be clearly defined, agreed, understood and executed.
- Business and IT must work closer together to prioritize the portfolio of changes. Changes need to be classified as changes that create value and outcomes for the business or changes focused on lowering costs and reducing risks. IT must make the business aware of IT changes that need to be made to reduce costs and risks, or IT changes that must be carried out if the business is to achieve the desired Value and outcomes.
- IT must understand business impact and priority at ALL levels (Strategy and portfolio planning, changes, operational support work). Too often IT people at operational levels do not understand this in relation to their work.
- The business must help IT understand the business processes, business cycles, business impact, business priorities.
- IT always has a conflict on resources to both manage & support IT and to innovate and on-board new solutions. Insight is required to make this visible and priority mechanisms agreed with the business to allocate resources and accept risks.
IT Financial management
- Without effective management insight into all IT related costs, IT is unable to quantify how much money is needed and why, and is unable to balance costs across support and innovation.
- IT Financial Management must translate the budget into ongoing support; adopting and deploying emerging technologies; and changing IT capabilities to meet changing business demands.
- If IT doesn’t effectively manage and monitor its budget and spending they are suddenly faced with lack of budget and a need to ask the CEO to ask for more money. IT financial management processes must be aligned with Tactical and Operational processes.
- All IT processes must understand their impact on IT costs and how the process can help reduce and manage costs.
- IT must make a business case to justify its investments when there is too much demand and supply is unable to accommodate all business needs. Investments must be justified in terms of Value, Outcomes, Costs, Risks.
- The Change Calendar is a crucial instrument to oversee and plan all changes and can help give strategic insight into changes related to a service portfolio or strategic business initiatives.
- The Change Calendar should show the realization of the IT Strategy/Plan and its relation to the Business Strategy Plan. Showing how the business strategy will be realized and helping the business decision making.
- The business needs to understand which changes relate to their business portfolio of changes and strategic initiatives and needs to be involved in setting and agreeing the priorities of the change portfolio.
- The change advisory board needs to understand V,O,C,R and involve business decision makers.
- Problem management is an important instrument in helping reduce business risks and costs.
- IT needs to demonstrate the benefits of investing in Problem management to reduce the impact of Incidents and reduce the IT Support costs.
- Problem management must learn to make business cases relating to Value, Outcomes, Costs and Risks to give priority to RFC’s from Problem management.
- Reporting how Known Errors help solve high impact business incidents quicker (reducing risks), and improve business process availability (and business productivity) helps convince the business to invest in support processes and technology.
- The need for effective management and control of incidents to enable trend analysis of incidents and business impact.
- The business must help IT understand their processes, cycle times, criticality, priority, impact to help IT prioritize resources.
- Top scoring ABC worst practice cards reveal ‘Them and US culture’, ‘Neither partner makes and effort to understand the other’, ‘Not my responsibility’.
- To gain a partner position IT MUST demonstrate its credibility in managing values, outcomes, costs and risks. To do this they MUST break out of their internal focus, they MUST start communicating and reporting in business terms. They must be seen as being credible, they must demonstrate a more Customer and business focused culture and behavior.
- IT must understand of the relationship between the infrastructure and the business processes. IT must be aware of the business impact when certain components are not available. This will relate to business planning cycles and business workload demands (e;g critical sales period, end of moth processing demands). If IT see’s risks or threats these must be communicated to the business and business cases made for investing in initiatives to reduce or remove the risks.
- The business needs to involve IT early in strategic planning if they want to exploit emerging technologies. IT must be notified and involved in a timely way to support business goals. Otherwise IT may not be able to accommodate these new demands as the change calendar and resource allocation may already be allocated with ‘important’ changes related to maintenance and support.
- IT must translate emerging technology into business solutions (with a business case related to Value, Outcomes, Costs, Risks) or adequately communicate the risks associated with aging technology. It is often involved too late in strategic planning to propose new technology or solutions.
- The need to understand supplier technology strategies means support on old technology can be removed in a timely way. This prevents confronting the business with sudden additional costs, delays and outages that could have been foreseen and planned.
- Lack of effective preparation, testing, documentation and training creates the risk for additional outages and downtime. This causes wasted time, effort, energy and costs and can mean business value and outcomes are not achieved. The business must also be aware of and agree to this.
- If a conscious decision is made to reduce time and effort in designing, documenting and testing (Agile type approaches) then additional budget and training is required to accommodate the growth in calls, incidents and outages to minimize business disruption and impact downstream.
- An Agile approach means that the IT operational processes must be well aligned – Change-Problem-Incidents-IT ops.
- The change process must cater for a portfolio of changes coming from: Problem Management (removing known errors and preparing changes), Business Demand (Requirement from the Business translated to new hardware or software), Capacity Management (Monitoring the capacity and utilization of the IS and preparing RFC’s to upgrade) and Supplier (new releases of Software and Hardware), and ensure these are adequately prioritized and resourced.
- Monitoring the capacity and availability of the infrastructure components in relation to business impact enables IT to be more proactive towards the business and justify the business case for upgrades in terms of risk to outcomes and value and wasted costs.
- Understanding the Service requirements for new business demands helps IT predict the expected and required capacity of the systems and proactively upgrade in line with business planning and objectives. Too often capacity management is a reactive process.
- Capacity monitoring must be discussed in relation to incident and problem management processes, helping prevent and minimize capacity related issues and waste time and effort of these processes independently working on the same issues.
- IT needs to know the impact on business value, outcomes when infrastructure, components or services are unavailable, linked to business cycle times. Too often IT people have no insight.
- IT needs to know the impact of new business demands and how these will influence operations. Throughput, workload demands, priority, impact, support needs.
- IT needs to have effective capacity and availability monitoring and overview to make the right investment decisions and to effectively manage business risks.
- IT operations need to align with Problem Management and Change Management to make sure that the upgrades are planned in the right month to guarantee the customer they can realize their value and outcomes (e.g make money, increase productivity).
- All IT employees need to learn to be more business focused and less technology and process focused.
- Changing from a technology/process centric IT organization to a Customer and business focused organization is a major transformation for many organizations. Organizational change management capabilities are a critical capability for enabling this. Too few organizations have this capability or effectively include it in their programs.
- People need to be involved and engaged in designing and deploying their own processes to help create buy-in and overcome resistance.
- CSI is a CORE capability for IT organizations to continually align with changing business demands and to continually improve IT capabilities. Process implementation initiatives need to be embedded in the line as soon as possible, not seen as an ongoing project responsibility that is handed over when the project finishes.
- The business must ensure adequate business resources are allocated to help specify requirements, be involved in testing to ensure solutions are fit for purpose and fit for use.
- Conscious investment in Service Desk capabilities helps increase the number of incidents directly solved, this minimizes Business impact, reduces the costs of Incident management and makes more budget and resources available for additional high value tasks and projects.
- Investing in skilled Service Desk instead of simply more Service Desk employees enables IT to reduce employees on Incident Management and allocate these more for problem management activities such as trend analysis, problem resolution, effective Known error technology.
- Investment in a Knowledge Base helps reduce IM costs in the long term, but must be incorporated into good problem management process and responsibilities.
Luftman also incorporates a maturity model in his framework. The maturity levels are:
- Level 1: Without process(no alignment)
- Level 2: Beginning process
- Level 3: Establish process
- Level 4: Improved process
- Level 5: Optimal process(complete alignment)
Based upon this maturity, if we examine the captured improvement suggestions people want to take away it reveals the following current levels of industry maturity. This clearly shows a long way to go before business and IT integration.
|Competency and value management||Level 2|
|Governance||Level 2 – Level 3|
|Technology||Level 2 – Level 2|
|Human resources||Level 1 – Level 2|