Success Factors for Business & IT Alignment
These are 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.
Grab@Pizza – Key learning points in relation to practical issues
- 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.
- Authority levels must be clearly defined and understood relating to investments, resources allocation, planning, prioritization, decision making. Assumicide is killing the business.
- 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.
- The business needs to involve IT early in strategic planning if they want to exploit emerging technologies.
- 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.
- 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.
- The business must help IT understand their processes, cycle times, criticality, priority, impact to help IT prioritize resources.
- 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.
Business Information and metrics
- 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.
- 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.
- Business needs to understand which changes relate to their business portfolio of changes and strategic initiatives.
- IT must ensure it understands the business strategy and planning. The business must also be proactive in sharing this. Not knowing this causes risks and knee jerk responses that may be too late or poorly executed. IT needs to know 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.
- 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.
- IT must break out of their internal focus. IT employees need to actively engage with the business to understand how services are used.
- IT must understand business impact and priority at ALL levels (Strategy and portfolio planning, changes, operational support work).
- 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.
- 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 must implement effective, reliable IT Metrics and information in order to communicate with the Business and support business decision making.
IT Financial Management
- IT Financial Management must translate the budget into ongoing support, adopting and deploying emerging technologies and changing IT capabilities to meet changing business demands.
- 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 accross support and innovation.
- 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.
- 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.
Service Level Management
- Service level management 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.
- Service level management must ensure reports can demonstrate the value of the IT department/IT service, not just IT related metrics.
- Service level management must ensure operational processes are involved in SLA agreements and can deliver on agreements.
IT Emerging technologies
- IT does not translate emerging technology into business solutions or adequately communicate the risks associated with aging technology. It is often involved too late in strategic planning to propose new technology or solutions.
- Not understanding supplier technology strategies means support on old technology can be removed. This confronts the business with additional costs, delays and outages that could have been foreseen and planned.
- When emerging technology is chosen to support business goals IT cannot accommodate this as the change calendar and resources are full with ‘important’ changes related to maintenance and support.
- 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.
- Capacity monitoring must be discussed in relation to incident and problem management processes, helping prevent and minimize capacity related issues.
- 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.
- The business needs to be involved in setting and agreeing the priorities of the change portfolio.
- 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 then additional budget and training is required to accommodate the growth in calls, incidents and outages to minimize business disruption and impact downstream.
- The Change Calendar is a crucial instrument to oversee and plan all changes.
- The Change Calendar shows the IT Strategy Plan. This plan is a translation of the Business Strategy Plan to IT. It shows how the business strategy will be realized and helps business decision making.
- Problem management must learn to make business cases relating to Value, Outcomes, Costs and Risks to give priority to RFC’s from Problem management.
- IT needs to demonstrate the benefits of investing in Problem management to reduce the number of Incidents and reduce the IT Support costs.
- The need for effective management and control of incidents to enable trend analysis of incidents and business impact.
- 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.
- Investing in a skilled Service desk reduces the costs of Incident management and makes more budget and resources available for additional high value tasks and projects.
- Investment in a Knowledge Base helps reduce IM costs in the long term, but must be incorporated into good problem management process and responsibilities.
- Reporting how Known Errors helped solve high impact business incidents quicker (reducing risks), and improve business process availability (and business productivity) helped convince the business to invest in support processes and technology.
- Conscious investment in Service Desk capabilities helps increase the number of incidents directly solved, this minimizes Business impact and enables IT operations to invest in other areas.
- 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.
- IT needs to know the impact on business value, outcomes when infrastructure, components or services are unavailable, linked to business cycle times.
- 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).