Posts Tagged ‘alignment’

Just What Is This “Alignment” Thing?

Wednesday, March 11th, 2009
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IT Departments To Be Effective Before They Worry About Alignment

Once upon a time the Supreme Court justice Potter Stewart said that pornography is hard to define, but “I know it when I see it.” In the world of IT it would appear as though alignment with the business side of the house is a lot like pornography in this sense – it’s hard to define, but we’re all pretty sure that we’d know it we saw it. A survey that was done by the consulting firm Bain & Co. sure seems to confirm this.

It’s always a good idea to make sure that we’re talking about the same thing before we get into a big flame war. It turns out that the best definition of IT alignment that I’ve come across comes from Brian Watson over at CIO Insight magazine who defines it as “…synching up strategies [between IT and the business units]“.

The kids over at Bain have found that the two sides of the coin, IT and business, all too often misunderstand just what the concept of alignment is. Specifically, what a lot of companies try to do is to dole out IT resources to different business units and then they say “Ta-Da – we’re aligned”. They really should be syncing up their strategies.

Bain believes that making your IT department more effective is the correct first step before you go worrying about alignment. Effectiveness is defined as being excellence in process management and execution. Of course, you need to be able to make these repeatable and consistent. On the other hand, alignment means that IT and the business have a proactive relationship.

I’ve always looked at these two parts of making the business run more smoothly as being joined at the hip. Effectiveness is how things get done every day. Alignment is the direction that you are moving in. Both are needed to have a well run IT department.

Do you feel that your IT department is effective? Do you believe that it is aligned? What steps are you taking to make it more effective? Do you think that you need to bother to align it with the rest of the business?

Is IT Alignment Sooo 2008?

Monday, March 9th, 2009

Is IT Alignment Still A Good Goal For An IT Department To Have?

Is IT Alignment Still A Good Goal For An IT Department To Have?

Is it possible that the holy grail of IT, getting our act together with the rest of the business, is no longer what we should be working on? A survey that was done by the consulting firm Bain & Co. sure seems to be saying this.

Before anyone goes crazy on me, let’s first make sure that we’re all talking about the same thing here. Just what do we mean when we talking about alignment? It turns out that the best definition of IT alignment that I’ve come across comes from Brian Watson over at CIO Insight magazine who defines it as “…synching up strategies [between IT and the business units]“.

Now here’s the trick: there are a bunch of ways to do this. Sometimes the IT organization runs along side of the business units, sometimes the IT organization works within the business units almost like a vital organ.

No matter which approach you take, business line managers and IT managers have to have shared domain knowledge and a common understanding about a specific business process and how IT can help make things better in order to be in alignment.

The damning bit of info that the Bain report revealed was that if your IT department is not effective, then all the alignment in the world isn’t going to help your firm.

The Bain team defined an effective IT department as one that gets projects done on time and on budget. Their study showed that making an IT department effective was MORE important than getting it aligned with the rest of the business if you wanted to boost company growth and control IT spending.

What this means is that too many of us have been trying to walk before we can crawl. Making our IT shops effective is the first step, alignment is the second step. Now there’s a plan that we can live with.

Do you feel that your IT department is effective? Do you believe that it is aligned? What steps are you taking to make it more effective? Do you think that you need to bother to align it with the rest of the business?

Secrets Revealed: How To Get The Most From Your IT $$$

Wednesday, March 4th, 2009

How To Get The Most Out Of Your IT Budget

How To Get The Most Out Of Your IT Budget

Every firm spends loads of money on IT, why do only some (Walmart, FedEx) get a clear advantage from the money that they spend? A team of researchers lead by Dr. Gautam Ray talked with 104 insurance firms in order to get to the bottom of this question.

Here’s what they found: the key to getting the most out of your IT investment is to make sure that you have what they call shared IT-Business understanding. This means that business line managers and IT managers have to have shared domain knowledge and a common understanding about a specific business process and how IT can help make things better.

This shared IT-Business knowledge can’t be bought. It develops over time. Firms that have this knowledge are able to achieve superior customer service performance even though the IT tools that they are using are also available to their competition.

The study also showed that technical IT skills by themselves don’t really provide any distinctive advantage (sorry that you worked so hard to get that certification). Oh, and more IT spending does nothing to boost customer service performance.

In the end it comes down to not how much you spend on IT, but rather how your IT resources are deployed in a manner that best meets your firm’s needs. This is how IT provides a true competitive advantage.

Has your spending on IT been going up? Do you measure the benefit that you get from your IT spending? Do you feel that you have good IT-business knowledge being shared in your firm? If so, how was it developed? Leave me a comment and let me know what you are thinking.

Secrets Revealed: Where Is All Of That IT $$$ Going?

Monday, March 2nd, 2009
Where Is All The Money That We Spend On IT Going?

Where Is All The Money That We Spend On IT Going?

Where’s the money going? Everyone knows that spending on IT departments and projects has been going through the roof for the last 10 years or so. Umm, does anyone know if the company has been getting any benefit from all of this increased spending?

Blame all of this discussion on Nicholas Carr‘s article “IT Doesn’t Matter Any More” in the Harvard Business Review back in 2003 in which he pointed out that IT resources and knowledge have become a commodity so no long term advantage can be provided by them.

Ouch! So how does this all play out? There are three points to consider:

  1. A firm can gain a competitive advantage if it has valuable, rare, and costly to imitate IT resources.
  2. If your IT resources are not all that special, but if you use them to realize the full potential of non-IT valuable, rare, and costly resources then you can have a source of competitive advantage.
  3. In the best case, if you have valuable, rare, and costly to imitate IT resources and you use them to realize the potential of non-IT valuable, rare, and costly resources then you really have source of competitive advantage.

Take that Mr. Carr!

But wait a minute, every firm spends loads of money on IT, why do only some (Walmart, FedEx) get a clear advantage from the money that they spend? A team of researchers lead by Dr. Gautam Ray talked with 104 insurance firms in order to get to the bottom of this question.

But I’m out of space this time, so we’ll have to discover what Dr. Ray’s team found out next time…

Has your spending on IT been going up? Do you measure the benefit that you get from your IT spending? Do you feel that you have good IT-business knowledge being shared in your firm? If so, how was it developed? Leave me a comment and let me know what you are thinking.

How Can You Make Your IT Department Strategic?

Monday, February 16th, 2009
Lockheed Martin's IT Department Had A Problem: They Had No Strategy

Lockheed Martin's IT Department Had A Problem: They Had No Strategy

Isn’t that the goal of every IT department – to move from being viewed as a support organization to somehow becoming part of the company’s strategic core? Although we all know that this is what we want, for some reason it sure seems to be very hard to do. Good news – the folks over at Lockheed Martin have figured out how to do it…

Ed Meehan is the VP of operations at Lockheed Martin’s Enterprise Information Systems (EIS) and back in 2004 he discovered that he had a problem on his hands. In 1995, Lockheed and Martin Marietta had merged and Ed’s IT team had spent the next 10 years consolidating data centers (they actually got to be quite good at it). However, in 2004 they were done and they found themselves adrift – now what should they do?

EIS had neither a strategy nor a focus. Does any of this sound familiar to you? In order to have a strategy, you need to have a goal and since EIS is an internal IT organization they don’t have the normal measures of profit and loss. What’s an IT department to do?

What EIS had to do was identify a goal, create a strategy to reach that goal, and then sell the strategy to a spread out IT department that had never needed to have a strategy. How hard could that be?

Ed was smart enough to know that he needed to have his team pick the direction that they wanted to go in. He showed up at a meeting with three different popular business books that had three different business strategy goals: become a product leader, become the low-cost leader, or provide complete customer satisfaction. Pick one – you can’t do all three. Ed’s team picked providing complete customer satisfaction with the customer being Lockheed Martin’s internal employees.

So now what? Ed set up an 8-person team who had to map out the new strategy and then get the message out to the rest of the department. Their first step was to create a strategy map which showed how each part of the company would be measured against the goal of providing complete customer satisfaction.

Now the 8-person team couldn’t do this alone, so they asked each business unit to design their own strategy map with the thought that once they had this, EIS could then build a master map. You can imagine how well this went over – none of the business departments saw any value in adding strategy to their IT department and so they were, to say the least, reluctant to participate.

The 8-person team didn’t give up and they brought Ed in when needed. In the end, they got what they were looking for – a complete map of what it would take to fully satisfy the rest of the company.

Now came the hard part: selling the concept of thinking about the new strategy to the rest of the IT department. The biggest problem turned out to be the middle managers – they had “This To Shall Pass” syndrome. They figured that they could just wait things out and this “new idea” would go away just like all the other ones before it.

Well, they were wrong. It took a year to get the program off the ground and then it took another year to get the message out and train the staff. However, through relentless communication, they finally did it – everyone bought it.

Lockheed Martin has seen measurable improvements in their operations since this strategy was implemented. Internal customers have rated alignment between divisions as having improved by 160%. Probably the greatest payoff is that at Lockheed Martin, IT is now seen as being strategic.

Is your IT department considered to be a strategic part of your company? Does your IT department have a goal? Do you have a strategy to reach that goal? How are you doing in getting there? Leave me a comment and let me know what you are thinking.