Why business leaders must align IT strategy with business strategy
Last updated on January 25th, 2021
IT has become a critical part of almost every department. As a result, businesses have high expectations of their technology investment. New technologies must now reduce costs, increase security, enhance productivity or improve workflows and communications.
But despite the important role IT strategy plays, it often ends up as an afterthought. Bolted on to the business strategy, rather than forming an integral part of it.
This is often because IT is seen as a separate entity. One where technology drives investments, instead of the business’ own aims and objectives.
This divided approach, by both the business as a whole and by IT, is counterproductive. And usually only serves to increase the disconnect between the two.
Why does a disconnect happen?
There are a few ways in which disconnects between IT and the wider business can form. Below are the most common reasons.
- IT departments do not have a clear understanding of what is important to the business
- Leadership don’t understand the value of IT
- Leadership are unwilling to stop using outdated technology
- IT decisions are made separate to business decisions
Find out how QuoStar’s CIO Service can help your business to use IT strategically and achieve stability, security and competitive advantage
What is an IT-business alignment model?
Aligning the IT and business strategies involves more than combining them into a single document. Under this model, every aspect of the IT strategy should support the goals of the business.
This means that every IT-related investment, activity, service or project must create or optimise business value. Additionally, to further improve alignment, IT should be looking to achieve business-related metrics. Not IT related ones.
Alignment is not the sole responsibility of IT though. Leadership teams need to be aware of their IT resources, something often neglected. They must also understand how technology plays a role in their business’ effectiveness. And how it can impact their competitiveness as well as the speed of response to market change.
The key to an aligned IT and business strategy is mutual leadership and accountability. IT must increase accountability for their results, but they must also hold the business accountable for IT.
What are the benefits of aligning your IT strategy with your business strategy?
Utilising an IT-business alignment model can help improve your business’s performance. Leading to more efficient processes, faster response times and more efficient supply chains. This is because all aspects of a business are not only working towards common goals but are aware of what other areas are doing.
- Everyone is working towards a common goal
- IT supports the business strategy, adds value and drives success
- Easier to control and manage risk and compliance issues
- Meets the IT demands consistently and efficiently
- Increases the agility of the business and allows it to react to changes
- Creates greater integrations and collaboration between departments
What are the potential drawbacks?
It’s important to remember that alignment is not a one-off, box-ticking activity. Alignment is something which requires regular reviews, assessments and adjustments.
Even businesses who achieve alignment can experience disconnect over time. As needs and priorities change, other departments will react. They’ll develop their own strategies which work for them. But will have little thought to how they must adjust IT to support these developments.
If this continues, pain-points and organisational friction will arise. But the cause of this is rarely identified. The business strategy has developed, but IT has stagnated.
The leadership team should review the IT strategy alongside business strategy each quarter. This helps determine how technology is helping – or hindering – growth.
This process benefits greatly from an external consultant. For companies without an internal IT team, the consultant provides important technical insight. And where companies do have an internal IT team, the consultant provides a much needed objective point of view.
Although aligning the IT and business strategy takes time and cooperation, it is an exercise worth completing. When IT is working to support business goals it leads to happier, more productive teams, smarter investments and a greater return.
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