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Originally published at Internet.com I first became involved with trying to "align IT with the business" more than ten years ago. I was working for a CIO at a major national bank and his top priority was illustrating to the CEO and other bank executives, that IT was working on those things the business wanted and that he wasn't squandering any valuable resources.
This was understandable at the time, since the IT budget was approximately $200 million and the bank was going through another cycle of cost cutting. Unfortunately, aligning IT to business wasn't easy. In fact, during the time, I didn't even know exactly what that meant. Did alignment apply only to the projects we were working on or was it something more?
In fact, IT alignment, although it has taken on several different names today, remains on the lips of most IT executives. A simple Google search on "IT Alignment" delivered more than 48 million links.
Today my definition of business/IT alignment is quite straightforward: "Business/IT alignment is the effective and efficient use of IT investments and assets in executing business strategies and achieving business goals."
Achieving the highest level of alignment, requires a trusted relationship between IT and the business, where the function of IT and other business functions adapt their strategies together. Achieving alignment is evolutionary, dynamic and ongoing.
Sustaining business/IT alignment requires strong support from senior management, a thorough understanding of the business and technical environments, transparent decision-making, good working relationships at multiple levels of the organization, strong leadership, appropriate prioritization, and last, but definitely not least, effective communication.
Similar to the confusion of trying to define business/IT alignment is attempting to define the scope of alignment activities.
Many clients initially define the focus of alignment as the project work produced by the IT department. Some of my clients who implement project portfolio management (PPM), define the scope of alignment to include not only the project work, but the resources required by the project work.
(A "how to" approach of making this alignment occur is explained in one of my previous CIO Update articles, Five Steps to Business/IT Project Alignment).
While this is often a very good place to begin your alignment efforts, it is not the complete extent of all areas required for a mature and successful alignment of business and IT. Keep in mind the typical company spends more than 75% of its IT budget on non-discretionary, "run-the-business" activities, such as application support, operations, and help desk activities.
A singular focus on project work limits your alignment activities to only the discretionary investment spending and thus, on less than 25% of all the IT activities occurring.
While PPM enables the alignment of IT projects and new investments with the business goals, it is extending these disciplines across the entire IT portfolio to enable complete business/IT alignment. To clear up any confusion, lets again take a moment to define the complete IT portfolio.
Similar to a personal financial portfolio, the IT portfolio is comprised of two major sections:
* Section one - new investments (these are the discretionary projects that I referred to above.) * Section two - existing assets (these include the sub-portfolios of hardware, software, and data that reside in your company's production IT environment, as well as the governance processes that manage the IT department and human resources.)
(Please refer to my previous CIO Update article, De-Mystifying Portfolio Management for a complete explanation of IT portfolios.)
Now that your concept of the IT portfolio is broadened, you should be asking, "What portfolio disciplines do I need to concentrate on to improve alignment with the business?" Excellent question, even if I say so myself!
While the disciplines required to manage the various sections and sub-portfolios of the overall IT portfolio are similar, it is a specific sub-set of these activities that are continually used to create and sustain alignment with business objectives.
Regardless of which sub-portfolio you are managing, the portfolio of management disciplines that you must leverage for alignment include:
In my next article I will define the specifics of each of the above disciplines and illustrate how it enables business/IT alignment.
Jeff Monteforte is president of Exential, a Cleveland, Ohio-based information strategy consulting firm, which specializes in IT governance, information security and business intelligence solutions. He can be reached at jmonteforte@exentialonline.com.
Author: Jeff Monteforte
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