Five basic steps to please both the board and the users.
One of the things you strive for as an IT director is to run a
department that supports the daily needs of the whole business
while also being in tune with its long-term strategy. The alignment
of IT with business strategy has been a mantra of IT heads for
years but has often proved hard to achieve.
The reason lies in the structure and decision-making processes of
modern companies. Many organisations communicate their strategy
through a variety of media: slide shows, videos and face-to-face
discussions.
Objectives, in particular, are based on divisional silos: sales
directors takes responsibility for their objectives; finance
directors for their objectives, and so on. Directors then split
their objectives to their line managers. These managers do the same
at departmental and team level, so that each has their own set of
objectives. Eventually, these filter down to individuals, defining
their targets, goals and responsibilities.
This poses a problem for IT directors. Staff in different
departments want software and hardware to meet their departmental
requirements, but if the individual systems are not integrated, the
IT department is not supporting the whole business.
Many business departments will have no incentive to change the way
they use technology or the business processes around it if they
feel they are already meeting their departmental targets -
particularly if other departments are not meeting theirs.
IT directors, meanwhile, will be under pressure from the board to
ensure that systems are integrated and common technology is used.
IT directors can minimise this tension by taking five basic steps.
First, they should ensure that there is a common understanding of
the business strategy. What are the individual objectives of the
board? For the sales director this might be increasing sales or
breaking into new markets. An expansion into new markets, for
instance, might require the development of a new customer
relationship management system.
Second, explain strategies and targets in terms of the business
processes used by all departments and the technology needed to
underpin this.
Third, create a shared interpretation of the objectives and
targets. If the sales director wants to expand overseas, the IT
implications of such a move - for instance creating a shared
services centre, or outsourcing systems - need to be discussed.
Changes to a business will have a big impact on the IT
strategy.
Fourth, understand the trade-offs inherent in the strategy and
objectives. If an organisation has multiple objectives - cutting
costs, expanding overseas and improving customer services - certain
targets will have to take priority, creating a series of
trade-offs. IT directors need to be aware of the business
priorities so they can plan their strategy and allocate resources.
Fifth, identify areas of conflict between departmental objectives
and the possibility that technology can harmonise business
processes and departmental squabbles.
Ashley Abraganza is senior lecturer in
information systems at Cranfield School of Management