Best of both worlds: Successful business-IT alignment in practice

Best of both worlds: Successful business-IT alignment in practice

Information technology can only bring optimal benefits if it is properly integrated with the business activities of the departments. It is important to implement the right IT projects or to make IT investments that offer the organization or the company added value.

In practice, however, the coordination between business and IT often proves to be difficult. Communication, exchange and division of labor are often in trouble. The organization is usually not agile enough to drive necessary innovations fast enough to increase productivity and competitiveness. The return on investment (ROI) of IT investments is often low. Here we provide you with optimization approaches from practice so that you can avoid this situation.

All theory is gray

Research has been dealing with the topic of business-IT alignment for several decades and has published numerous articles and study results. However, the frameworks and scientific publications do not adequately explain how the theoretical proposals are to be implemented in practice. Probably the most important framework in this context is COBIT. It closely links IT governance with business-IT alignment and what is known as strategic alignment, ie ensuring that company and IT goals are linked and concentrating on the value contribution of IT (see COBIT 4).

Studies have shown that top performers in IT Governance, Business-IT Alignments or Strategic Alignments have a 40% higher ROI on IT investments than their competitors. According to MIT, these measures include aligning IT to support business strategy or measuring and controlling the level of IT spending and the value that IT generates.

What is important in practice

In our projects over the years we have identified a number of success factors for a good business-IT alignment in practice:

    • Cooperation and communication across all areas of the company must be fruitful, trusting and mutually respectful. Specifically, this means e.g. B. Cooperation in interdisciplinary teams and in any case a merging of business and IT.
    • IT must be integrated into the value creation of the company/organization and IT must deliver a measurable value contribution.
    • The IT is aligned to the requirements of the business model.
    • The business model is geared towards IT innovations: IT and business jointly use innovative technologies and data for new business models, smart services and the optimization and automation of business processes.
    • IT understands the business model.
    • The departments understand IT.
    • Business and IT are closely interlinked, also organizationally (e.g. process owner or key user in the departments).
    • IT is not only a supporter, but also an enabler of business (implementation of new processes, products/services, business models with the help of innovative IT).
    • Enterprise architecture management is pragmatic and agile.

As part of our projects, we analyze and optimize the following domains to improve business-IT alignment:

Culture, cooperation, communication

As a basis for all optimization measures, open communication and close, collegial cooperation across all areas is sought.

Alignment and Alignment

On the one hand, alignment and coordination must take place at the strategic level (strategic alignment), ie a targeted IT strategy must be formulated and implemented that is based on the strategic goals of the organization/company. On the other hand, there must be good coordination in day-to-day business and in projects between the specialist departments and the IT department. Here, the IT must be aligned with the (reasonable) requirements of the departments, e.g. B. in IT projects and IT services. It must also be ensured that the departments understand IT and vice versa. Corresponding processes, e.g. B. IT demand management, roles and responsibilities are to be defined.

investments in IT

The profitability and benefits of an IT investment must be analyzed before an investment is made or an IT project is carried out. The success of the projects must be measured. Corresponding processes (e.g. IT budget planning, IT project portfolio management), roles and responsibilities must be defined.

IT governance

Target-oriented decision-making in IT must be established. For this purpose, roles, committees and decision-making processes that are integrated into processes such as e.g. B. IT budget planning are to be established.

Agility, new technologies, data

Strategic and operational agility and digitization must be anchored and implemented in the organization, processes and IT architecture. Change must be planned and supported, e.g. B. Support from a change team.

Concrete measures for a good business-IT alignment

    • Cultural change: Company-wide measures to promote collegial and efficient cooperation across all areas of the company (example, coaching)
    • Working in interdisciplinary teams
    • Carrying out cross-training (training for IT employees on business issues and for departmental employees on IT issues)
    • Creating opportunities for informal exchange between employees
    • Development of an IT strategy that is closely aligned with the business and corporate strategy; the business must be involved in the development of the IT strategy
    • Expansion of demand management so that the value-adding requirements of the business are understood and implemented (processes, roles such as process owner or business analyst, responsibilities)
    • Increase the agility of the departments and IT departments so that new business models and service ideas based on data and new technology can be implemented quickly and effectively
    • Delivering the right IT services (IT service catalogue), actively controlling the project portfolio and IT service portfolio, controlling / approving IT investments, carrying out economic feasibility studies (TCO, ROI, capital value, qualitative advantages).
    • Introduction/optimization of an IT performance management process (e.g. defining and measuring KPIs)
    • Establishment of decision-making processes and committees, e.g. B. IT strategy committee, IT control committee (evaluation of IT investments, prioritization), architecture committee, project steering committees, etc. establish for decisions about IT / digitization
    • Use of enterprise architecture tools to show the connections between business and IT (e.g. connections between business processes, organizational units and application systems)
    • The enterprise architecture management as an entity that ensures orderly changes in the IT development is pragmatic and agile to enable rapid changes
    • Ensuring transparency and communication across all areas of the company in order to be able to properly control changes in IT development (processes, committees, tools, systematic knowledge transfer)

Business-IT alignment includes the planning and ongoing coordination of the relevant measures.

Conclusion

Good business-IT alignment, ie effective coordination between business and IT, has been proven to increase the success of IT projects or the ROI of IT investments. The literature, e.g. B. the COBIT framework, does not describe how exactly good business-IT alignment can be achieved in practice. I have previously described numerous specific measures to optimize business-IT alignment that have proven successful in practice. A good dose of pragmatism, thinking ahead, commitment, collegial cooperation and the exchange of knowledge across all areas of the company also ensure success.

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