While nearly all organizations recognize the importance of aligning IT and business strategy, very few believe they are doing it right, according to a recent survey from Deloitte Consulting LLP.
Of the 200 IT executives surveyed by Deloitte Consulting and IDG Research Services, 96% predicted that a "significant" or "moderate" positive bottom-line impact would result from having an IT strategy specifically developed to support the corporate strategy. Yet only 10% rated themselves "extremely successful" in alignment efforts.
Ann Sennleader of CIO services for the United StatesDeloitte Consulting
Why do so few succeed? It's because the majority of CIOs focus on the wrong things, said Ann Senn, Deloitte's leader of CIO services for the United States.
Rather than concentrate on competitor benchmarking, profiling business expectations or producing balanced scorecards, the "successful" CIOs say they focus on developing an IT strategy, deploying that strategy, mapping IT budget and business priorities, and matching those to the business portfolio, Senn said.
"The well-aligned companies were more likely to say IT strategy and alignment was one of their top priorities," Senn said. "What's interesting now is, we have better tools and techniques from an IT management standpoint to measure IT's value to business. The best companies have stopped measuring IT alone. They measure the result of business initiatives overall and they understand that IT is a big player in that initiative."
Just as important, the report found that successful alignment depends on executive agreement about the role and priorities of IT. It also depends upon the ability of executives to communicate expectations.
Unclear definition of IT's role in an organization, lack of detail in top management's plans and shifting timelines all help to prevent alignment, Senn said. Additionally, technology infrastructures often outlast the business strategies they were intended to support, which ultimately limits flexibility.
"Mapping IT spending with business priorities is a best practice," Senn said. "What people have learned is how to evaluate spending on technology within the context of what they are achieving in business processes and results. You could spend X dollars for that phone, but unless that phone is helping you do your business more productively with its features and functions, it's just a cost for you."