IT/business alignment is an objective that eludes many IT leaders. It is a topic that receives a lot of attention from IT management, academics, consultants, and journalists. A Google search will surface more than 12 million results. CIO Magazine's "2007 STATE of the CIO" survey revealed that alignment remains the most common top-five priority of IT leaders.

IT/Business Alignment Series This note is the second in a series that explores business and IT alignment. For the first in this series, refer to the Info-Tech Advisor research note, "The Goal of IT/Business Alignment: Why So Elusive?"

The Five Dimensions of IT/Business Alignment

One of the reasons that IT/business alignment remains so elusive is its complexity. Alignment cannot be achieved with a single approach, process, or technique. There are many factors that need to be taken into account, from process discipline and metrics to relationship and communication style.

Info-Tech's point of view is that IT/business alignment is really comprised of five dimensions:

1. Personality Alignment
2. Organization Alignment
3. Strategic Alignment
4. Tactical Alignment
5. Financial Alignment

 

 

Example: Hypothetical Energy Company

General Structure: Three power divisions: generation, distribution, and retail One trading division: buying energy to anticipate shortages, selling during times of surplus Company Personality: Power divisions: regulated public utility heritage, investment focus on developing and maintaining capital assets, operations focus on best service at lowest cost following well-defined, stable processes Trading division: trading floor heritage, fast-paced with split-second decisions involving up-to-the-moment market information and very large financial transactions, energy trader is king where no expense is spared IT Situation: Long history of supporting regulated divisions To improve service level consistency and cost efficiency, launched a transformation initiative to consolidate data centers and support staff into a shared service center Personality Alignment: IT's transformation initiative consistent with values of the power divisions; received support and commitment Trading division rebelled against the initiative citing: value of trading deals far outweighed potential cost savings, trader effectiveness risk far exceeded IT's objectives to standardize service levels and reduce cost, IT's attention to saving pennies contradicted the trading division's spare-no-expense philosophy End Result: IT gained economies of scale by establishing a shared service unit to support the power divisions IT preserved its dedicated service organization only for the Trading division to meet its unique needs for high levels of service

This note suggests how to assess personality alignment and take actions to better align IT with the business.

Personality Alignment

People are characterized based on their personality. Some are bossy, others collaborative; some distant, others caring; some serious, and others carefree. Companies also exhibit behaviors that reflect traditions, values, and norms. When the IT organization promotes values and behaviors that are inconsistent with those of the business, the relationship between business and IT becomes counterproductive. Understanding the company personality is the first step in detecting potential sources of alignment irritation.

IT's Personality Alignment Dilemma

At the risk of over-generalizing, the behavior and style of the IT organization is often directly opposite that of business management. Consider how IT professionals are typically described:

• Methodical
• Analytical
• Logical
• Thorough

These characteristics are an outcome of how IT professionals are trained and rewarded. Ultimately, the IT organization is aptly suited to the objective of the sustained stability of the company's operations: IT professionals protect the systems that the company relies on to conduct business while introducing periodic changes into a highly complex technical environment.

On the other hand, consider how customer-facing business professionals are described:

• Innovative
• Responsive
• Iterative
• Flexible

The business professional focuses on growing and improving company performance to improve products, services, and operations that drive increased sales revenues and reduced operating costs. 

This dichotomy is at the core of IT's personality alignment dilemma. The business will ask for a new capability as quickly as possible. The request may or may not be among previously approved priorities. IT will respond with a cost estimate and timeline that exceeds initial business expectations. The business may accuse IT of not understanding competitive opportunities and being process-bound and overly careful. IT may accuse the business of not understanding the complexities and risks of rushing new functionality. For more information on negotiating this stand-off, refer to the McLean Report research note, "How to Gain and Leverage Political Savvy."

Resolving the dilemma does not mean that IT should abandon the traits that serve to protect company assets and performance, thereby mimicking business personality. Rather, IT first needs to understand personality differences and then adjust behaviors to more closely resemble those of the business while explaining to the business why IT's behavior is constrained by the need to sustain company operations undergoing change.

Assessing Personality Alignment

In the McLean Report research note, "Give IT and Business an Attitude Alignment," Info-Tech introduced seven attributes of corporate personality:

• Centralized: Source of decisions and standards is from the corporate core or business units and departments
• Process-driven: Extent of process rigor and discipline in daily practices
• Investment-oriented: Willingness of company to invest in new and improved capabilities for benefits at a future point in time
• Risk-tolerant: Degree to which the enterprise takes risk
• Controlling: Level of approvals and reviews established to regulate decisions and actions
• Measuring: Scope of company's efforts to quantify success of operations
• Performance-focused: Scale of communicating accomplishments, initiatives, and issues

An enterprise can be said to have a strong orientation to a given attribute when it exemplifies the characteristics of that attribute. For example, a professional services firm where the managing partner makes all key decisions and sets standards for practice behavior has a strong centralized orientation. On the other hand, a fresh-food distribution company, organized into divisions by type of produce, may delegate decision and deal-making to each division leader resulting in a decentralized authority, a reverse orientation.

One orientation is not better than another. The key issue is how similar the IT organization is to the enterprise for each attribute. To compare the company's IT personality against its business personality, use the McLean Report "Assessing Personality Alignment" tool.

Engage business stakeholders to verify differences in personality and determine which IT initiatives have merit for the entire company and deserve business support.

Tackling Personality Misalignment

The IT leader must take decisive steps to address suspected personality misalignment. First, engage business leaders in the issue. Discuss whether IT's behaviors or initiatives have merit for adoption across the enterprise. When business leaders are not willing or ready to adjust their behaviors or values, consult the recommendations in the following table to close the personality alignment gap.

Attribute	When the business has Stronger Orientation than IT, the IT leader should…	When the business exhibits a more Reverse Orientation than IT, the IT leader should…
Centralize	Establish enterprise-wide standards for processes, technologies, and technology use Define IT decision rights that flow outward from the corporate office	Take a "portfolio" approach to process and technology standards where a set of standards apply to a given department or business unit Delegate IT decision rights to IT managers who work with business decision makers Refer to the McLean Report research note, "Development Processes Must Adapt in Decentralized Enterprises"
Process-driven	Define clear IT processes, with process owners, particularly for business-facing interactions Assess process adherence and encourage compliance through performance appraisals Establish a continuous improvement program for IT process effectiveness Refer to the McLean Report research note, "Successful Change is Managed Change"	Avoid insisting on business compliance to IT processes Be flexible in working with business leaders; adapt to their style Apply appropriate process rigor to IT's own operations to sustain quality Refer to the McLean Report In-Depth report, "Adapting ITIL to Small- and Mid-Sized Enterprises" and the research note, "A Recipe for Software Quality"
Investment-oriented	Be proactive in bringing ideas and research to business leaders Collaborate with business leaders in developing new or improved products, services, and capabilities Participate in developing business cases and prioritizing investments Refer to the McLean Report In-Depth report, "A 10-Step Method for Managing Opportunity" and the research notes, "What Innovators Do - Part 1: The Innovation Imperative" and "What Innovators Do - Part 2: Spending by Industry Segment"	Focus on opportunities to reduce costs, business and IT Launch small, incremental improvement initiatives that generate savings within the fiscal quarter or fiscal year Refer to the McLean Report research note, "Are You an Innovator, Housekeeper, or Survivor?"
Risk-tolerant	Avoid over-engineering for the sake of speed-to-market Clarify and define "acceptable risk" with business leaders Deliver smaller, more frequent releases to meet expectations for responsiveness	Clearly identify risks and define stakes Develop risk mitigation programs Establish thorough contingency and security plans Include risk factors in initiative prioritization Refer to the McLean Report In-Depth report, "Mastering Enterprise Change Management" and the research notes, "Enterprise Risk Management Helps Avoid Non-Compliance Fines" and "Understanding Risk Improves Management Decisions"
Controlling	Establish and communicate IT controls and approvals Enforce IT standards, policies, and procedures Report non-compliance	Identify and obtain executive support for some few non-negotiable decision rights and approvals (e.g., regulatory compliance, security, asset protection, resource allocation, and prioritization) Track costs of business non-compliance
Measuring	Define an IT balanced scorecard that can be linked to  enterprise metrics Develop business-oriented service level agreements and metrics to track performance Cascade metrics to IT management team Refer to the McLean Report In-Depth report, "Designing an IT Metrics Program" and the research note, "Use the Right Metrics When Building an IT Performance Scorecard"	Measure a few vital, highly visible services anyway Define a "light" IT balanced scorecard, even if for IT's use only
Performance-focused	Develop a performance communications plan Define standard reporting format and routine Compare key metrics to peer benchmarks and develop improvement initiatives accordingly Refer to the McLean Report research note, "Annual Report Showcases IT Value"	Communicate anyway, even if no-one seems to care (see first column) Communicate informally, socially, visiting peer colleagues frequently

Key Takeaways

1. Personality is an important dimension of IT/business alignment. While less tangible in its nature, personality alignment sets the tone for the relationship between business management and the IT organization. Differences in personality can cause irritation in the relationship leading to conflict and misunderstanding, and ultimately reduce the effectiveness of IT.
2. Personality alignment is an ongoing dilemma. Ultimately, IT must sustain stable operations of the company's technology capabilities. As a result, IT will never be as responsive as some business leaders would like. Tune behaviors and initiatives to business style without compromising IT's ultimate responsibility. At every opportunity, communicate IT's role in sustaining company operations when pressed to behave more aggressively.
3. Choose battles carefully. When an IT initiative to improve efficiency or effectiveness rubs against the grain of the business personality, consider carefully whether the initiative is worth the trouble. Engage business leaders to understand how and why the initiative conflicts with business norms. Assess the merits of the initiative and determine whether business leaders see value in it. If they do not, stop pushing. It may be time for the IT organization to adapt to the personality of the business.

Look for other notes in this series to diagnose and resolve common issues in each of the alignment dimensions: Overview, Organization, Strategy, Tactical, and Financial.

Bottom Line

Achieving and sustaining IT/business alignment can be elusive. The personality dimension of alignment is often overlooked by IT leaders because it is intangible and difficult to describe. Yet a personality mismatch will cause friction in the business and IT relationship and inhibit the IT organization's ability to work effectively. IT leaders should pay attention to personality to establish the right chemistry with the business.  

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