“The IT department builds software, runs the systems, and … oh yeah, they provide a help desk so we all have someone to moan to and blame when the systems misbehave.” While that may be what IT often does, it does not really tell us what IT should be doing, nor does it give us any guidance on how IT should go about doing whatever it does. To answer these questions we need to dig a little deeper into the often-mentioned but less-often-implemented concept of business and IT alignment. In short, how do we ensure our IT decisions are truly adding value and are not just interesting and expensive sideshows designed, albeit unintentionally, to exasperate, frustrate and infuriate? How do we make the right strategic choices and truly align IT with the strategic goals of a business?
Maybe the answer is to stop worrying about technology at all and start thinking about how a business-person approaches problems of strategy. In fact, maybe technology bears little thought at all. Are the roots of the issue really even about technology, or are there other factors that bear more thought and have a greater influence on IT’s ability to participate as a valued contributor to a business?
Last month, we looked at good governance as one of the keys to a successful IT shop, but good governance on its own does not ensure success, if what is being governed are the wrong things! So we are back to the central question, which is one of mandate. What should IT be doing?
What kinds of tools does a business use to answer the questions around its strategic choices and can we adapt these to producing an IT strategy? It turns out we can and, in fact, many tools are quite useful in producing an IT strategy even though they have nothing to do with technology (maybe that’s why they are truly useful ... ).
Raiding the manager’s toolbox
One of the tools business strategists have used for the past 18 years is value chain analysis, popularised by Michael Porter in his 1985 book, Competitive Advantage. Value chain models provide a helpful way to organise one’s thinking around primary and supporting functions and the relationships between them. Generic and organisation-specific models of the IT value chain can be useful tools in the development of IT strategies.
The ‘balanced scorecard’ is another tool well known to many organisations. Initially designed as a measurement tool, it has also found favour as a tool for strategy development. Even in organisations that have not adopted a balanced scorecard, designing an IT strategy using balanced scorecard principles and techniques is an invaluable aid in ensuring IT has the necessary strategic linkage to business goals and objectives.
Another approach that can be useful is ‘system dynamics’, a branch of systems thinking. I tend to think of this as a more ‘scientific’ approach to scenario modelling. While it offers technical approaches to modelling decisions, it also provides some simple but powerful techniques to model causes and effects and to test assumptions around scenario planning.
How do these relate to IT strategy? An IT value chain model is useful in determining what tasks IT should be carrying out. A balanced scorecard approach allows us to link (or unlink) elements in the IT value chain to real strategic needs. Simple system dynamics models can be useful to test assumptions and decisions around those linkages and the ways in which we choose to implement and support them.
While these kinds of tools provide a means to ensure your IT strategy is truly aligned to your business, an equally important benefit is that they provide a means to communicate the value of IT to business people on their terms.
If IT truly wants to be a strategic partner, then what better way than to use the same tools, language and techniques as those with which it is trying to partner?
Aaron Kumove is managing director of Horizon Consulting.
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