Avoiding The Alignment Trap In Information Technology
Avoiding the Alignment
Trap in Information
Technology
1
About the Case
• Article in “MIT Sloan Management Review”
• Article is prepared based on survey of more than 500 senior
•
•
business & technology executives and in-depth interview of
30 CIOs.
The principle findings of the study is that even at companies that were focused on alignment, business performance dependent on IT sometimes went sideways, or even declined.
Article talks about two primary factors for success in IT:
•
•
Alignment between business goals and IT goals
Effectiveness & Efficiency of the IT department in delivering services on time and within budget
2
Inadequacy of IT-Business Alignment
•IT-Business alignment can be defined as the art and science
of formulating, integrating, and implementing decisions between the business and IT, which enables an organization to achieve its objectives
•In response to Business objectives, IT-Business alignment has been traditionally viewed as an essential function of business , and as a necessary aspect of enabling sustained competitive advantage through coordinated planning between the business and IT.
•This is true to a large extent as IT-Business alignment continues to be one of the biggest concerns of management.
•Studies have shown that IT-Business alignment is inadequate because the business climate is in a state of dynamic change and innovation. In addition, studies have further shown that alignment attained is very temporal in
3
nature, and that it falters over time.
Inadequacy of IT-Business Alignment
(Contd..)
• Misalignment
•
A narrow focus on alignment of divisions with its needs instead of business as a whole
•
Misalignment resulting from restructuring activities like M&A, etc
•
•
Different divisions driving independent initiatives
• Complexity of the system, applications and infrastructure
Divisions addressing their individual competitive needs
4
Alignment Trap
• IT Effectiveness (e.g.
•
increased IT flexibility)
provides
Trap in Information
Technology
1
About the Case
• Article in “MIT Sloan Management Review”
• Article is prepared based on survey of more than 500 senior
•
•
business & technology executives and in-depth interview of
30 CIOs.
The principle findings of the study is that even at companies that were focused on alignment, business performance dependent on IT sometimes went sideways, or even declined.
Article talks about two primary factors for success in IT:
•
•
Alignment between business goals and IT goals
Effectiveness & Efficiency of the IT department in delivering services on time and within budget
2
Inadequacy of IT-Business Alignment
•IT-Business alignment can be defined as the art and science
of formulating, integrating, and implementing decisions between the business and IT, which enables an organization to achieve its objectives
•In response to Business objectives, IT-Business alignment has been traditionally viewed as an essential function of business , and as a necessary aspect of enabling sustained competitive advantage through coordinated planning between the business and IT.
•This is true to a large extent as IT-Business alignment continues to be one of the biggest concerns of management.
•Studies have shown that IT-Business alignment is inadequate because the business climate is in a state of dynamic change and innovation. In addition, studies have further shown that alignment attained is very temporal in
3
nature, and that it falters over time.
Inadequacy of IT-Business Alignment
(Contd..)
• Misalignment
•
A narrow focus on alignment of divisions with its needs instead of business as a whole
•
Misalignment resulting from restructuring activities like M&A, etc
•
•
Different divisions driving independent initiatives
• Complexity of the system, applications and infrastructure
Divisions addressing their individual competitive needs
4
Alignment Trap
• IT Effectiveness (e.g.
•
increased IT flexibility)
provides