Holidays ending up shortly, it is time to rise up a little bit our views and to start discussing about Strategy.
When reviewing papers regarding IT Strategy, they often talk about IT Strategic alignement. Most of them seems to assert that the only acceptable strategy for IT is to be aligned with Business. Despite this general point of view, when rewinding the tape, some messages looked questionable.
For instance, when considering strategy you deal with long term goals and action plans. As it seems obvious, the spreading of strategic planning methods like Balanced Scorecard (BSC) has set the long term line to next year which is pretty short. Are we really still in strategy ?
First of all, there are the goals which draw up the vision. What will be the company during the next period, what will be the IT ? A long term company goal may be for instance “Changing the rate of a given type of business in the Revenue during the next 3 years” while a long term IT goal may have been “Improving IT productivity of 5% during the next 3 years”. Often goals are more or less short term : “Improving customer relationship process”, “Control and Manage Maintenance cost”,… It is not clear that these goals should be a part of the action plan.
Then, it comes to define actions scenarios to reach the goals. The best is to start with a SWOT analysis of the current situation regarding the goals. Then, you should identify all possible moves to go ahead. For each move, you now have to qualify impacts on competitors or internal resource and imagine their own move in response. And again identify what the company may do to respond to these moves.
Scenarios may end to be pretty complicated, and then, complex to assess. The set of scenarios represent the possible paths for the firm to achieve its goals from now to the long term line. Once company has selected a path, it may jump to another path according to a change in the business context or to a new risk. Sets of scenarios draw the maps which support the roll out of the Strategy.
Then Business Alignment may be considered as only a characteristic of IT Strategy which is still to be defined in each case according to a long term vision of IT role in the firm activity.
I very much liked your comments; and can relate.
I’m just beginning a final paper for my MBA, and have read a considerable amount of research in this area… (Though, still looking for more)
I believe that the ultimate target for Strategic IT effort is to go look beyond closing the Gap (aka fast following) to look at achieving a state where the distinctions between Business Strategy and IT Strategy are non-existent, or not explicit.
I would argue that most examples of IT Strategy focus on internal resources capabilities… improving/optimizing them etc. Though this is a portion of business strategy, a more substantial piece is about understanding the industry context and developed an optimal competitive response. So Business Strategy tends to be externally focused, while IT strategy internal.
I believe this internal focus creates a problem. A “following IT strategy” focused on closing gaps, can create a context where an organization may overlook business changes that could enable better competitive positioning within the with industry context.
I believe this situation is quite prevalent, and is limiting organizations achieving optimal returns from their IT investments.
Thanks again for your posting. And I’d very much appreciate your further thoughts on this.
I agree that there are differences in how Strategic alignment needs to be looked at between IT and the Business.
The main point I think is that IT cannot be isolated from the goals of the organization, both short and long term. There must be coordination and communication between all parties in order to accomplish the overall goals of the organization.
Jim
Tim,
You are right. IT Alignment may be interpreted as a following attitude : you should wait for Business moves before to launch an IT change and it should be in accordance with, not only to be linked, but with a similar pace, slow slow, fast fast.
James is right when he said that Business goals and IT goals should be linked.
But the starting point of this paper is the fact that strategy is not only goals, but also the way to achieve goals. if IT and Business goals should be linked, the links are often subtle since the two visions are usually far from each other.
The capability to create a strong IT vision is not only related to a Business capability, but to a special one based on strong IT understanding which usually comes from people experienced with IT. ISACA survey reports that implementation of IT Governance is twice successful when done by IT people.
I would just start saying that, although IT Strategy should obviously be linked with Business, it is not a mirror of Business Strategy but an autonomous activity.
Regards
Jerome