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Should you align your IT and business strategy?

by George Dearing
 
You'd be hard-pressed to find a business that isn't hinged to information technology in some way.

​A key roadblock is the perception of IT in the enterprise—specifically, that few executives consider their IT leaders closely involved in strategy.

However you frame it, the systems that help manage our information assets are more important than ever. According to a study recently released by CSC1, well over half (64 percent) of CIOs report higher IT spending in 2015 than 2014, up from 46 percent in 2013. And CIOs are putting the money to use in a variety of ways: 69 percent are investing significantly in big data, while more than 80 percent view data security as the top focus.

All of this would seem to indicate the importance of aligning IT and business strategy. However, there are continual challenges keeping IT from the decision-making table.

Key roadblocks to aligning IT and business strategy

IT effectiveness at functional processes
The major roadblock, as is often the case, is cost. 52 percent of CSC survey participants (66 percent in North America) identify budget constraints as one of the top roadblocks to innovation, where IT often plays a leading role.

Another key roadblock is the perception of IT in the enterprise—specifically, that few executives consider their IT leaders closely involved in strategy. And according to a recent McKinsey report2, confidence in IT’s ability to support growth and other goals is also fading. (See chart below.) The research points to wide gaps around priorities (cost-cutting v. growth), business relationship skills, and budget constraints as the main drivers of this trend.

But even if budgets are a little tight, that doesn’t mean CIOs aren’t looking at newer technologies and disruptive approaches. But that’s also where things can get messier. Case in point: according to the report, over the next three years, Webscale IT (34 percent), machine-to-machine integration (31 percent), and “software-defined anything” (29 percent) will be considered a major part of businesses’ strategic plans. Compounding that, 70 percent of all respondents—and 79 percent of those in Europe—said modernizing legacy applications is a high priority over the next year.

​While a CIO might not own the relationship, their guidance can mitigate the risk associated with compliance, security, and technology selection.

 

IT can lead, but when?

If IT is to lead, it first needs to put more focus on areas that generate revenue and drive growth. With that objective, CIOs can approach IT and business strategy solutions with the mindset of solving a real business problem, not just explaining a technology or wedging in a vendor product.

And there are plenty of opportunities for IT to take the baton:

 

  • When older applications get reworked, it’s a great time to see the business in transition. IT should jump in and lay the groundwork for things other than tech stacks and programming languages.
  • IT groups are in a great position to spur new product development and service innovation. They’re at the frontline where technology meets process, and as a result, often spot deficiencies first. CIOs should spend more time with corporate strategy groups and product development. They won’t lead a go-to-market approach, but by contributing to the “how,” their value goes up.
IT priorities
  • Senior technology leaders can also drive a company’s partner strategy. As alliances go, some are more technology-centric than others, requiring more of an engineering or software mindset. While a CIO might not own the relationship, their guidance can mitigate the risk associated with compliance, security, and technology selection.

The Internet of Things and a cloud-first approach won’t help anybody, much less CIOs, without an intricate view of how the company operates. It’s way more than tactical—and it looks like CIOs are getting the message.

Are your IT and business strategies aligned?

If you don’t have a change management plan in place, there’s never a better time to start than right now.
 
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George Dearing has more than 15 years of experience helping organizations understand how information, technology, and the Internet impact business. As founder of the Dearing Group, he advises clients on strategy, business development and communications. After working for one of the first Internet consulting firms (USWeb) in North America, he’s run marketing groups at software companies, directed strategic alliances at professional services firms, and helped early-stage companies deliver software-based business solutions.
 
 
1 CSC Global CIO Survey: "CIOs Emerge as Disruptive Innovators." http://www.csc.com/cio_survey_2014_2015/aut/115333-csc_cio_report_form