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Information Technology has been the fundamental driving force in businesses for the last few decades. Still, companies continue to invest millions of dollars to get ahead and remain competitive, however, the dividends of this investment range from smart investment to the not-so-smart.
Despite its critical role, IT departments continue to be viewed as siloed away from the rest of the departments and misaligned with the broader organizational goals.
A report by the Economist Intelligence Unit affirms this viewpoint. According to the survey, 31%, of non-IT respondents view IT departments as misaligned with the digital transformation goals. For a department that is supposedly in the driving seat of organizational digitization strategies, misalignment can lead a company down a slippery slope.
At its core, alignment implies that every IT investment, project, or activity must help create and deliver value to the business. In essence, the IT department should aim at attaining business-related metrics and not IT metrics alone.
Reasons Why Business Goals and IT Strategy Must Align
Business-IT strategic objectives alignment is key to the success of the modern organization. Here are some of the reasons why alignment is necessary to survive and compete in today’s complex business ecosystem.
Technology plays a critical part in how organizations create and deliver value. As competition stiffens, companies with a better alignment will deliver their products and services faster to their customers. They will also capture early feedback, which is critical for design-driven product development.
Companies with a high degree of alignment have a higher probability of making more profits. With all departments and staff reading from the same script and implementing the unified business strategy, the chances of hitting gold is multiplied. The reverse is also true; departments pulling apart creates a loophole for loss of synergies and money.
Better Customer Experience
All that a customer wants is excellent service and nothing less. Aligned businesses will probably deliver a better customer experience hence winning the loyalty of their clients. Misalignment disillusions business most essential stakeholders who left with little option, head for the exit doors.
Collaboration takes effort to achieve and maintain, particularly in medium and large businesses. Alignment makes it worthwhile for teams to work together towards common business goals. With companies expanding vertically and horizontally, aligning business and IT goals becomes imperative in curbing the silo mentality.
Greater Industry and IT Agility
The business environment is dynamic as customer preferences and priorities shift. Rigid, misaligned companies will find it difficult to react to customer needs hence losing out in the market race. With better alignment, a business increases its agility that allows it to respond to changes.
Strategic Technological Transformation
Technology has become a potent driver of growth and competitive advantages but also a source of failure. One of the most sobering truths in today’s business environment is that despite the heightened digitization, too much data resides in silos. The alignment of business and IT objectives helps organizations reap the dividends of digital transformation and reduce the risk of failure.
Risk Management and Compliance
Technological transformations come with real risks such as failure of an application, market/demand risk, and the threat of cyberattacks. Alignment makes it easier to control and manage technological risks by enabling a concerted approach to risk analysis and mitigation. Aligned companies are also in a better position to comply with evolving compliance issues.
Creates Greater Integrations
Majority of companies are leaving money on the table because of poor IT integration. Business-IT alignment allows businesses greater integrations hence creating efficient workflows and faster decision making.
What Causes Misalignment?
Despite the immense benefits of business-IT strategy alignment, many companies still find it onerous to maintain effective inter-departmental communication. The rivalry between the CFO and CIO, which sometimes drags the staff, leads to full-blown flare-ups impeding organizational success.
The poor state of technical literacy among business leaders may be to blame for misalignments. If business leaders place unrealistic expectations on IT, it creates disharmony as IT teams push back. Moreover, as business leaders consider new strategic directions without involving IT, the result is a tug-of-war bogging down any meaningful progress. Lastly, technical illiteracy shows when leaders are unwilling to discard archaic technology despite clear industry trends and best advice from IT teams.
To help your business get alignment right, get in touch with us for expert guidance.