eCompetitors

Business & IT Planning

Business & IT Alignment – A Ten Step Guide

1.      Understand precisely what businesses (industries) your company competes in

2.      Understand the business strategies and business objectives of each business unit

3.      Identify IT activities and solutions required by each strategic business unit

4.      Identify IT activities and solutions required by each cost center

5.      Identify potential IT activities and solutions that can be shared by multiple areas

6.      Highlight where inconsistent business unit strategies and objectives limit shared opportunities

7.      If appropriate, as part of group strategy, modify the strategies and objectives of one or more business units to maximize sharing opportunities

8.      If corporate strategy and corporate budgeting processes enable enterprise resource allocation, then allocate resources based on corporate-driven priorities and group strategies that analyze and make the necessary trade-offs which should be made in concert with group strategies.

9.      As part of an ongoing process, it is also relevant to analyze resource allocations vis-à-vis competitors. (Although there are many cases of businesses doing more with less.)

10.  With the basic alignment that results from above, all of which is simple to do if the executive team truly wants alignment, the rest is efficiency – a much harder goal because it requires analyzing and improving every corporate process in isolation and as groupings of linked processes (which should also be viewed in terms of linkages to channels, customers, vendors, and all other stakeholders).

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Business & IT Planning

Aligning business and IT is simple with a clear list of the company’s lines of business. Without it, aligning IT with the goals of the “business” is next to impossible.

Aligning IT to the business has been, and should be, the top CIO objective.

The mistake most often made by CIOs, is that they attempt to align IT resources with their company’s organizational structure - which is a big mistake.

Corporate planners often make the same logical mistake when they engage in departmental planning - rather than true corporate planning which requires a clear identification of, and business unit plan for, each industry (line of business) the company competes in.

A CIO can gain respect from the other C-level executives and make the job of business-IT alignment much easier if they lead the charge for better (and more structured) planning.  Business plans can be as simple as one page long, or a big fat book. As long as the CIO requests (demands, if possible) that there is only one list of businesses (which can change over time) then alignment is easy.  It is important to note that many cost center will require IT resources, but the discussion needs to be focused on how that cost center supports some or all of the business units in terms of their business objectives. 

One of the key reports produced by the eCompetitors Inc’s Global Industry Dashboard [TM] is a list of a company’s lines of business - the industries in which the company competes, along with an industry analysis for each business. This listing of businesses (and five-forces industry analysis) should provide the backbone of the company’s corporate planning framework.

All IT plans and activities, in fact and all cost center plans and activities, should align its resources with the objectives and requirements of these business units.  

The common mistake many companies make today is they engage in organizational planning without a clear focus on what their lines of business are.

For CIOs, especially for CIOs of large companies that compete in more than one hundred businesses, this one report represents, in many cases, a better framework for them to align their corporate IT resources against than all their previous attempts put together.

For example, if a centralized information systems (I/S) department develops a telemarketing system for the centralized marketing unit, then a conversation between I/S and marketing may be required to properly allocate the I/S resources to the corporate SBUs that will benefit from the new telemarketing system.

In practice, it is not uncommon for a business unit manager to discover people supporting the business heretofore unknown. In some cases it’s the business unit manager who gains valuable insight into support functions performed behind the scenes. In many cases, it becomes obvious that resources are not aligned with the needs of the business, and the people are quickly re-allocated (and the budget is changed accordingly).

The number of people applied generally refers to the number of full-time employees applied to each business. In some cases, it might be appropriate to differentiate between full-time and part-time employees, as well as consultants. The overall goal, however, is to clearly indicate how many people are working for each business.

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