Aligning IT and Business
for Better Results
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 2
Presenter
Michelle MooreSenior Director, Organizational & Personal Effectiveness (Canada, Europe, Middle East & Africa)
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 3
Today’s business environment
RapidGlobalization
ChallengingEconomic Climate
Changing Demographics
Rapidly Advancing Technology
Focus on Sustainability
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 4
It’s a VUCA world
Volatility
Uncertainty
Complexity
Ambiguity
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 5
One certainty?
In this VUCA world the only certainty seems to be the unstoppable advancement of digitalization.
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 6
The new normal
By 2020, every company will be an IT company and every leader will be a digital leader..."digital is the business; the business is digital.
Peter Sondergaard, SVP and Head of Research - Gartner
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 7
How are we doing?
Harvard Business Review – Business Transformation and the CIO Role
© 2015 Global Knowledge Training LLC. All rights reserved. 05/02/2023 Page 8
Agenda
1. What is IT and Business alignment?2. Why is Business and IT alignment so important?3. Improving Business and IT alignment4. Questions
What is Business & IT Alignment?
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 10
What is business – IT alignment?
‘A dynamic state in which a business organization is able to use information technology (IT) effectively to achieve business objectives – typically with improved financial performance.’
‘The capacity to demonstrate a positive relationship between information technologies and the accepted financial measures of performance.’
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 11
Common characteristics of definitions
The outcome of alignment is a positive result on business performance (quantitative or qualitative)
Alignment is evolutionary and dynamic
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 12
The benefits of alignment
Cost effectiveness Quality Responsivene
ss Agility Innovation
Strategy & Business, ISSUE 70, Spring Edition 2013
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 13
Enablers
Senior Executive Support for IT
IT involved in strategy development
IT understands the business
Business – IT partnerships
Well prioritized IT projects
IT demonstrates leadership
Inhibitors
IT – Business lacks a close relationship
IT does not prioritize well
IT fails to meet commitments
IT does not understand Business
Senior executives do not support IT
IT management lacks leadership
1
2
3
4
5
6
Enablers and inhibitors of alignment
Source: Luftman 2003
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 14
Recognizing alignment
How effectively do IT & business communicate?
How is IT governed?
How effectively do IT & business collaborate?
How is the value of IT measured?
How is technology planned and consumed?
Do all employees have both technology & business skills and knowledge?
Source: Luftman 2003
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 15
How effectively do IT & business communicate?
• Minimum understanding between IT and business• Casual or ad-hoc approach to capturing learning • Command and control approach to communication• Limited knowledge sharing • Few strong relationships
Poor Alignment
• Pervasive understanding between IT and business• Strong and structured capture and application of learning• Informal protocols• Knowledge sharing inter and extra-enterprise• Many strong relationships even with customers
Excellent Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 16
How is IT governed?
• Business and IT strategic planning are separate and ad-hoc• CIO reports to CFO• IT is seen as a cost centre• IT investment management is cost-based• No formal steering committees exist• IT investment prioritization is reactive
Poor Alignment
• Business and IT strategic planning are integrated across the organization• CIO reports to CEO• IT is seen as a business driver and profit centre• Investment management is based on value• Steering committees exist with both business and IT participation• Business and IT prioritize investments together
Excellent Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 17
How effectively do IT & business collaborate?
• IT is perceived as a cost• IT does not have a seat at the business table• IT takes risk with little reward or recognition of accomplishments• Program management is ad-hoc if at all• Relationship is driven by conflict with minimal trust• There is not a business champion for IT
Poor Alignment
• IT and business collaborate and share decisions• IT has a seat at the business table• Risk and rewards/recognition are shared• Program management is practiced • Relationship is one of valued partner• Business sponsorship exists at CEO level
Excellent Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 18
How is the value of IT measured?
• Metrics are technical and are not related to business• Business metrics are not related to IT• Some service level agreements in place but sporadically• Benchmarking not practiced• No business reviews or performance assessments• Continuous improvement not evident
Poor Alignment
• IT metrics are related to business (and vice versa) and extended to external partners• Service level agreements are in place and extended to external partners• Benchmarking is routinely performed with partners• Business reviews and performance assessments are routinely performed and include external
partners• Continuous improvement is pervasive
Excellent Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 19
How is technology planned and consumed?
• Focus is transactional back office systems• No common articulation or understanding of architecture• Limited integration of technology or digitized business processes• Little transparency or flexibility
Poor Alignment
• Business strategy is the driver of technology• Enterprise-wide standards• Integration is enterprise wide and includes external partners and customers• Flexibility and agility
Excellent Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 20
Skills
• Entrepreneurship and innovation are discouraged• Power is in the business• Command and control management style• Resistant to change• No career cross-over
Poor Alignment
• Entrepreneurship and innovation are the norm• Power is equally distributed at C-Level including CIO• Management style is relationship-based• Career opportunities exist across the organization• Cross-training and education are widely available
Excellent Alignment
Why is alignment so important?
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 22
The third era of computing
Source: Gartner – CIO Agenda ‘Taming the Digital Dragon’
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 23
What is digital?
The use of technology to achieve the vision of the organization and radically improve performance.
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 24
Creating new opportunities
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 25
…and lots of disruption
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 26
Business models
Digitally modify/ complement existing business offers (usually physical)
Create new digital business
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 27
Digitally modifying/complementing physical business
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 28
IKEA – Product innovation
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 29
Business processes
Process digitizationImprove employee productivityBetter decision making
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 30
Improving employee productivity
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 31
Better decision making (crowdsourcing)
Crowdsourcing product ideas and features
Every customer is R&D
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 32
Customer experience
Increase customer understanding
Improve top line growth – new sales opportunities
Increase customer touch-points – strengthen the brand or improve the customer experience
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 33
Enhancing the customer experience & improving sales
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 34
Employee experience
Increase connection with the organization and colleagues
The new way of working
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 35
The new employee experience
The New Way of
Working
Mobile
Flexible
Inclusive
Social
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 36
The New Way of
Working
Mobile
Flexible
Inclusive
Social
The new employee experience
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 37
The main trends main behind digital transformation
Social
Mobile
Analytics Cloud
Internet of
Things
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 38
The emerging trends behind digital transformation
3D Printing
Artificial Intelligence
Robotics
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 39
Poll question
Improving IT and Business Alignment
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 41
What can you do to improve alignment?
Educate IT on Business
Educate Business on IT
Optimize your governance
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 42
What can you do to improve alignment?
Educate IT on Business
Educate Business on IT
Optimize your governance
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 43
Understanding business
Understand the
business
Understand the
functions
Understand the
individuals
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 44
Understanding the whole business
The Formal Organization
The Informal Organization
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 45
The formal organization
The Formal Organization
The Informal Organization
Policies & Business Processes
Priorities and Objectives Organizational Charts
Vision & Mission Statements
KPI’s Job Roles & Descriptions
Business Model
Business Capabilities
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 46
And don’t forget the external environment
Competitive SWOTPESTEL 5 Forces
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 47
Educating IT on the business – The Business Model Canvas
A business model shows how value is:
CreatedDeliveredCaptured
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 48
A simple 9 box grid
Key PartnershipsActivities and
resources acquired
outside the enterprise
Key ActivitiesBusiness processes
Value PropositionSolutions to client needs
and problems
Customer RelationshipsCreated and
maintained for each client segment
Customer Segments
Types of clients served
Key Resources
Assets needed to provide the
value propositions
Distribution ChannelsAvenues of delivery of
value propositions
Cost StructureCost of performing all the
activities of the organization
Revenue StreamsResult of value
propositions to clients
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 49
…and the informal organization is really important
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 50
The secret to success – the soft skills
Interpersonal Understanding
Influence & persuasion
Relationship building
Customer-service
orientationEntrepreneurism Creative thinking
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 51
What can you do to improve alignment?
Educate IT on Business
Educate Business on IT
Optimize your governance
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 52
In the past…
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 53
But today it’s different – the consumerization of IT
The specific impact that consumer-originated technologies can have on enterprises
Consumerization cannot be stopped
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 54
The impact of consumerization
Non-IT employees are more comfortable with technologyHigher (and sometimes unrealistic) expectations:
DevicesAccess ApplicationsUser Experience
An increase of shadow IT
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 55
Risks of shadow IT
Increased costs (duplication of services,
loss of economies of scale)
Risk of data loss
Process Inefficiencies
Compliance Issues
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 56
Becoming IT savvy
Learn about corporate versus
consumer IT
Learn about the trends
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 57
Becoming IT savvy
Learn about corporate versus
consumer IT
Learn about the trends
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 58
Security
Optimizing costs
Regulatory compliance
Eliminating complexity
IT’s challenges
Keeping IT Running
Delivering value
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 59
The legacy of corporate IT
In the past when business asked for something IT would build an isolated solution
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 60
The legacy of corporate IT
And then we realized those solutions needed to be connected within the organization
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 61
The legacy of corporate IT
And then outside of the organization as well
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 62
The result…
IT-Business disconnect
SilosIncreased cost /
duplicationUnclear views of
the systems
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 63
Getting back on track
Enterprise Architecture
Cloud Computing
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 64
Becoming IT savvy
Learn about corporate versus
consumer IT
Learn about the trends
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 65
Understand the trends
Social
Mobile
Analytics Cloud
Internet of
Things
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 66
Understanding the trends
66
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 67
10 Strategic Technology Trends (1 to 3 Years)
Source: Gartner
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 68
Top 5 Technology Investments (1 to 5 Years)
Source: Gartner
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 69
Gartner Hype Cycle – Longer Term
Source: Gartner
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 70
Emerging Technologies – 2014 Hype Cycle
Source: Gartner
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 71
What can you do to improve alignment?
Educate IT on Business
Educate Business on IT
Optimize your governance
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 72
What is IT governance?
The processes that ensure the effective and efficient use of IT in enabling an organization to achieve its goals.Gerrard
The decision rights and accountabilities that encourage desirable behavior in the use of IT. MIT Sloan
The leadership and organizational structures and processes that ensure that the organization's IT sustains and extends the organization's strategies and objectives.ISACA
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 73
The value of IT governance
Architecture Question
Are we doing them the
right way ?
Are we doing the right things ?
Strategy Question
Are we getting the benefits ?
Value Question
Are we getting them done well ?
Delivery Question
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 74
A shared responsibility
Business IT
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 75
Getting IT governance right
People (Who)
Portfolio (What)
Governance Framework
Processes (How)
© 2015 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 76
Play your position in governance
IT Architecture
ITInfrastructure
Business Applications
IT Investment Prioritization
Business
IT
Business & IT
IT Principles
© 2015 Global Knowledge Training LLC. All rights reserved.
Business – IT Alignment Program: Coming Soon!
1 day Business Leader Program
3 x 3 day Modules for Senior IT Leaders
© 2014 Global Knowledge Training LLC. All rights reserved. 2023-05-02 Page 788966: Developing Client Relationships for Consultants (CO40)
Continue the Conversation
@GKCanada
© 2015 Global Knowledge Training LLC. All rights reserved.
Find Out More
www.globalknowledge.ca
On-demand and live webinars, white papers,
blog, courses, special offers and more…