Three suggestions to get from IT-Business “alignment” to IT-Business “integration”

Let me ask this question: “How can we help IT have a better understanding of how the business makes money, thereby having a staff that knows where the money comes from and where it goes?”  Now you are probably asking yourself, “why would I want to do this? I don’t have enough time to do what I need to do now.” Well by doing this you will accomplish the task of having a staff that knows how to see opportunities to differentiate the company from the competition. The key here is to get beyond the old cliche of IT-Business alignment to more of the IT-Business integration.  IT-Business alignment implies that IT is separate from the business, whereas IT-Business integration is the effort to integrate, to a higher degree, IT into the business decision process.  To accomplish that integration, everyone in IT has to learn how the business makes money and how to use that information to generate new innovations and revenue opportunities. Doing so will help you to increase IT’s value to the organization.

Now I know that not every person in IT will have the bandwidth to pay attention to this.  As in most shops that I’ve been into, the staff has always been “heads down” and have been content to just be the providers to the business.  But we are working in a whole new world of business and if IT wants a seat at the strategic table we have to figure out how to speak the language of business.  Now, there is a flip side to that statement; “business needs to understand IT as well.  By giving the business a glimpse into IT, this would hopefully show the business how IT is understaffed, under-budgeted, under pressure to keep the lights on AND be innovative.” I agree, but if we work to integrate ourselves we won’t have to try to get business to understand IT, so I want us to shoot for a higher-level of understanding here and realize that this is a symbiotic relationship.

In previous client engagements, I’ve spoken about ways to accomplish IT-Business integration.  This is what I would like to share with you today.

In the engagement/project kickoff meetings I state that in order to achieve this type of “IT-nirvana”, you have to think like the CEO and CFO.  I will guarantee you that at the top of every CEO’s and CFO’s mind is the fact that for every dollar coming in the front door, a portion is going out the back in the form of costs. If you take time and study that equation you can discover ways to save and generate revenue.

I also advise my clients to think ahead. Ask yourself not just how IT contributes to today’s business model, but how that will change in the future.  This really gets folks thinking on a different level (strategic instead of tactically).

At one large customer I asked the Sr VP of IT if he could invite the CFO into one of the department meetings.  My reason for doing this was to have a focused conversation around the “bottom line” with the staff.  The importance of the “bottom line” discussion with his team was to share how the company earns revenue, where the profit goes and where excess cash may be invested.  After the meeting the Sr VP told me that this information will be invaluable help to focus his managers thought processes around innovation.  I told him that that was the point.  I added that if you understand areas where the company is growing in, you can potentially come up with new ideas or different ways to do things that will bring a competitive advantage. These ideas may range from a function on a website to improvements in customer service to changes in internal processes, etc.

At another client engagement where I was in place to assist with the development of a Strategic IT Plan, I noticed that there was a lot of disconnect between IT and the business.  During my interview process I asked the question if anyone could describe to me the corporate mission, corporate values, and top priorities.  Hardly anyone that I spoke to could.  That brings me to my second way to help with the IT-Business integration; Put in place an extensive orientation for all new-employees (both entry-level to seasoned industry veterans).

These extensive orientations will help teach new employees about the company’s mission, priorities and its business practices. They would also learn how IT is organized and run, as well as the ways that IT interacts with the business to understand its needs and priorities and then translates these into IT initiatives.

I have also recommended to have the management and executives blog and to send memos periodically.  On the flipside, I suggested to IT management that they make it a policy for employees to attend company update meetings that cover strategy and competitive position, along with listening in on quarterly corporate earnings calls. The time spent on these calls would be beneficial since there is usually a lot of talk about performance and key plans.

The last way that you can move to IT-Business integration is to map IT functions to business processes.  In another engagement I was in the section of my project that involved the helpdesk.  Here is where I saw a huge disconnect.  The company relies heavily on IT to produce its products; customer-facing applications are tightly integrated with the ERP and manufacturing systems. But what I saw during my time sitting on the help desk was that they didn’t understand how all of the systems and manufacturing machines were integrated to scan and manufacture this product- which was a highly intricate process.

One example I made a note of was when a business user called in with a scanning problem, the help desk didn’t necessarily know which part of the process was not working. The same would be true for the system administrator who would see working machines, but no problem with a file transfer application being able to find the right file.

In my review of the day I decided that the solution to better IT support and create a less stressed-out helpdesk manager lay in fostering a more integrated view of business processes and IT operations. In my final report to executive management I suggested, as a start, they send as many employees as possible out to the manufacturing sites to learn about the equipment and systems they were servicing from the user’s point of view and to document that business-centric view.

Part of this engagement I worked with the management staff map out the company’s business processes to each application and the machines they run on and show how each was connected to the others. This map was a powerful illustration of how the employees who create and service each system contribute to their company’s top line. It also worked as a tool to show which systems impact revenue the most and which processes needed infrastructure improvements. Today, I’m pretty sure they still use the map as a training tool for new employees in IT to help understand high-level business process and systems flow.

By building an understanding of the relationship between how the business makes money and the work It does everyday helps the engineers appreciate the purpose behind their jobs and have a perspective and an appreciation of the business users’ requests. This in turn will help you create better partnerships with the business users and further the movement to IT-Business integration.

I’m getting ready to speak at a gathering of IT executives in a few months and I thought this would be a great place to preview my discussion, so please let me know your thoughts.

Cheers

 

~ by Michael Keen on May 4, 2008.