RSR Research: Time to Try Business-to-IT Alignment

Mar 31, 2009

By Brian Kilcourse,
Managing Partner

Through a special arrangement,
presented here for discussion is an excerpt of a current article from Retail
, Retail Systems Research’s weekly analysis on emerging issues
facing retailers.

There’s an ongoing argument in the technology
press and on techie blogs that “IT/business alignment is dead.” This
has been fueled by a recent book, Business/IT Fusion- How To Move Beyond
Alignment And Transform IT In Your Organization
, where author
Peter Hinssen said, “We’ve been studying Alignment between business
and IT for more than twenty years now. Scores of models have been developed,
and enormous efforts have been spent on trying to make alignment work.
But the results are horrible. Despite the huge efforts, in money and in
people, the gap between business and IT has never been greater and never
deeper. The relationship has never been more sour, and the attitude never
more hostile.”

RSR is currently sifting through recent survey
responses to its own study on IT and Business Alignment in Retail, and
it is clear that the IT executive is the one (and often only) executive
on the hot seat to make sure that the company’s investment in IT enablement
of the business is working. Consider these facts from the survey:

  • Retail
    Winners (predictably) score higher in meeting or exceeding the business’s
    expectations of the IT function;
  • Almost
    60 percent of the survey respondents indicate that “IT leadership
    is largely responsible for connecting to business department leaders”;
  • Over
    60 percent of the survey respondents indicate that meeting corporate objectives
    is at least aided by, if not dependent on, effective IT value delivery;
  • Although
    almost 95 percent of Retail Winners say that the Executive Committee approves
    the IT operating budget and over 80 percent say that the Committee also
    approves the IT capital plan, over 70 percent of those same respondents
    indicate that conflicting demands for IT resources is by far their biggest
    challenge. And that is because for over 75 percent of Winners who
    responded to our survey, the Executive Committee doesn’t involve itself
    in prioritizing projects or reviewing project status.

Let’s make the call: Retail Winners are better “aligned” because
they have over-performing IT executives, and because they drive business
leadership to take an active role. Retail Winners indicate that the biggest
opportunity to overcome inhibitors to improve IT value delivery is (according
to over 80 percent), “more business involvement in IT efforts.”

I’m reminded of something my father used
to say to me when I managed to screw up a school project and blamed everything
but myself: “It’s a poor workman who blames his tools.”
Businesses have engaged in “plausible deniability” for years when
it comes to IT. It was easy, after all. As we have commented in various
Retail Paradox Weekly columns over time, non-IT’ers don’t “get” the
language of IT. Business people don’t understand IT and they don’t want to.
It’s certainly the last thing a CEO wants to spend time on.

But why not? What’s
the excuse? If the business is dependent on it, then the business better
understand it. It’s time to rename the challenge: it’s Business-To-IT alignment
that has to be addressed, and not the other way around.

Discussion question: What are the challenges
of aligning business objectives with IT capabilities? What’s the ideal
circumstance for an IT director to succeed at his job?

Please practice The RetailWire Golden Rule when submitting your comments.

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4 Comments on "RSR Research: Time to Try Business-to-IT Alignment"

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Dan Raftery
13 years 1 month ago
Kilcourse’s observations make sense, based on what I have seen. However, the core issue has not been mentioned. Silos exist in large organizations for a reason. Expertise needs to be channeled and managed as a critical asset. The larger the organization, the more complex this gets, requiring top notch leadership with subject matter expertise. It is not wise and probably not possible to break down silo walls. A more realistic approach is to build bridges, or functional connections between them. Herein lies the rub. People who understand what goes on in the IT and business silos for example would be the right resources for the bridge. But few companies have experienced people with dual or multiple function capabilities. Worse–where do the bridge people report and from where do they pull power? Tough questions for a traditionally organized corporation. To see where this does work, you need only to look at smaller businesses. Randy Fields was the poster boy for this dual capability concept many years ago. Today, any company under, say, $10 million in annual… Read more »
Anna Murray
Anna Murray
13 years 1 month ago
Over the last 12 years in my career as a technology consultant I have found myself thinking time and again, “I want to have this purposeful discussion with the CEO/CMO/COO. But he needs like 2 weeks of straight technology education before he can even understand the issues.” For a long, long time I have been a proponent of clear communication from IT to the business. What IT folks need to do, I would lecture my staff, is to put things in terms business people understand. Stop talking like geeks. Speak to the business! Well, you know what, that train only goes so far. Here’s the situation: In the last five years, in most business, the technology discussion IS the most important one happening in the room. And most executives don’t recognize it. Executive committees act like they don’t have to understand technology. Someone else will do it for them. What would happen if they felt the same about accounting and numbers? They don’t want to learn tech, and if the past is any guide, they… Read more »
M. Jericho Banks PhD
M. Jericho Banks PhD
13 years 1 month ago
I was with Brian Kilcourse right up until his final conclusion, “it’s Business-To-IT alignment that has to be addressed, and not the other way around.” I beg your pardon? Who works for whom? I’ve been a retail CTO and know whereof I speak. This is an absurd conclusion. As a retail acolyte in the mid-70s with Fleming Foods in Philadelphia, I attended a company-required course titled “The Politics Of The Computer Department.” This was back in Cobol, card-deck days, but it had already become an issue. The Computer Department was commonly referred to as the “Voodoo Department.” Little has changed in this relationship in thirty years. Successful IT (and Research) departments must first understand that they are services. Then, they must have leaders who are adept at relating to and communicating with other department heads. IT and Research will remain voodoo departments, but here’s the key: They should always be able to suggest and recommend solutions and actions, in addition to presenting data. This skill is rare and heavily dependent on the department leader’s understanding… Read more »
Ralph Jacobson
13 years 1 month ago
The good news is that research is showing that more and more IT decisions are being made and driven by lines of business outside the CIO’s office. The point needs to be made that it is still true that non-IT people feel that technology is an expense to be managed, rather than an asset to be leveraged. That mindset permeates the silos of business to continue the finger pointing. It is fine to have functional expertise, arranged in silos. Silos are not a bad thing in all respects, however, CPG has outsourced IT for years. Retail is starting to do the same. Bottom line, IT is not a core competency of most retailers, and most should let it go to the experts. An IT Leader in a retailer or CPG firm can partner with the outside experts to get a “sponsorship” to share views with the other lines of business in the firm. Taking inherent prejudice out of the discussion is beneficial to all stakeholders. Keeping IT discussions around 1)What’s the business challenge, 2)What can… Read more »

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