The Successful Business
"If you want to climb a mountain, start at the top of the mountain." Implicit within this analogy is an underlying need. That need is for C-Suite executives to know how each department, function, team and individual will be performing when the business is successful.
Every successful small and medium-size business has goals and targets to work to, so it becomes and stays successful. They measure past and current performance with key performance indicators or KPIs. Those individuals and teams adjust their actions accordingly so next month or next quarter shows the planned-for results in line with the overall, long-term strategy. The actions taken are supported by systems, tools, and appropriate training.
In business, this is typical. The people in the organisation know their purpose and they deliver by utilising the right processes. Those processes use modern technology to provide automated simplicity. Therein lies a potential problem.
The Potential Problem
Successful business owners and senior executives have always developed a business strategy. Today, technology is applied in almost every area of a business. It is the assumed infrastructure on which the business relies.
Modern technology is more powerful and complex so it can enable automation. It is more capable so it can automate more processes, and it is more prone to failure (or, at least, prone to delivering less than was intended.) This happens because the business strategy and the IT strategy lack sufficient coordination. The result is they are slightly, or generally, misaligned.
Business managers and directors understand their business, their market and the USP's of their products or services. They tend not to understand the technology infrastructure so well, so they often leave technological innovation to technology experts. Technology experts rarely understand the business so well. The first result, therefore, is divergence of action, and the second is the misalignment of goals and a failure to fully deliver.
Technology managers are forced to focus on the increasing complexity of the systems they need to understand, install and run on behalf of the business. Technological innovation is greater than ever, so keeping up with such changes takes a great deal of focus.
The business side brings similar pressures. Marketing must engage more fully with potential and current customers and clients. Sales and Marketing must communicate better with each other, so more complex customer relationship management (CRM) systems must be installed and rolled out. Increased revenue puts demands on raw material and finished product stock control, and this, in turn, impacts logistics. Everything must be accounted for, and all actions and results must be reported to senior management who then must decide how to respond as part f the overall business strategy.
It is natural for senior and middle managers to focus on their own areas of responsibility rather than to wear a secondary hat of CTO or CIO. Business managers, therefore, tend to make demands on technology systems rather than to integrate with the technology function.
The Impact
Such complexity and specific focus encourage misalignment. Misalignment between business strategy and processes, and technology serving them results in reduced business performance, increased effort, increased costs and, often, poor accountability and missed deadlines.
The Immediate Need
The obvious need is for a strategic technology plan to align with the strategic business plan. Every business's technology systems have strengths and weaknesses vis-a-vis the business goals and their current status in terms of achieving those goals.
The technology strategy must focus on identifying how the business's functions align with its own goals so
Technology evolves quickly, so part of the strategy must be to align the business's longer-term needs with the current technology, and how well current systems will satisfy those needs. If they will not, then innovation must be planned carefully to avoid redundant systems, keep costs down, and minimize time spent introducing and replacing new systems without negatively impacting business performance.
The Solution
The solution to aligning technology and business strategy falls into several areas.
Clarify long-term and shorter-term business goals. Use these to determine the current and future processes that must perform to standard. This implies defining standards to which employees, contractors, and suppliers must perform.
Clarify the business's processes that must be in place to meet those goals.
Clarify and agree how employees, contractors, and suppliers communicate so they deliver on their goals.
Address the above three points from the point of view of hardware and software systems. This will include what might or should be brought in-house and what should be contracted out. Both require their own monitoring systems.
Assess budgets for both the overall strategy and the day-to-day functions. Many technology budgets are looked at as individual elements rather than as part of the overall plan. Others focus too much on the capital cost of acquiring a totally comprehensive hardware and software solution to meet the perceived needs. A current example of this would be the powerful CRM systems currently on the market. The capital costs are known and budgeted for, but the installation, roll-out and maintenance costs tend to be minimized or "assumed."Technology budgets, therefore, benefit from being seen as part of the overall business plan, rather than simply as line-items, which is the more traditional approach.
The longer-term business needs should be compared with the likely innovations in IT. This will enable a balanced view can be taken of what to buy, develop and install now, and what should be left to a future decision. Part of this process includes what current systems can be easily modified to meet a future need without incurring new capital expenditure.
Accountability is an essential part of the aligned strategy. Who will be held accountable and for what? This applies to the C-Suite level as well as to line management and team member levels. Accountability demands that relevant personnel are part of the communication, education and training processes. Communication should be two-way, so those at the coalface are involved and take some ownership of what the IT systems will do to enable them to deliver on their own goals.
This process will expose risks so they can be removed or minimized. Personnel, therefore, can be suitably trained to respond to those risks if they cannot be removed.
Finally, the solution must include how each aspect of the aligned strategy, the processes and the intended performance levels will be measured. A basic plank of quality management is 'what gets measured gets done.'
The Take-Away
Properly aligned technology and business strategies demand effective business decisions to be made so IT can perform effectively as the business's infrastructure, rather than as an end in itself. The knock-on effect of that is that better business decisions are enabled and encouraged because more accurate and pertinent data will be available to all who need it.