Digital transformation continues to transform the businesses landscape, affecting business strategies, operations and the development of products and services. Emmanuel Tita Sama, global account director: west and central Africa at Orange Business Services, explains the importance of aligning IT strategies with business operations.
Business IT alignment is an ongoing process, and certainly one that is worth pursuing in the modern business environment and remains one of the fundamental challenges of today CIOs.
Every organisation operates in an environment that is affected by evolving forces such as the economy, industry and competitors. Similarly, the knowledge and tools of IT are also continuously changing and evolving. To maintain differentiation and relevance, businesses need to adapt in response to their operating environments, or risk losing their competitive advantage.
Today, there are about 4,9-billion connected objects, and by 2020 it is estimated that there will be more than 25-billion. It is important to note that IT is not merely about connecting objects and businesses anymore; IT is treated as an enabler and leader of change that delivers flexibility and agility that business needs in today’s fast changing commercial landscape.
In order to create maximum strategic value over time, it is important to achieve alignment between IT and business strategies. The five steps outlined below are critical to the alignment process regardless of organization size, management style or existing perceptions of IT across the business.
Step 1 – plan
The planning step entails interpreting business objectives into measurable IT services. This phase assists in closing the gap between what business managers need and expect, and what IT delivers. IT management can translate service levels into underlying rules and priorities in a way that measures, tracks and empowers and guides at the same time.
You might start by compiling a list of all the strategic goals of the company from the CEO. The list should be short, about (3-5 items), below are some examples:
• Increase revenue and profit 25% within the next two years
• Increase customer based by 10-million new customers by the end of 2018
• Improve brand awareness by 20% with by the end of 2018
Step 2 – model
The modeling stage identifies resources needed to deliver IT services at committed service levels. This step involves mapping IT assets, processes, and resources back to IT services, then prioritizing and planning resources that support those business critical services. It may be worth asking Business Unit leaders to talk about what they want to do to achieve the business’s strategic goals.
Banks in Africa for example are looking to accelerate their pace of growth and development – by thinking big, acting big and delivering big. The question becomes: do they want more branches, more Apps, more ATMs or more smart phones to reach out to the mass market. Traditional banking models are fast becoming obsolete as there is clear move from “Brick and Mortar” to “Click and Mortar”. Branches are being closed and branch managers are now moving to play a relationship management role while some are moving to the back office.
The bottom line in measuring the success of alignment is the degree to which IT is working on the things that business managers care about. This means that IT must have processes in place for prioritizing projects, tasks, and support. Cooperation and teamwork is extremely important in this stage to achieve the overall business agenda.
Step 3 – evaluate
The evaluation step is a critical phase to ensuring success. Very often, organisations under-plan for implementation and pay the price in terms of over budget, delayed or failed projects. Step 3 takes the list of initiatives and creates a roadmap for IT, as a result of careful planning driven by one primary consideration. Business managers and leaders can brainstorm the hidden opportunities that will help IT to build solutions that will directly or indirectly help accomplish the strategic goals identified for the business. The next stage is then to work to identify multi-faceted opportunities that are not currently pursued.
For example, in this phase, banks would be looking to think big in their digitalisation strategy and evaluate an approach that captures opportunities that are derived from mass market adoptions and that, typically, accelerate financial inclusion. One strategy to achieve this is to partner with big ICT players with the necessary experience in complex ICT solutions delivery to ensure the maximum value is understood and delivered, and that is fully aligned with their business.
Step 4 – manage
The management step enables the IT staff to deliver on agreed levels of service. A single location for submission of all service requests is essential, as is prioritisation of those requests based on pre-defined business priorities. One can prioritise and select the best Ideas by ranking them according to projected returns They can also carry out proper assessment of the tangible and intangible benefits, to avoid ending up with tactical projects rather than strategic projects. Also businesses will need to pick top three benefits based on IRR from the list and figure out which ones will be resourced.
For example, Merck prioritised and signed a contract with Orange Business Services to deploy a 200-site, next-generation network that will support its digital transformation initiatives. Orange Business redesigned Merck’s global network and incorporated optimisation technologies delivered via Enterprise Application Management Riverbed. It uses Riverbed’s SteelHead CX to enhance the performance of all applications, including on-premise, cloud and SaaS, across multiple networks (MPLS, private VPN and public Internet).
Step 5 – measure
Taking steps to define and implement measurement improves cross organisation visibility of operations and service level commitments. Traditional IT management tools operate in functional silos that confine data collection and operational metrics to focused areas of functionality. They typically relate more to technology than to business objectives. Businesses can plan for and institute a serious post project Audit Policy and define measurement matrices to determine if the set objectives were actually met. They can also be accountable and showcase how business success is or was achieved.
Reporting on the benefits and aligning on IT governance increases accountability. An audit process will also help the organisation adjust the plan midway if expected results are in question. This helps IT articulate value to the business and can achieve agreement on necessary funding for new projects. Outside of a business context, isolated functional groups can’t get a holistic view of IT services that support business objectives.
By committing to and integrating these steps businesses can deliver can find a common ground for advancing towards overall business and IT alignment to support strategic ambitions.