As most know, my IT soapbox has “business-driven” emblazoned on all sides. By business-driven, I’m referring to an IT organization’s imperative – to deliver business value.  In this vein, I talk about (harp on) numerous topics including business-focused technology innovation, business-driven architecture, IT gaining business-smarts, and more recently business-IT integration.

I started to use the term 'business-IT integration', because I’m thinking beyond traditional business-IT alignment. Alignment refers to the review and reconciliation of independent activities, in this context the reconciliation of business strategy and plans with IT strategy, architecture and plans.

For business to reap the true value of IT, business and IT must collaborate on the development of strategy, architecture and plans. This collaboration, which should continue through delivery and operations, is business-IT integration. In order to have an integrated environment, business and IT professionals must be more conversant in the other’s discipline. Historically, IT has put this learning burden on the business, but it’s time for IT professionals to 'get business'.

If you bear with me for a moment more, I’d say that business-IT integration will naturally evolve to a business-IT fusion of sorts, at least in the strategy and innovation arenas, but now I’ve gone well beyond the intent of my post…

My intent was to amplify a key message from a MIT Sloan Article on Avoiding the Alignment Trap in IT.  The authors, from Bain & Company, share their “growing realization … that the usual diagnoses of IT’s troubles – and the usual prescriptions for fixing those troubles – are often misguided”. In particular, they call out companies “seeking to deliver higher business value performance by harnessing IT have focused on alignment… the degree to which the IT group understands the priorities of the business and expends its resources, pursues projects and provides information consistent with them”.

The authors believe the following is true "A lack of alignment can doom IT either to irrelevance or to failure”. However, they raise an important flag that every IT leader should take to heart “a narrow focus on alignment reflects a fundamental misconception about the nature of IT. Underperforming capabilities are often rooted not just in misalignment but in the complexity of systems, applications and other infrastructure.”

They go on to describe situations in which business alignment run amok actually drives up IT complexity – silo-ed data centers, customized packaged applications, bolting on legacy applications, lack of standards and shared infrastructure – therefore driving down IT performance.

The authors quote Richard F. Connell, senior executive vice president and CIO of Selective Insurance Group “Aligning a poorly performing IT organization to the right business objectives still won’t get the objectives accomplished”. That, the authors say “is the alignment trap”.

For those in the alignment trap, the authors recommend a return to basics “temporarily focusing on effectiveness at the expense of alignment”. And of course, effectiveness requires simplification. Quoting Leonardo da Vinci, the authors remind us “Simplicity is the ultimate sophistication”.

The article has good insights on diagnosing IT pain and shares company anecdotes. If you have access to MIT Sloan Review, I recommend reading the article.

As for the big takeaway – in pursuing business-driven IT, don’t lose sight of the fundamentals, effectiveness, simplicity (to the degree possible), and constant communication. Host cross project/initiative forums with key players (project managers, architects and business analysts). Open lines of communication and collaboration to help your organization “balance well the needs of the entire organization with those of individual businesses”. And always, beware the alignment trap!

Posted by brendamichelson in Business-IT Integration • business driven architecture | Permalink | Comments (0) | TrackBacks (0)

Continuing on my business-IT integration theme, I want to share some excerpts from a BusinessWeek article, entitled IT's Star Turn.  I found the article via Ben Worthen's BizTech blog.  The article, written by Jeneanne Rae of Peer Insight talks about the importance, and yet dearth, of IT participation in corporate innovation.  Following the excerpts, I have a few questions.  The emphasis is mine.

First, the opportunity: the shift to a services economy, the innovation edge, and the tie to information technology:

"The fundamental shift of the U.S. economy from one based on industry to one based on services has been covered in this column and elsewhere. While some companies—and indeed industries—still resist the trend, the innovators have recognized that the production of value lies in the creation of services, and have adapted accordingly.

Even product-based companies have shifted their focus from the production of physical goods to the delivery of device-enabled services products. But here's the related innovation trend that no one is talking about: Increasingly, those services are being driven by scalable technologies. The information technology departments once seen as back-room cost centers are becoming key players in the execution of innovation, and hence, the creation of value in the new marketplace."

Next, the absence of information technology personnel in the innovation discussion:

"Where is IT in the innovation conversation? With IT being so essential to the innovation equation, and with so much riding on the IT department's ability to build and maintain the systems that will drive customer delight, you'd think there would be more talk about the role of IT in innovation strategy.

But let me ask, how engaged are chief information officers in innovation initiatives? Are members of your IT department full-time members of innovation project teams? Or do they exhibit a "call me when you need me" approach? Or worse still, a "Put your request in the queue, I'll get to it when I can" attitude?

Based on my research, the majority of IT departments sit on the sidelines of innovation discussions when they should be central players. Systems consultants as well as corporate representatives say that, typically, IT departments are tactical rather than strategic, reactive rather that proactive, and isolated rather than integrated. Few in the IT ranks speak "business model," which is unfortunate given that so much customer and shareholder value is dependent on IT solutions to facilitate critical network connections.

...many corporate innovation executives I know no longer consult their IT departments. Despite the risk of exposing new business strategies to potentially untrustworthy third parties during the "fuzzy front end" stage, they simply go outside. "You get tired of hearing, 'no, we can't do that' all the time," said one practitioner at a Peer Insight forum recently."

Lastly, a prescription, or continuation of the Business-IT Integration theme:

"In order to support the robust innovation pipelines that many corporations aim to build, we have to rethink how we integrate IT into our organizations, particularly as it relates to driving innovation. Start with the IT leadership team, where more executive bench strength will be needed. IT managers should be well-versed on managing cross-functional initiatives, and should understand the company's business end-to-end. These managers will need to guide innovation teams in regular technology road mapping and system architecting sessions. Interaction design and rapid prototyping of customer touchpoints will be the standard, not the exception. Iteration and user testing of new software concepts will be a core capability. Likewise, IT must be engaged and mentored by business managers as the opportunities to learn and collaborate go both ways."

Questions:

1. How does IT participate in Innovation at your company?  Are IT personnel at the Innovation table?  If so, which roles?  CIO, CTO, Chief Architect, Business Relationship Manager, other?

2. Are technology capabilities/advancements input to Business Innovation Ideation?  (how's that for a management buzzword?)

3. How integrated are business and IT at your company? 

(a) IT is an order taker

(b) IT aligns with business (IT takes and supports business lead)

(c) IT and Business are integrated: collaborate on Innovation, Strategy, Architecture and/or Portfolio Planning?

Posted by brendamichelson in Business-IT Integration • business • business driven architecture • leadership | Permalink | Comments (0) | TrackBacks (0)

Last week, at BPM Think Tank I shared some of the SOA Consortium (and my) views on the complementary relationship of BPM and SOA. I purposely kept the conversation away from technology and standards. Instead, I focused on the changing role of IT (value generation), the problems BPM and SOA solve (instantiating business scenarios which are comprised of processes, activities, services and events), the changing role of enterprise architecture (business architecture as first class citizen), the importance of business and IT collaboration on enterprise strategy and enterprise architecture, and the need for IT professionals, particularly architects, to gain business smarts.

On Monday, I read an article in the online WSJ, What's Next for IT, that echoed many of these themes, and provided some additional insights into the question Phil Gilbert posed "How are organizations injecting business smarts into IT professionals?"

The article is an excerpt of an interview between WSJ editor Francesca Donner and three CIO's -- Meg McCarthy of Aetna Inc., Frank Modruson of Accenture Ltd. and Steve Squeri of American Express Co.

While the entire article is worth the read, I wanted to excerpt some of the excerpt, particulary on the topics I mentioned above. My categorization has caused some selections to be ordered differently than the article.

On the changing role of IT: "Strategic" and "At the Table"

THE WALL STREET JOURNAL: Analysts have written that IT departments are becoming more strategy- and business-oriented. Do you agree?

MS. MCCARTHY: I totally agree. At Aetna, the IT organization is critical to enabling the implementation of our business strategy. I report to the chairman of our company and I am a member of the executive committee. In that capacity, I participate in all of the key business conversations/decisions that impact the company strategy and the technology strategy.

MR. SQUERI: I believe that over the next 10 years, the CIO will get more involved in the overall business strategy of the company and see their role expand in importance. The CIO will be increasingly called upon not only to translate business strategies into capabilities but to become even more forward-looking to determine what capabilities the business will need in the future.

The days of tech leaders as relationship managers and "order takers" will go by the wayside and they will be called upon to create and drive technology strategies that drive business capabilities.

On bridging the Business-IT divide... "Business-IT Integration" (my term)

MR. SQUERI: I agree that technology organizations are getting closer to the business. It's a must.

This doesn't happen overnight, though. We need to help the business better understand technology. We need to help our technology employees better understand the business strategies.

One way we are doing this is by moving people across the organization, from the business to tech and vice versa. Alignment with our senior leaders helps build the connection at all levels within the organization -- we're all at the table together.

MS. MCCARTHY: Steve's note is very consistent with some of the strategies we are employing [at Aetna] to bring greater alignment with our business partners.

Transitioning people from the business into IT and rotating IT people to the business brings a greater understanding to the broader organization.

MR. SQUERI: For businesses that leverage information or use technology as a competitive advantage, it is important that business leaders know how to leverage the technology groups to enable their strategies. This means that just as technology groups are learning to translate business strategies into technology capabilities, business leaders will have to think about their strategies in terms of long-term capabilities.

The only way that can really take place is by deepening the working relationship and ensuring that IT has a seat at the table.

MS. MCCARTHY: Our current CEO and chairman has a technology background which has been invaluable to our business at Aetna. He encourages all our non-IT leaders to have a good working understanding of technology and to understand the systems that enable their business areas. He also has the business leaders report on all the "systems" projects/programs for their business areas -- a recognition that this work is not just systems work but business and systems work.

I would encourage all non-IT managers to get an orientation to their systems organization. I would also encourage non-IT leaders to spend time with their IT partners, particularly the architecture team during their strategic planning process. Have the architecture team look out three years and identify technologies that could be applied to the business to improve productivity or increase revenue. Working together on these things can generate creativity on both sides.

On SOA, Service Definition and Business Process, "Bi-directional Business-IT Understanding"

MS. MCCARTHY: ...The other important aspect associated with Steve's comment and his business background is the focus that most of us have on building a services-oriented architecture.

The analogy that I'll use here is Legos. In a services architecture, we build discrete services that are individually tested and certified, versus a more traditional programming method. These services can be used and reused very efficiently, i.e., the Lego concept of taking Legos apart and reusing them to build something new. The promise of this approach is significantly reduced costs and speed to market. The ability of the IT organization to do this work efficiently is a function of how well we work with our business partners to define our business processes at the right level...

... The big challenges for most companies will be the continued work on building an adaptable architecture that provides for seamless interoperability with other companies, i.e., ease of communications and transaction processing with business partners and customers.

The CIO in this work will be an important strategic partner who can educate and vision with their business partners. [As CIOs] we need to understand the business, the technologies that are evolving and work closely with our business partners to identify opportunities for the company and our customers to exploit these technologies to achieve market leadership and competitive advantage.

On Next Generation Technology Leaders:

MR. SQUERI: I believe that finding the right talent is a key priority and challenge we're facing.

We all talked about the need to align technology and business strategies. Part of getting there is bringing in and developing people with technical, business and management skills. Our technology leaders need all of these skills to be successful and make our businesses successful.

Posted by brendamichelson in BPM • Business-IT Integration • SOA • business • enterprise architecture • general IT • leadership | Permalink | Comments (0) | TrackBacks (0)