In many organisations, IT is a core part of the value proposition and cost positioning.

Yet the contribution of IT to fundamental strategy is often overlooked.

IT is not a support function
IT choices are not only often a major driver of cost, but they also constrain and even determine competitive capabilities for years or decades. Tradeoffs in IT decision making simply must be informed by an understanding of the goals of the organisation, including the markets, types of customers, customer propositions and cost positioning required.

The absolutely critical component in an aligned IT and business strategy is a strong linkage between the organisational capabilities needed to realise business strategy and the tradeoffs IT will need to make to deliver those capabilities.

Linking Business Capability and IT Strategy
This linkage is important in two ways.

First, it places a burden of proof on the IT organisation to demonstrate what parts of the IT strategy will contribute to business goals and how they will do it. This enables a proper conversation with all parties on what is and is not required. Such a linkage makes it easier to draw up relevant metrics for IT performance, linked to business outcomes. It also drives the identification of IT activity which is not contributing to business goals (however well executed or well intentioned).

Second, by being explicit not only about business goals but also the IT and operational capabilities needed to deliver them, such a linkage provides a framework for decision making if circumstances change. The typical IT strategy can be no more than a twelve month budget request or a to-do list and is very brittle in the face of change; not so an IT strategy based on the principle of linkage. It is no more or less than allowing smart employees to make choices in the future with all the right information.

What I offer
What I offer is alignment of IT and business strategies by building, with my clients, the linkage between business goals, capabilities and technology. I can do this quickly, in my experience, because I focus on what’s most important.

An alignment exercise will typically involve three to six weeks of effort, including defined periods of getting input from as wide a group of business and technology stakeholders as necessary. Along the way, I help clients build a view of the value is created by their business, and a “good enough” quantitative model of how their operational and IT environment influences business outcomes. This provides the foundation for analysing what capabilities will be needed to deliver business strategy. From there, we can consider appropriate technology options, and how they relate to the current systems environment and organisation. Business goals will influence decisions on sourcing and architecture at this point.

The result is a clear pathway from business strategy to a set of technology priorities and decisions. Everyone in the organisation can understand how IT will and must deliver. This is a firm and clear basis for IT budgeting and planning activity, and provides a context for making decisions in the event of changes.