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IT and Business : Alignment or Convergence ?
Faisal Hoque turns IT-Business alignment on it's head when he says "Alignment is the lowest and most passive stage; at the alignment stage, IT plays a support role; IT is always trying to catch up with what the business wants to do. Synchronization is the next stage. IT plays more of an active role by influencing how the business should operate: how the company goes to market, manages its supply chain or improves efficiency, or introduces a new product. The highest stage of maturity is convergence. Here IT and business are the same; there's no distinction between the two." He goes on to add that "The most critical thing we've learned in creating these three categories is that alignment is a reflection of management maturity."
I don't quite agree that alignment in itself is limiting or fundamentally flawed or that convergence is the absolute nirvana. Ultimately, whatever be the relationship it needs to maximize or help shareholder value. Businesses first need to define the ideal relationship between IT and business given the unique context of the environment in which they operate. How does one determine this ideal ? To frame the problem more closely let us narrow the context. For argument sake, assume that the biggest value driver in a given business (say the Soft drinks business) happens to be branding.
Note: We define 'biggest value driver' to be the value driver that delivers the highest shareholder value for a dollar spent on that value driver.
We all agree that ad campaigns are a big and successful branding driver in the soft drinks business. Anyone who disagrees only needs to watch TV for a day or better still, check out Coca Cola's ad spend for the year 2000. In case you are lazy or like this article too much (he he )to click out it was $2 billion.
Advertising campaigns : One of the ways IT can be used to support ad campaigns is through campaign management software. Here's one definition I managed to dig out: "A type of marketing automation software that optimizes the process for organizations to develop and deploy multiple-channel marketing campaigns to target groups or individuals and track the effect of those campaigns, by customer segment, over time." IT is optimizing business processes, tracking and monitoring the results. Seems like IT is adding value by supporting the business, 'aligning' rather than 'converging'. The value adding branding processes are clearly distinct from IT itself. I do not mean that it is impossible to have an IT solution that 'converges' with branding business processes, but clearly the right approach is contextual.
If we step back and look at the bigger picture of IT investments in general, they are of three types a). Keep the fires burning type maintenance work b). Keep the IT aligned with changing business needs -enhancements etc c). Transformational initiatives that are strategic and designed to take the business to a different plane altogether. If convergence has a chance it is only in bucket (c) and we know bucket (c) type work has a high failure rate.
I also believe that alignment > synchronization > convergence is a maturity continuum of increasing difficulty. Many organizations spend a good portion of their budgets chasing alignment and fall woefully short. What chance does convergence have then ? Talk of flying when you can't even crawl. Convergence can wait. We have a long way to go before we can converge! Innovation IT strategy
I don't quite agree that alignment in itself is limiting or fundamentally flawed or that convergence is the absolute nirvana. Ultimately, whatever be the relationship it needs to maximize or help shareholder value. Businesses first need to define the ideal relationship between IT and business given the unique context of the environment in which they operate. How does one determine this ideal ? To frame the problem more closely let us narrow the context. For argument sake, assume that the biggest value driver in a given business (say the Soft drinks business) happens to be branding.
Note: We define 'biggest value driver' to be the value driver that delivers the highest shareholder value for a dollar spent on that value driver.
We all agree that ad campaigns are a big and successful branding driver in the soft drinks business. Anyone who disagrees only needs to watch TV for a day or better still, check out Coca Cola's ad spend for the year 2000. In case you are lazy or like this article too much (he he )to click out it was $2 billion.
Advertising campaigns : One of the ways IT can be used to support ad campaigns is through campaign management software. Here's one definition I managed to dig out: "A type of marketing automation software that optimizes the process for organizations to develop and deploy multiple-channel marketing campaigns to target groups or individuals and track the effect of those campaigns, by customer segment, over time." IT is optimizing business processes, tracking and monitoring the results. Seems like IT is adding value by supporting the business, 'aligning' rather than 'converging'. The value adding branding processes are clearly distinct from IT itself. I do not mean that it is impossible to have an IT solution that 'converges' with branding business processes, but clearly the right approach is contextual.
If we step back and look at the bigger picture of IT investments in general, they are of three types a). Keep the fires burning type maintenance work b). Keep the IT aligned with changing business needs -enhancements etc c). Transformational initiatives that are strategic and designed to take the business to a different plane altogether. If convergence has a chance it is only in bucket (c) and we know bucket (c) type work has a high failure rate.
I also believe that alignment > synchronization > convergence is a maturity continuum of increasing difficulty. Many organizations spend a good portion of their budgets chasing alignment and fall woefully short. What chance does convergence have then ? Talk of flying when you can't even crawl. Convergence can wait. We have a long way to go before we can converge! Innovation IT strategy
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