Aligning IT with the Business Vision
Just like the business vision leading other functional areas such as marketing and finance, IT must follow the overall business vision and goals of the enterprise. The business vision must lead IT, instead of IT leading the business vision. This was a key lesson learned during the technology bust of the late 1990s. The advent of the Internet created a lot of false expectations among businesses that technology could change the world without the business problems being realized first. The survivors of the technology bust were the ones who did due diligence to identify the business problems first and then capitalize on the strengths of the Internet technology.
A functional organizational structure may not always be optimal for an enterprise; the structural need may be dependent on the organizational dynamics. However, the IT department, like other functional areas such as marketing and human resources, has to be functionally aligned with the overarching business goals and vision (see Figure 1). If IT is aligned with the business vision, then it's more likely that each IT unit understands the vision and works toward achieving that vision. It's also more likely that employees in each IT unit see the bigger picture while working on smaller components. Unless an IT organization gains efficiency in aligning itself with the business vision, IT workers may not be fully effective in solving business problems.
The IT ecosystem comprises many IT entities coming together to provide IT solutions to the enterprise. Vendors, consultants, partners, and employees are required to work together in teams and projects. Each of these players comes from their respective employers with their own business visions. For example, a vendor's business vision could be to maximize the sale of their products. A consultancy's business vision could be to provide optimal IT services. How do these multiple visions work for multiple players in a team or a project? The business vision of the principal (the one receiving services) must always overarch the business visions of the agents (the ones providing services). Nicholas Carr goes on to say in his Harvard Business Review article that "IT is driven by vendors' strategies. If vendors balk, companies should be willing to explore alternatives." The principal should always be the primary beneficiary of an IT project.
Aligning an IT organization toward the enterprise's business vision also requires strong IT leadership. IT leadership has never been as important as it is today, and its value will grow as businesses continue to grow. The IT leadership becomes challenging when the IT ecosystemand, for that matter, the business ecosystembecomes more complex. It takes an effective leader to fulfill complex business needs by leading IT effectively. An IT manager has to be able to maximize the business value of an IT solution for a given business problem. The IT solution should make sense not only from a technology perspective, but from the business perspective. It must reap positive return on investment. It must maximize the value of the firm. The economic valuation of IT is a challenging task and only limited standards are available. When the success rate is evaluated by the economic value, today's IT leaders have to be intelligent and articulate in translating IT outputs in economic terms.