Business and IT alignment drives digitisation
25 September 2019
A successful digital transformation approach is built upon the enterprise ensuring that its business and IT strategies are in perfect, complementary alignment.
Today’s businesses are faced with a mixture of challenges in the markets they operate in, including economic, social and political issues. Business thus has to remain flexible in these volatile markets to stay in business and ahead of the competition.
Information Technology (IT) is one of the core supporting elements in today’s modern business, and as such, its alignment with the business is key to the overall success of the company. This is particularly so when undertaking a digital transformation initiative. For this to be successful, your IT strategy has to be 100% aligned with the organization’s overall strategy.
According to Schalk van der Merwe, COO at Enterprise Outsourcing, the key here is for IT to be aligned with business, rather than the other way around. This is because in a digitally transforming world, IT is there to support, rather than lead, the business.
"The differences between those enterprises that have aligned their IT and business strategy and those that have not can be quite stark. Consider any company that appears to be dynamic and agile – invariably, such a business will be one where the alignment is strong. These organizations feel current, connected and one step ahead of the rest. Meanwhile, the ones who remain unaligned are finding themselves increasingly left behind," he says.
"The first step to driving the required alignment is to overcome the 'gap' between business and IT. Too often, the two areas are at odds – IT finds itself in a position where it feels business is not valuing it and thus investing in it, while the business feels that IT is costing too much and not adding enough value."
He explains that the key here is to educate both business and IT people further on each other’s specific roles within the broader company perspective. In other words, business needs to view IT as an instrument to transform and support the enterprise, while IT people need to more clearly understand the requirements of business and the frustrations that plague the business people.
"Both IT and business need to have a clear understanding of how the company makes and invests money, so all relevant parties are aware of the fact that the business does not have endless reserves of capital to invest. This also means that when it does invest, it is imperative the business sees a return on this investment."
"On the other hand, failure to achieve such alignment means the business runs the risk of losing market share, losing staff and, ultimately, losing revenue. This is because it will be slow to react to business opportunities like disposals, go-to market and new products. Once aligned however, the benefits are far greater than simply reducing risk. Having the entire organization pulling in the same direction should also drive growth, increase market share, improve profitability and boost productivity and efficiency."
If one looks back a couple of years, continues Van der Merwe, IT and business used to be oblivious of each other's existence within the business. IT could generally resolve 'IT-related' issues without the business even knowing about it. An impact on the IT department seldom had any impact on the business overall. However, he suggests, today's business world is totally different, because virtually all companies are heavily reliant on IT.
"We see that successful businesses are beginning to align IT and business into an interwoven unit, pulling in the same direction. When this happens, we expect to see businesses digitising operations more effectively and thus unlocking even deeper value from IT."
"Further, we have also seen that once this process of aligning IT and business kicks in, organizations start developing a passion to fully embrace the digital transformation journey. And it all begins with business and IT sitting down together and holding a sensible conversation around how best to undertake the transformation journey – in a manner that is fully supported and understood by both parties," he concludes.