January 30, 2015 – Floris de Bruin and Rutger Peters &samhoud consultancy
The world we know is changing at a rapidly increasing pace. The importance of technology for business knows no bounds. As last year’s opportunities turn into today’s threats, catching up seems unlikely for many organisations. Struggling with the legacy of years of neglect, many C-level executives face the fact that business and IT remain two separate worlds with their own culture and language. Being able to leverage technology is essential for successfully navigating todays’ competitive landscape. &samhoud has a rich track record of working on the faultline between business and IT. Our unique approach towards the issue is tailored around the persistent blind spot that surrounds it. Over dinner at &samhoud places we discussed the theme with Business-IT Alignment-guru and former CIO at IBM, Dr. Jerry Luftman.
The new cool collective
“Running IT isn’t hard”, Jerry mentions, “it’s about making sure the lights are on and the water is running. But to be successful in generating revenue with IT in today’s dynamic environments demands IT to really understand the business, the industry and how to apply technology. While business needs to understand the capabilities of IT and their role in ensuring how to effectively leverage it”. For over four decades this remains a consistent and pervasive worry for C-level executives around the world. Since we experience more changes in business and technology right now than ever before, the momentum of the issue is rapidly increasing. No matter what industry you are in; having a nose for arising opportunities and circumventing problems is not enough. When you know where to spot the ‘golden nuggets’ but fail to understand the complexity of their implications for IT you will never fully reap its rewards. In fact, research demonstrates that businesses that enjoy a closer relationship with their IT counterparts outperform their competitors. Getting both parties to become sensitive to- and aware of what their role must be is essential. But the real key to progress lies with business managers coming to terms with the reality that geeky is the new cool and the future is with the tech-savvy.
IT driven business pays
Alignment, partnership or connection – Jerry does not like to go into semantics – revolves around the level of collaboration between business and IT. Within the exemplary cases of technology driven companies, such as Google, eBay or Amazon, Jerry states: ‘IT truly ís the business’. What many might not realize though, is that this trend holds serious implications for all organisations and will resonate through to the darkest corners of your back-office. Fortunately Jerry’s research shows that it is possible to make a significant leap in IT-Business alignment in a relatively short time-span, even for large firms that perhaps suffer most from the issue. Jerry adds: “While we have assessed organisations of every size, we’ve been able to study about one-third of the global 1.000 companies and do a correlation between how well organisations do vis-à-vis the maturity of IT-business alignment and how well they perform against their competitors. We found clear evidence that organisations that have a more mature IT-business alignment relationship outperform their competitors”.
It is the ‘soft’ stuff that delivers the hard blows
There are lots of opportunities to improve, Jerry argues, “and it’s a shame, because too often organisations are repeating the mistakes of the past”. Nurturing a collaborative, successful environment that enables business and IT to sustain a mature relationship revolves around six dimensions. No silver bullet exists, so raising alignment maturity requires a balanced improvement on all six dimensions. However, organisations are often much more comfortable focusing their improvement initiatives on the visible ‘hard’ dimensions such as technology/architecture and governance. While they ignore the less visible, perhaps ‘soft’ stuff, Jerry states. “IT-people are typically less comfortable with these soft areas that are clearly equally important for success”. The typical solution is to formalize the relationships with processes, structures and documents that result in reduced flexibility, a limited exchange of ideas and an overall emphasis on the extant faultline between both entities. Addressing this blind spot through a holistic change approach requires ongoing harmonized effort to improve the relationship. Both parties have to learn to work together, learn to speak the same language, share the same values and objectives and leverage each other. We are going through a major transition and the companies that get this first are the ones that are really going to cross their competitors.
Change or die trying
Over the next ten years we expect to see more and more examples of organisations that are really making a difference in leveraging IT. However, technology remains to move at a faster pace than most businesses can catch up. We are still negotiating the implications of big data, social media, business analytics and cloud computing while the next technologies are gearing up to take the spotlight. The skills that are needed to be successful in this world, today and in the next ten years are completely different from the skills most people currently have. IT and business need to team-up to face these challenges and develop a deeper connection in order to survive and thrive in the upcoming decade. These are exciting times and there is so much potential, Jerry adds passionately: “I mean, any of these things would drive an executive crazy. But essentially, this is a neat time. You can’t just wait and let things happen to you. You’ve got to make things happen for you. That’s what makes the difference. Cherish these challenges. The people who have that passion for accepting and responding effectively to these changes, they’re the ones who can make that difference”.
For reactions or inquiries related to this article please contact Floris de Bruin: +316 13 07 36 99, email@example.com