While there's growing consensus on the significance of IT as an enabler of new business models, IT leadership in many large companies is still too reactive to business requirements, as it tries to align itself to serve the business. This "order-taking" role of the IT organisation too often puts it in a catch-up mode that demands tactical shifts based on the specific requirements of business units. We believe the only way for companies to create unique value for their customers and leverage global resources in an increasingly "flat world" is to change this passive, reactive approach to IT strategy.
In addition, new advances in technology like Web 2.0 let businesses democratise access to information both from within the company and through partners in the ecosystem.
That means IT organizations now have an opportunity to inform their business counterparts about new collaborative-business capabilities. For example, Jeffrey Neville, CIO at the $200 million Eastern Mountain Sports, has successfully implemented collaborative wikis to enhance new product development and customer relationships, as well as RSS-enabled dashboards that alert line-of-business managers to unacceptable business-process metrics. These trends underscore the need for a partnership between IT and business to achieve what we call dynamic synchronization of their respective strategies. That will create a capacity for companies to evolve their business models to new paradigms of competition and innovation.
So why isn't this being done? Two major obstacles discourage IT from proactively partnering with business: legacy IT infrastructure and divergent goals. While the emergence of service-oriented architecture (SOA) and components-based frameworks make it easier to tackle the first problem, the second remains elusive to many. How much more different can the goals be? The mandate for business is to innovate and increase revenue, while that of IT is often about efficiency and cost reduction. We believe the efficiency goals of IT are necessary but not sufficient.
IT doesn't exist merely to facilitate the execution of business processes; it must provide a flexible infrastructure so the company can innovate in business models that map to strategic goals. At times, IT may also inform business managers about new possibilities to lead business-process innovation. The recognition of IT's operational and strategic role is a first step toward achieving dynamic synchronization with the business. The aim is to move beyond the current norm where IT simply plays catch-up and start improving process efficiencies.
SOA and Web services make it possible for companies to build true plug-and-play or "Velcro" business processes that promote the evolution of business models through flexible customer and supplier/partner connections. Without a proper governance mechanism, however, the flexibility provided through these new capabilities could be overused, leading to information overload for business-unit managers and unnecessary complexity in business processes.
A proper governance framework advances the dynamic-synchronization agenda through platforms like SOA. An important part of this agenda is empowering the enterprise to synchronize with changes in the business environment.
An appropriate governance framework should also create mechanisms for both business and IT to create partnerships at all levels. Business and IT must take measures to ensure that a shared agenda can evolve over time.
Moving beyond IT alignment
By Staff Writers on Apr 2, 2007 3:34PM