IT Governance Is Key to Alignment

Ann All

Almost everyone seems to agree that IT doesn't get the love it should from other business units. But why is that? Few people would say it's because IT willfully ignores business needs. Is it because IT hasn't aligned itself with business goals? Lack of IT/business alignment is an old and popular argument.


I've shared views from some observers who argue that rather than alignment, IT must shoot for "integration" or "fusion" with the business. Others say CIOs should focus on "harmonization" or "effectiveness" rather than alignment. But the issue is a bit more nuanced, writes Neil Ward-Dutton of MWD Advisors in UK.


The way Ward-Dutton sees it, IT is already an integral part of the business, much more so than other functional departments like finance. In most organizations, he says, "almost everyone's role is pretty intertwined with the services and technologies that the IT team enables." Managers from throughout the business seek a closer working relationship with IT, something they rarely do with other departments like finance and human resources.


But does that mean IT is aligned with the business? No. Folks are so dependent on IT for their day-to-day functions, they have trouble envisioning the bigger and more strategic picture.


It comes down to IT supply not being able to keep up with demand, a topic I discussed a while back with some smart folks from The Hackett Group. IT needs better demand management, said Hackett analyst Erik Dorr:

... The demand management phenomenon is organizations coming to the realization that, yes, there is more demand than supply. We can do things the old way and not do things simply because we never got around to it and then hope and pray that whatever we ended up not doing was the least important. But as that gap is widening, it becomes more important to have a formal process for making sure the important stuff gets done first.

This appears to be at the heart of Ward-Dutton's view as well. He writes:

Although IT outcomes are increasingly pervasive within business, IT provision has to be seen from a different perspective. Not only is IT provision not universally spread out across business teams and functions where the outcomes have impact, but it shouldn't be distributed in that way, either.

So how can organizations provision IT resources in a way that will best serve the business? Ward-Dutton suggests a centralized governance structure is the answer. (I think this is also what Dorr meant, with his reference to a "formal process" for resource allocation.)


Ward-Dutton offers four reasons why a formal IT governance program is needed:

  • The interrelationships between IT systems and business systems are generally quite complex.
  • While businesses are quite dependent on IT (how much work gets done if a core system goes down for any length of time?), the actual level of integration between IT capabilities and other areas of a business is not good.
  • For three decades the most crucial parts of IT have been software-based elements that deliver more value the more flexible they are.
  • IT doesn't get replaced very often, which leads to a kind of natural entropy that left unchecked makes progress increasingly difficult over time.


Unfortunately, establishing an IT governance program is rarely easy. I shared some great advice from O'Reilly Media CIO Jonathan Reichental and other smart folks in a post from last month.

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