The Yin-Yang of Aligning (digital) Business and IT Models
Yin-Yang is a fundamental concept in Chinese philosophy where seemingly opposite or contrary forces are interconnected and interdependent on each other.
These forces complement each other as they interrelate. The interaction between Yin and Yang establishes harmony as well as a needed balance.
One activity that all digital businesses must be good at in order to succeed, is aligning their information technology (Yin) with the business (Yang), to ensure that organizational objectives can be achieved.
This needs to be delivered in a dynamic manner given that the business environment is experiencing tremendous change and is continually in a state of flux.
The move to digitalization is itself one of the most significant and continual changes that the business must adapt to, but there are lots of others. The pressures and ongoing requirement for technological change have led to a need for new collaboration and alignment models, so that the business can respond effectively.
Given the increasing pressures of digitization on the business, alignment between it and IT is essential. It is important to take a strategic approach towards planning IT so that business imperatives can be met.
One theme of alignment models to support digital which arises repeatedly is that of agility. The days of IT strategic plans spanning several years are over. IT must be able to respond quickly to meet business needs as they evolve over time. This means being able to quickly deploy new technology to allow the organization to take advantage of opportunities. The old model through which IT and the business worked together does not allow this to be achieved.
Old Models of Business and IT Alignment
The traditional sense of collaboration between the business and IT was one where the business required support from IT to install technology which would support business processes. The business told IT what it needed.
Following this, IT would gather business requirements and produce a solution that hopefully met those needs. While this worked for decades in the past, it is no longer sufficient to meet business needs.
The old model does not recognize that technology now has a massive influence over the directions the business can take, and the opportunities it brings for change for the better for the organization.
The Internet of Things (IoT) and Artificial Intelligence (AI) bring considerable opportunities for many businesses, but without IT taking a strategic role, the business is unlikely to recognize the importance of these or benefit from them in the ways that it could.
Technology professionals are better placed to be ahead of the game and to help the business identify possible opportunities that could be brought about from leveraging new technologies.
Strategic IT Planning, Digital Business Strategies and Pervasive Models
The new approach for business and IT alignment recognizes that IT is no longer simply responsible for putting in place technology that will support business processes. Rather, technology is a driver of the business and shapes its future directions. Under the new model, business strategy and IT strategy are closely interlinked and aligned. In addition, internal and external drivers for change are considered and addressed.
There are two possible ways for collaboration to come about. This can either be IT driven, where IT strategy leads to the development of the organizational infrastructure or, it may be business driven, with the business strategy helping to define the IT infrastructure. Either way, for the alignment to work best it will be two-way, so that organizations can fully leverage the opportunities brought about by digital and other emerging technologies.
New models of alignment and collaboration between the business and IT no longer view the IT function as just a cost centre, or as an asset for raising efficiency. Rather, these models embrace IT as a force that can contribute to the overall value proposition, and as an enabler or shaper of exciting new business models. This transforms IT from taking an operational role to a strategic one within the organization.
Most analysts in the IT sector recognize and advocate the need for strategic IT planning. I too also advocate this with all clients. My observation of working with a wide range of customers is that those companies that do not put in place strategic IT planning are less likely to be competitive. This means they are more likely to fail.
These studies have shown specifically that strategic alignment between IT and the business is also linked to a lack of ability to develop an effective digitization strategy.
New forms of alignment and collaboration between IT and the digital business need to recognize that change is ongoing and that this situation is permanent.
This leads naturally to the development of digital business strategies, which arguably go beyond simple alignment between IT and the business. Rather, some research analysts have argued for business and IT strategies that become one and the same thing, working in synergy and cohesively.
This approach to collaboration and alignment between IT and the business enables a proactive approach. Such a methodology allows the business to decide what the future will be and bring it about, drawing on technological development to deliver this destiny. This has already been observed with technology acting as a disruptive driver for industry change in many sectors. Experts refer to this as the “pervasive model”.
The pervasive model is one whereby IT delivers the technological infrastructure, and the business is able to utilize it to meet its needs. Under this type of working arrangement there is a very close relationship between IT and the business. Since IT knows which technologies may be of benefit to the business through its close relationship with the same, it can deliver new technology into the infrastructure. This model is believed by some to be the most effective for anticipating business needs, implementing and supporting the organization and driving disruptive change.
What IT Needs to be Enabled to Do
To allow the business to reap the full range of rewards that technology can bring, IT needs to be enabled to drive change. The close working relationship between IT and the business needs to identify the new technology that could benefit the business and explore how this could add value for the organization. As part of the model, it must be able to implement new technologies into the infrastructure. Further, IT needs to be in a position to continually evaluate the infrastructure. This position both IT and the business to ensure that technologies that are becoming obsolete are replaced before this occurs, and that innovative new technologies are built in instead.
The Benefits of a Strategic IT Plan and Cohesive Alignment Between IT and the Business
It is important to understand the benefits these new ways of working bring about. The overarching benefit of a strategic IT plan which has been developed with a view of helping the business achieve its goals, is that these targets are more likely to be reached. (The act of creating a goal, makes you more likely to achieve the goal)
This is because IT and the business work together to ensure that IT understands the strategic imperatives and is set up to help the organization achieve them. Overall, this leaves the business in a much better position to be able to gain competitive advantage, or to become a first mover with technology in its industry. And once in this position, with the right types of collaboration and alignment in place with IT, it is much easier to stay ahead than playing catch up all the time.
Another important benefit is also that both IT and the business are better able to set priorities for digitization when working together. Research has shown that organizations that do not work towards developing new ways of working like this have been found to not prioritize as effectively. It allows organizations to move forward in new directions, benefiting from the ability to quickly deploy technology that enables cloud computing, mobility, personalization, big data, IoT and AI. Without developing an approach such as that highlighted above, the business may struggle to be sufficiently agile to take advantage of these types of innovations and developments.
In the brave new world that businesses find themselves in, being able to leverage technology rapidly and effectively for digitization and other purposes is essential to achieving and maintaining competitive advantage.
This means that businesses need to work closer with IT departments than ever before. It is no longer enough for IT to simply provide the infrastructure at the behest of the business. Rather, the two need to work closely together proactively, to ensure that the organization is equipped to take advantage of new technologies and drive disruptive change in its industry. This allows businesses to get ahead of their competitors, but it requires recognition that IT is an integral factor in achieving business success.