The path to Strategic Alignment

20 Oct

Much of the hand-wringing and navel gazing surrounding Business-I.T. alignment often neglects to look at the most basic component of a firm- its employees.

The failure of IT-Business projects is often attributed to an “execution gap” -the costs of misaligned projects and goals overrun costs, missed deadlines and ultimately project fragmentation often results from the lack of  understanding which the IT group understands the priorities of the business.

Given that the consequences are so severe then why don’t companies pay more attention to it? In a work by Shpilberg et al. (2007) for the Sloan Management Review, three-quarters of respondents found their I.T.  systems misaligned or stuck in the “maintenance zone”. He goes on to state;

IT at these companies is generally underperforming, undervalued, and kept largely separate from a company’s core business functions.”

Perhaps because firms are looking for an I.T. solution when a H.R. one is key.

Michael Neven (2004) writing in the H.B.R. believes the key for alignment growth lies not in approaching I.T. in isolation but part of a much broader investment in staff training, process reengineering and organizational restructuring etc. Any investing in I.T. must be matched by training in employees so as to maximize alignment.

From my readings a reoccuring issue is managers inability to measure strategic proccess of alignment. The Balanced Scorecard approach developed by Professor Robert Kaplan is designed to negate such issues. The scorecards not only provides metrices for the sometimes intangible assets I.T. systems provide but also a “marching orders” format to help planners identify areas of improvement. As Kaplan and Norton themselves describe the balanced scorecard as “evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.”

By following this approach firms have slashed costs and improve services.

Not enough of the strategic blogger? Follow him on twitter @ Thstrategcblog

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2 Responses to “The path to Strategic Alignment”

  1. cmcoughlan October 23, 2012 at 6:57 pm #

    Good blog ‘thestrategicblogger’! I totally agree that in some situations where IT projects have failed the company may indeed be at fault by failing to align the IT functions with other business funtions. As you mention in your blog any new investments in I.T. must be matched by training in employees to ensure the new systems bring value to the company. It’s not much good to buy the latest systems and software if employees are unable to use it properly! Company’s need to realise that an IT solution alone will not solve their problems!

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