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chapter
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Architecture, Portfolio Management, Organizational Development Integrated Foundations for Strategy Realization
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by anthony hill
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It is the goal of every good CIO to align IT strategy to business strategy.
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No rational businessperson today would argue this premise. However, this simple premise is harder to achieve than is readily apparent. What IT needs to build and deliver to achieve the goals of business strategy can be difficult to identify, and highly debatable depending on one s point of view within the enterprise. IT systems can be abstract, complex, and difficult to understand. Business processes, enabled by systems, can suffer from the same challenge. An enterprise will have a collection of systems created by different people at different times under different sets of information, constraints, and decisions. Parochial interests of different business units, departments, and key managers can also confound the issue. It is no wonder that an organization can sometimes feel that its IT systems, processes, and people are not in synch with its current strategy and goals. The CIO, IT staff, and other business leaders and staff need to be able to see and understand alignment between IT and business strategy. They need
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integrated foundations
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to be able to understand the elements that create alignment and understand their relationship and contribution to those elements. And, based on this understanding, they need to become the champions of the correct behaviors and processes that lead an organization to its alignment and strategy realization goals. The CIO faces an intimidating task aligning an IT organization and a steady stream of large, complex, and risky IT investments to the constantly evolving and adapting business strategies of an organization. Many CIOs have found this goal elusive and difficult to achieve and behaviors and expectations in other parts of the organization often exacerbate the problem. What is needed is a set of guiding principles, processes, maps, guideposts, and milestones that communicate and align IT to the business strategies, which guide both IT and the business. Once business strategy is set, the challenge becomes how to go about aligning IT strategy with business strategy, and doing it in terms that can guide and manage expectations for both the business and IT. This multifaceted challenge requires many disciplines and practices to achieve. There is no one single construct or technique that enables this alignment. Organizational decisions and behaviors need to support and lead to alignment, and this is not a natural process for most organizations. Achieving alignment means choosing the right IT investments, building them the right way and implementing them at the right times to achieve the enterprise synergy and business goals being sought. The ability to actually execute and deliver the initiatives is the difference between success and failure. And, the different systems and processes created need to integrate and create a whole that is greater than the sum of the parts. CIOs have several fundamental, interrelated, and often poorly understood disciplines at their disposal to align IT strategy to the business strategy. Enterprise architecture, IT governance and portfolio management, and organizational development constitute the primary set of practices that enable the CIO to achieve alignment in a constantly changing business environment. The tools and techniques in these three primary practice sets revolve around three long-standing core concepts well known in the systems development disciplines, and which have parallels when one seeks to build and enable an enterprise. People, process, and technology have stood the test of time as the fundamental, necessary components of successful business
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integrated foundations
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solutions. As technology becomes more ubiquitous and as technologies continue to commoditize, emphasis has evolved toward people and processes as the focal areas for gleaning return on investment and competitive advantage from IT investments. Successful CIOs necessarily train their sights on the business and enterprise level and keep their perspective focused on this horizon. The CIO needs to be squarely focused on strategic business goals and enabling and aligning IT to reach those goals. Bringing the focus on people, process, and technology up from the systems/project level and applying it to enterpriselevel IT and business alignment gives the CIO a focal point for IT alignment and the realization of business strategy. People, process, and technology manifest themselves at the enterprise level as IT organizational development and delivery model (people), IT governance and portfolio management (process), and enterprise architecture (technology and related business process). The disciplines in these three primary practice areas become the focus for CIOs entrusted to lead IT and enable business strategy, focus on the customer, and make their organization more competitive in the marketplace. CEOs often state that what they most want from their CIO is the ability to achieve this alignment. In other words, what the CEO wants most is the CIO who can lead IT to achieve the realization of business strategy. The realization of business strategy takes place over long, multi-year periods of time. This is especially true when the strategic goals include profound change or new business models. CIOs who lead by facilitating and enabling these long-term strategies use methods and approaches that endure the challenges and environmental threats posed by long-term change, and that outlast an all too common short-term view on specific projects, implementations, and tactics. The CIO s methods must accommodate key personnel turnover, changing and competing business and technology priorities, business environment changes, and the need for ever-increasing business agility and flexibility. At the same time, the CIOs must articulate the strategic implications of IT methods so that people at all levels of the business understand how the IT architecture supports their strategic decision making and guides the organization to its stated objectives. This chapter is written for the IT leader who seeks to concretely and comprehensively support the realization of business strategy through
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