Ivan JuretaSenior Researcher, Fonds de la Recherche Scientifique - FNRSAssociate Professor, Department of Business Administration, University of Namurivan.jureta@unamur.be

Business & IT alignment in practice: Cases, problems, solutions

Preliminaries

Business & IT alignment is not only about code quality

(But code quality is necessary for alignment.)

Image credits: Unknown. Found via Google Image search.

Business & IT alignment is not only about infrastructure quality

(But infrastructure quality is necessary for alignment.)

Image credits: Getty Images/Rainier Ehrhardt.

Business & IT alignment is not only about generating business value.

(But we do it to produce value.)

Image credits: AMC.

What is it about, then?

Here's an anecdote about Tom Kristensen and his engineers.(Btw, he won 24 Hours of Le Mans nine times.)

Image credits: Politiken.dk / Linda Johansen.

Rough overview

1. Case problems2. Business & IT alignment3. Case A: Conservative alignment4. Case B: Progressive alignment5. Case C: Extreme alignment6. Lessons learned

CASE A: Telco software maker

Company A:- Makes and sells B2C IT software to telecoms- 100+ employees; big part are engineers- 7 years old

CEO observed these issues:- Final products do not satisfy approved product designs- Product development schedules are missed- Product quality is lower than desired

How do you solve this?

CASE B: Personalized triathlon training

Company B:- Sells personalized Ironman/triathlon training to top managers- 2 years old

Owner wants to:- Grow the business faster- Increase the number of athletes per coach

How do you solve this?

CASE C: Running startup

Company C:- Wants to offer highly personalized running training to everyone- 0 years old- Important backers

Owner wants to:- Grow the business faster- Increase the number of athletes per coach

How do you solve this?

All three cases are very much related to the topic of Business & IT alignment.

To see how, I'll first go back to basics of Business & IT alignment.

Business & IT alignment:

- It is used to remind that IT and business have a complicated relationship

- It is about making sure that IT:- serves the needs of the business, and- produces opportunities for:

- revenue increase- cost reduction

Complicated relationship? (1/4)

IT always looked like it has high potential for improving business.

But it was never clear how much, in what industries, how, etc.

There were always many good (ecommerce) and bad examples (failed ERP implementations).

Complicated relationship? (2/4)

It is hard to correctly predict the effects of IT changes in a company, on its:- Brands- Processes- Informal authority- HR- Contracts- Suppliers- Customers- Regulatory environment- Etc.

Complicated relationship? (3/4)

IT was, and still is hailed as the generic solution, for various problems.

BUT, it turns out that there are few generic problems that all businesses share, and that matter for competitiveness.

Complicated relationship? (4/4)

INSTEAD, there are many company-specific problems, that general-purpose IT technologies, methodologies, etc., cannot solve well.

Especially if IT has to be used to support core competencies in a company.

A fundamental practical problem in Business & IT alignment (1/2)

Businesses need specific solutions, BUT:

- Internalizing all IT is:- Expensive- Error-prone (hard to be best-in-class)- Not feasible, since best HR goes to IT vendors

So business purchase IT products and services from IT vendors.

BUT, IT vendors look for generic technologies, to make make once, and sell many times.

A fundamental practical problem in Business & IT alignment (2/2)

IT is therefore configurable and customizable.

BUT, the next problem is understanding how to configure and customize it best.

Or in some cases, buy custom-made IT.

This is the problem of figuring out the requirements that IT should satisfy.

Figuring out requirements is hard

- Requirements are about the future

- To get requirements, you need to understand BOTH the business AND the IT

- Few people have expertise in both, and therefore:- Good "business analysts" are hard to find- Demand outstrips supply- Deep business analysis is expensive- BUT, it is critical for Business & IT alignment

Practical conclusion:

It may be good NOT TO BUY business analysis, but have it IN-HOUSE, because it requires a deep knowledge of the business.

Especially if IT is crucial to competitiveness.

CASE A: Telco software maker

Company A:- Makes and sells B2C IT software to telecoms- 100+ employees; big part are engineers- 7 years old

CEO observed these issues:- Final products do not satisfy approved product designs- Product development schedules are missed- Product quality is lower than desired

How do you solve this?

CASE A: Telco software maker

Solution design process

Interviewed:- Engineering leads, and individual engineers- Top management- Project leaders and managers

Interview conclusions:- Little engineering involvement during product design- Product design not well informed by engineering opportunities and constraints

CASE A: Telco software maker

Actual solution: Conservative alignment

- Changes to organization:- New positions, for lead engineers who participate in product design- New responsibilities associated to the new positionss- New composition to product design teams- New reporting from lead engineers to other engineers

- Changes to the company's product development method:- New way to evaluate feasibility- New way to decompose and propagate requirements

No buying of NEW IT products or services.

CASE B: Personalized triathlon training

Company B:- Sells personalized Ironman/triathlon training to top managers- 2 years old

Owner wants to:- Grow the business faster- Increase the number of athletes per coach

How do you solve this?

CASE B: Personalized triathlon training

Solution design process

Understand:- How is personalized training delivered- What are the constraints- What IT, if any, is already used

Analyze:- Can personalized training service be automated?- How much of it can be automated?- Which parts can be automated?- Costs of automating each part?- What would the future service look like to the customer?

CASE B: Personalized triathlon training

Actual solution: Progressive alignment

- Changes to the organization:- New service, which includes automated fragments- New training, to coaches, on IT which does automation

- Changes to IT:- New custom software made from scratch- 1st release made in 6 months- Made by outsourced team, at a consulting company- Made through revenue-sharing partnership with the consulting company

CASE C: Running startup

Company C:- Wants to offer highly personalized running training to everyone- 0 years old- Important backers

Owner wants to:- Grow the business faster- Increase the number of athletes per coach

How do you solve this?

CASE C: Running startup

Solution design process

Understand: - Market for automated running training- Economics of running training businesses- Coaching method (how the coach advises an athlete)- Available sensors (smarphones, HR monitors, etc.)

Analyze:- How to automate the coaching method?- How to monitor the quality of automated coaching?- How scalable is automated coaching?

CASE C: Running startup

Actual solution: Extreme alignment

Changes to organization:- Design of the brand and products around the core technology for automated coaching

Changes to IT:- New custom IT, that uses artificial intelligence

(Some) Lessons learned

- If you understand the business, you'll know requirements

- Aim to satisfy only some, core, requirements first

- Do small, controlled improvements, in BOTH organization AND IT together

- Evaluate quantitatively and qualitatively the changes

- Keep in mind that only a real-world test of changes gives good feedback.

The rest is all hypotheses / speculation.