A colleague once told to me how to assess the health of the economy. "If your neighbor is laid off, it is a recession," he explained, "and if you are, then it is a depression." Well, as signs go, those are pretty good ones for your economic outlook.
If only we had similar signs to assess business and IT alignment. Business leaders have whipped up quite a storm about the topic. However, one seldom finds a discussion on the cause for that concern. I mean, what prompts people to get concerned about business and IT alignment or lack thereof?
Before we get crazed about getting business and IT aligned, I thought, it would be helpful to know the symptoms of that disease. Are there telltale signs of trouble in paradise? I believe that there are and this article discusses my favorite seven. However, in the interest of full disclosure, I must reveal that these are only symptoms that require further analysis to get to the root cause. Perhaps, what is more dangerous than not to have any cause for concern is to confuse symptom for root cause.
The 7 signs of trouble in the "business and IT alignment" paradise
- Declining revenues and/or stock price
- Fragmented IT organization
- Rising IT costs
- Frequent leadership changes
- Major project failure
- Declining employee productivity
- Declining employee satisfaction
Let us look at each and see why they point to issues with business and IT alignment. Please bear in mind that they are not presented in any logical order i.e. number one is not necessarily more important than number seven.
Revenues and/or Stock price plummets
Revenues and stock price decline due to many reasons. Is the lack of business and IT alignment one of them? A company in a declining industry will see its revenues decline. Well, not necessarily. For example,
- Companies do grow in a declining market by capturing share from others or through mergers and acquisitions
- Companies do grow in a declining market by adapting i.e. they try new markets and/or new products
However, in today's business climate, any strategy a company deploys requires active IT participation. Whether IT is enabling or driving this business transformation is a matter for further analysis. But the fact remains that revenue decline is a cause for concern and among other things, the company's business and IT alignment must be analyzed.
Fragmented IT organization
"Shadow" IT organizations are a business reality. The mere existence of these organizations may not be a good sign of trouble - there are control freaks who want to control everything that affects their business. They will control no matter whether it is logical or not. However, in general, this is a good sign that business does not trust IT to deliver. Hence, they take it upon themselves to hire IT guns who will do what they want and when they want it done. The more fragmented an IT organization, the more it is a cause for concern. Again, an analysis is required that will determine if business and IT alignment is indeed the root cause of this symptom
Rising IT Budget
IT spending can and does increase for good reason. The analysis required is to see in which areas is this additional spending being directed and why. We will have to overcome our logical conclusion that a growing company will spend more money in IT. Revenues can and do increase keeping the level of IT spend the same. Sometimes, revenues can increase with the level of IT spending decreasing. The only way to assess the applicability of this symptom to our cause is to do further analysis. However, once again, this symptom should be taken seriously enough to undertake that analysis.
Frequent IT Leadership Changes
CIOs careers are notorious for their short tenure. However, some organizations do have CIOs who beat these tenure projections by a mile. Leadership changes are a sign of dissatisfaction with IT. Business leaders are expressing their disappointment emphatically. They are also expressing their helplessness in truly understanding the cause of the purported lack of performance of their IT capability. Perhaps, what is even more telling than this obvious firing of the CIO, is the frequent change in direction that the CIO was engaged in prior to their unceremonious departure. If your organization is frequently changing "priority", then you are in a tailspin that will result in your career sleeping with the fish as they say.
Major project failure
Sometimes, we believe that the failure of a major project led to the ouster of the CIO. I believe, the project failed because the CIO was on their way out not the other way around! The fact that the project failed is telling us that the CIO was on their way out long before it failed. Major projects succeed due to team work. The team is NOT the IT team but comprises of both business and IT. It is when one or more of its members - both business and IT - do not show up to play that the team fails. It is when the leadership - both business and IT - of the team does not show up to play that it fails. If there ever was a sure shot sign of business and IT misalignment, major project failure is it. All along that sordid journey are signs - delays, missed deadlines, budget overruns, scope changes etc. - that tell you that you are on the titanic and the iceberg is getting closer and closer.
Declining employee productivity
Whether one measures these productivity gains or not, its impact is felt. We all know when a company's employees are productive and when they are not. Empty cafeterias at lunch time or vacant parking lots at 5:00 P.M. are false signs of this lack of productivity. To the contrary, they might signal an exceedingly productive organization that does its work in time and then it is off to play. Telltale signs of lack of productivity are when people work all the time and nothing ever gets done. That is a cause for concern, whether you believe that is due to politics or IT. Through this analysis we can rest assured if IT is delivering on its promise to increase productivity!
Declining employee satisfaction
IT employees, much like any other professions, thrive on results. They are the most satisfied, when they feel that the organization is moving forward and they have a hand in that. Of course, they would like to share in the rewards of this success! If business and IT are aligned then the organization should move forward. The resulting business value should be loud and clear for everyone to see. It's size should be big enough for everyone to share. Employee dissatisfaction reaches its tipping point when they leave the organization. By then it is too late to do anything. So, when we get back those employee surveys and your results are hovering in the low 30s, undertake an analysis to determine the root cause of this dissatisfaction. You might be surprised to learn that well compensated employees are dissatisfied with the frequent and unnecessary changes in IT's direction!
About the Author: Sourabh Hajela is a management consultant and trainer with over 20 years of experience creating shareholder value for his Fortune 50 clients. His consulting practice is focused on IT strategy, alignment and ROI. For more information, please visit www.StartSmartS.com. Or feel free to contact Sourabh