Archive for category IT Business Alignment

IT Organization Success

Keys to IT Success



 Keys to IT Organization Success

No secret, for decades many IT organizations have struggled to be successful – probably more so than any other.  When is the last time you saw a dozen articles on the struggling accounting, marketing or human resources organizations?

Martha Heller in a 2010 CIO Magazine article discusses IT struggles and suggests a few ‘paradoxes’ in IT organizations that may be barriers to a successful IT organization.

  • The Business wants IT to be strategic, but force them to spend most of their time on operational issues.
  • IT needs to be stewards of risk mitigation and cost containment, yet expected to innovate.
  • IT is seen as that of an enabler, yet is also expected to be a business driver.
  • IT can make or break a company, but its leaders are infrequently members of C-level executive groups.
  • IT is one of the most pervasive, critical functions, yet must prove its value constantly.
  • Many IT successes are invisible, yet its few mistakes are highly visible.
  • IT project teams are accountable for project success, even if the Business has ownership.
  • IT staff loves new technology, but must embrace/understand the Business to be successful.
  • Many IT teams/people are uncomfortable dealing with people, but to succeed must build relationships, influence others, and resolve conflicts.
  • IT infrastructure is a consistent, long-term investment, but the Business thinks in quarters.

And here are a few more paradoxes I have experienced:

  • The Business wholly adopted  ‘BPI’, but IT has poor processes and rarely has budget for improvement.
  • C-level executives believe IT costs too much and fails to provide comparable value, but have limited knowledge of IT project or operational successes.
  • C-level executives expect IT to deliver new, strategic capabilities to their Business unit, yet most of the project identification, priorities and governance is driven by Business users and managers.
  • IT needs/must align its goals/objectives to the Business, yet the Business units goals/objectives are not always aligned with each other.

Any of these barriers hinder IT leaders and organizations from being valued and successful.  They can be mitigated and/or knocked down, but requires a relevant, achievable Strategy, competent People, and consistent, repeatable Processes.  In addition it also takes the IT leaders and staff to embrace/develop these 7 Habits of Excellence.

  • Build  Trust and Credibility
  • Develop  a Proactive Culture
  • Understand  the Company, Business Model, and Industry
  • Align  with Company’s Goals and Objectives
  • Lead  People  -  Manage Things
  • Adapt  to Change
  • Embrace  a Passion for Learning and Improvement


Developing these 7 Habits of Excellence will mitigate or eliminate barriers and result in these IT organization benefits:

  • Faster Throughput (projects and processes)
  • Less Costly (unit costs)
  • Better  Quality (products, software, systems and processes)
  • More Agility  (change)
  • More Capacity  (w/o more resources)
  • Better Risk Management
  • Better Place to Work

What IT paradoxes is your group facing??

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Drivers and Barriers in Establishing Business Alignment?
















Organizational Alignment 101

Before getting started with “how to” establish business alignment (BA), the champion of the effort needs to understand certain conditions exist inside organizations that are drivers or barriers for BA.  Think of drivers as conditions that make it easier, but not impossible if absent, for BA.  Barriers are conditions that may prevent BA or make it more difficult.  These evaluations will be helpful in determining a strategy for success. The most important are:


  1. Business executives and leaders understand and support BA
  2. Executives and leaders understand all parts of the business – strategy/model, processes, etc.
  3. BA a priority for business executives and organizations not in alignment
  4. All executives participate in developing business strategy, model, goals, etc
  5. Individual business MBO incentives support BA
  6. Demonstrated leadership depth and breadth
  7. Executives have track record of delivering on commitments
  8. Active process to measure BA


  1. Business units and departments are not well aligned
  2. Executives and leaders do not trust each other
  3. Business and/or  culture and decision making highly political
  4. Misaligned organization relegated to a ‘vendor’ instead of a business partner
  5. Lack of consistent and repeatable project portfolio management process
  6. Lack of consistent and repeatable project governance process
  7. Lack of consistent and repeatable service level agreement process
  8. Poor or no definition of IBA

It is imperative for executives and leaders to understand which drivers and barriers exist.  Periodically, they need to honestly evaluate drivers and barriers for each business unit, department, etc. that needs a high degree of BA.  They must take actions to create and continuously improve drivers.  For barriers, take actions to eliminate or continuously mitigate.

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Over Provisioning of IT Assets

Money Tree

Money Tree

Do you know IT’s typical utilization of hardware (workstations, servers, storage, and network), software, and facilities in “lights on” operations and maintenance is ridiculously low!!  Millions of servers run at less than 12% of capacity.  Storage is utilized at less than 30% of capacity.  What a HUGE waste of money.  Why do IT organizations run such low utilization?  Mostly to CYA – Scope 2, Buy 3.  Other parts of the business avoid these costs.  For example: 

1)    Would a COO spend $30 million on about a 100K square foot distribution center if during the life of that facility they would use only 15-30% of the total floor space?

2)    Would an airline CEO buy a $20-30 million passenger jet if the average load factor during its life was going to be 15% and at peak occasionally 40%?

3)    Would any executive hire 5 new, permanent employees to do a total of 40 hours of work per week instead of just one person?

NO, if they plan on having a job – or a company!  Yet this mass under utilization – or over provisioning – of IT assets has occurred for at least 2 decades and is not getting much better.  Plus most CIOs do not know the utilization of their IT physical assets, including me for most of my career. 

Let’s look at a real life example based on total cost of ownership (TCO) for a server.  A CIO that buys a mid-level enterprise server for around $50K in acquisition costs will pay a 3 year TCO of over $250K, assuming the acquisition cost is 20% of the TCO.  These TCO ratios can vary but are backed up by published research from several IT research groups.  But the “relative” TCO of that server is over $800K, if it is utilized at only 15% of its capacity.  Now multiply this actual or relative TCO by the “hundreds” or “thousands” of servers a large company has in its data center(s).  These costs are not soft costs.

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IT Business Alignment – “Search for the Holy Grail”



Much has been written, but much less resolved, about this perennial top five IT issue reported by Gartner, Meta, Forrester, CSC, CIO Magazine, academia and others.  By the way, IT business alignment (ITBA) is not just an IT issue, it is a business issue.  Alignment is needed across all organizations in a business.  Every business wants to be successful as defined internally, and by its competitors, the market, its owners and its customers.  Highly successful companies can trace their success to being -  first, very effective, and  second, adequately efficient  -  “doing the right things – right”.  The better the alignment between organizations, the more effective  their execution, and successful their results.  While most agree the importance of alignment is undeniable, adequate attainment has been elusive.

 So why hasn’t this issue been resolved or relegated below the top twenty CIO issues?  Four reasons:

  1. ITBA has not been well defined in many organizations, therefore, expectations are not set correctly and results are difficult to measure. 
  2. ITBA is a dynamic, people  process that must resolve conflicts and adapt to priority changes.  Often the processes have not been developed to resolve these issues in a consistent and repeatable manner.
  3. Many times the company’s business units and departments are not well aligned, so ITBA is difficult or impossible.  Rather ITBA relies on the “squeaky wheel concept’ and/or politics.
  4. While ITBA is a perennial top five CIO issue, according to a 2006 Accenture survey of CEO’s, ITBA was not a top ten issue for CEOs.  So is IT’s effort in this area the real issue?

So let’s look at the first issue – the definition of ITBA.  A good definition needs:

  1. to be specific, measurable, achievable, and realistic
  2. to answer “what” components are aligned
  3. to answer “who” must reach and own an alignment
  4. to recognize the agreement is based on current priorities, strategy, tactics and plans that can change
  5. to recognize limitations in resources
  6. not to include IT execution criteria

With these in mind, the definition could be:

 IT business alignment (ī t  -  biznəs  -  ə līnment)


  1. the cooperation and coordination between executives/leaders in business units, departments, etc, and executives/leaders in IT Solutions Development organizations to periodically determine/resolve business priorities and reach agreements as to which mix of projects to undertake that best supports business strategies/model, tactics and annual plans/objectives for a defined IT budget and resource level.
  2. the cooperation and coordination between executives/leaders in business units, departments, etc, and executives/leaders in IT Services Delivery organizations to periodically determine/resolve business priorities and reach agreements as to the appropriate service levels to provide that best supports business strategies/model, tactics and annual plans/objectives for a defined IT budget and resource level.

How does these definitions compare to our criteria for a good definition?

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