ITSS
Business & IT Alignment
IT Support Solutions Inc.
Improving the Business Value of IT
(Bruce Cochrane - October 1999)
What is Alignment?
What benefits should we expect from a
successful Alignment Practice?
A recent survey rated “alignment of business
and IT as the top priority of IT executives for
the last 4 years running”. A Business & IT
Alignment practice provides ways to
consistently obtain optimum business value
from IT and IT Service Management (ITSM).
It includes proven approaches, such as;
balanced scorecards, key performance
indicators and ROI to monitor IT value.
However, it is the life-cycle approach of
continuous measurement, analysis, planning
and management action that ensures
business benefits are realized.
If an
alignment practice is to succeed it must
continually integrate process, organization,
knowledge and technology.
It must also
provide linkage between strategic business
goals and the business layers (e.g. Investor
and executive needs, business operations,
application and infrastructure services and
IT Service Management).
The basic steps include; 1) completing a
business and IT strategy with representation
from key areas of the company, 2) planning
the actions required to implement the
strategy 3) identifying key performance
indicators and relationships between the
outcomes
and
behaviors,
and
4)
establishing a measurement program that
continually measures the behavior indicators
and outcomes so that cause and effect
relationships will be recognized and
proactive management can occur.
Organization
Culture
Process
Measure
Analyze
IT
Value
Customers
& Suppliers
Technology
& Services
Manage
Plan
Knowledge
Business
Strategy
The expectations are highest for companies
that are experiencing high growth,
competition, lack of skilled resources and
significant changes in organization, process
and technology. Quite simply, a Business &
IT Services Alignment practice should
facilitate success in these areas.
A
commitment to an ongoing alignment
practice will yield results in the long term
more consistently.
These results include
improved revenues, market share and
profits. However, these results may take
years to surface and the reason for the
improvement could be occluded by other
influences, making it difficult to point to IT
and ITSM as the contributors. Other more
immediate, although less-tangible benefits
not only address these issues but may be
used as an early warning measure of what
the bottom-line benefits will be. To ensure
that these benefits are realized, the
management team must support an ongoing
practice of Business & IT Services
Alignment and see to it that the necessary
enablers are in place.
Consider an IT manager tasked with
expediting the roll-out of a new application.
There may even be a service level metric to
measure “roll-out time” from time of project
start to ready to use. Now consider that at
the same time, there may be other factors
that impact the ability to achieve “time to
value”, as opposed to “roll-out time”. These
other factors may be 1) integration of a
newly acquired company, 2) a new business
process, 3) new IT infrastructure, 4) new
strategic goals, 5) increased competition
and 5) a need to improve customer
relations/satisfaction.
Unless these
activities are coordinated, many of these
factors will work against achieving value
from the new application in a timely fashion,
hurting the effective ROI.
Alignment
provides a way to achieve this value from a
top down perspective as well as across the
organization’s internal initiatives.
Financial
Copyright 1999 – IT Support Solutions Inc.
www.it-support.com
Phone: 613·831·0256
ITSS
Business & IT Alignment
IT Support Solutions Inc.
Improving the Business Value of IT
(Bruce Cochrane - October 1999)
Consider some possible uses & benefits of
alignment:












Become proactive in IT’s contribution to
the business
Predict & Preempt serious trends (“lead
indicators” allow action before problems
become unmanageable)
Reduce the risk involved with projects
(Pin-point behavior sand prioritize IT
investment based on business value).
Prove & Improve the value of IT & ITSM
(e.g. revenue, market share, growth,
change
adaptability,
customer
satisfaction, cost of business/service,
productivity,
effectiveness,
quality,
learning, skills inventory, etc.)
Justify and stay on track with strategic
goals for IT and ITSM / ITIL initiatives
Better use of limited skills and resources
(e.g. ITSM, development, etc.)
Benchmark internal projects (Measure
the before & after results of IT & IT
Service Management activities)
Benchmark your company against
competitors and industry best practices
Visualize common goals and how each
group contributes (e.g. Users, Business
Execs,
IT
Execs
and
IT/IS
professionals)
Create a “stakeholder” culture at a
grassroots level
Improve the image of IT/IS and IT
Service Management
Quicker and more accurate decision
making
What is the value we are trying to
measure and improve?
Traditionally, measures of success have
been economic like revenue or profit, for
example.
The problem with using these
metrics to indicate value is that they fail to
measure the less tangible benefits and only
reflect a “delayed snapshot” of business
performance, thus making it too late to avoid
a problem once detected. This is true with
more and more industries where the
accelerating rate of change requires even
quicker decision making and reaction.
Managing a business proactively and
effectively in these times requires that we
Copyright 1999 – IT Support Solutions Inc.
balance
the
“lagging
indicator”
measurements with other measures that
forecast economic results through early
warnings. To this end, recent measures
have become recognized as “leading
indicators” (early warnings) of whether a
company will achieve its business goals. A
well
documented
example
includes
Customer Satisfaction as a “leading
indicator” of a company’s future market
share and revenue.
However, there are
other internal processes (e.g. ITIL) and
values that drive success as well.
Measuring these (e.g. staff training, internal
processes, service metrics, etc.) will provide
early warnings and a more accurate
measure of the internal business or IT
contribution.
Optionally, these internal
metrics may be used to measure and
manage the operational aspects of the
specific internal business or IT function.
This Business and Service Intelligence
capability helps managers to forecast,
diagnose and optimize their operation and
the contribution it makes to the business.
Once we have identified the business goals
we need to identify the “behaviors” within the
areas that are identified as contributors to
business benefits. Correctly mapping the
behaviors back to strategic goals is crucial
and requires not only a good understanding
of each function or process, but the
interaction between them.
Only through
this mapping can we define “lead indicators”
that forecast a company’s success, thereby
allowing us to be proactive in managing to
achieve the business goals. Many of these
lead indicators (behavior metrics) are
applied within the standardized high level
categories
of;
capability,
customer
satisfaction,
performance,
learning/knowledge, process, quality and
contributing factors.
Many of these measures are already used in
both layers but may not be mapped back to
business benefits or consolidated in a way
that makes trends and relationships easy to
detect. A measurement program (Business
and Service Intelligence) is a critical
component of the overall alignment practice
and while many existing metrics are
available, the degree to which they are
www.it-support.com
Phone: 613·831·0256
ITSS
Business & IT Alignment
IT Support Solutions Inc.
Improving the Business Value of IT
(Bruce Cochrane - October 1999)
suitable for any one implementation is
dependent on many factors.

We must measure and map correctly
and dynamically from a business value
perspective.

Alignment is not an “add-on”, but is a
measurement of the existing processes
and systems already in place.
“The
measures are the system”.

Critical to the success of the alignment’s
measurement program is the need for a
simple solution that will take hold at a
grass-roots level - one that is easy to
adapt for each business or IT function
but one that can evolve.
How do we Implement it?
In order to succeed with a Business & IT
Alignment or measurement project we must
consider implementation from the outset.
Technical implementation may be the least
of our concerns if we consider that many of
the success drivers are subtle and easily
overlooked. Dealing with the dynamics that
exist at
various levels
within
an
organization’s value chain is an imperative.
In our next issue we will get into more detail
about implementation, but for now the
following points highlight some of the issues
that we need to consider:

Awareness
and
unwavering
commitment
are
crucial
at
all
participating
levels
within
the
organization, especially at the senior
executive level.

Involving
stakeholders
in
early
workshops broadens the collective
experience and perspective and is the
first step toward changing the attitudes
and behaviors that help to achieve
business objectives.

An automated and integrated practice
that is embedded in existing or
specialized technologies improves the
chance of continuous alignment.
Communicate!
How do we take advantage of Business & IT
Services Alignment or its IT Scorecard
component? We need to share with our
peers (e.g. CFOs, CIOs, Directors and
Managers).
Share our ideas and
experiences regarding alignment in the
context of; awareness, attitudes, projects,
benefits achieved, tools used, etc.
Only
this way can we increase the chance of
operating a successful alignment practice
and reaping the business benefits.
Visit
www.it-support.com
for
additional
information on IT Service Management and
“Improving the Business Value of IT”.
IT Support Solutions Inc. provides consulting and solutions for improving ITIL based IT Service
Management, IT Infrastructure Management, Business / IT Integration and ITIL training. ITSS
has been helping businesses to manage their IT environments since 1994. Their professional
services have been used by clients and system integrators in the US and Canada, assisting them
through IT strategy & planning, implementation and improvement. ITSS Inc. service areas
include; ITSM Business Advisory, ITSM Best Practices Implementation, ITSM / Business
Integration, ITSM / ITIM Tools and ITIL Training. Their focus is “Improving the Business Value of
IT”
Bruce Cochrane is a principle at IT Support Solutions Inc. and can be reached at 613·831·0256
or emailed at bruce.cochrane@it-support.com . He has been with ITSS Inc. since 1994 and has
personally helped over 20 clients improve their IT Service Management. He holds ITIL
certification at the IT Service Managers level (Master’s), was Global Director for ITSM / ITIL
Services for a large global Professional Services firm, and was formerly the Chief Architect of
ITSM / ESM with a global Systems Integrator / IT Outsourcing firm.
Copyright 1999 – IT Support Solutions Inc.
www.it-support.com
Phone: 613·831·0256