Posts Tagged ‘Information Technology’

Recently, a dutch consultancy firm  - ForceFive – published the results of a survey on business/IT alignment maturity within several companies. What I found interesting, is the scale they used to define the alignment maturity level of these companies.

Well known are the maturity levels as defined by Luftman, starting at level 1, ending at level 5. ForceFive defined also five levels, but defined them differently. The stages they define are islands, recognition, collaboration, alignment and fusion. In fact, alignment is defined here as a certain state. And, fusion is defined as the ultimate state which companies can achieve.

Companies should strive to the level, which matches their specific situation, which is not neccessarily the top level.

The five levels are:

Islands (level 1)

Two separate worlds; lacking awareness of mutual dependency between business and IT.

Recognition (level 2)

Aware of mutual dependency. Business expects IT to be flexible in realizing their demands. IT imposes architecture and standards to the business.

Collaboration (level 3)

IT is seen as ‘business enabler’ to realize business objectives. Business defines processes and IT requirements. Business and IT are convinced of their mutual added value. Customer/Supplier relationship.

Alignment (level 4)

Shared processes which combine business and IT interests. Conflicts are prevented through deliberation and compromises.

Fusion (level 5)

Difference between business and IT becomes irrelevant. IT is integral part of business processes.

Reference

De IT organisatie van de toekomst, TIEM, January 2011 (Dutch). www.forcefive.nl

Just read an article of Weiss and Anderson (2004), in which a simple model is introduced to achieve alignment. Some overlap can be recognized with other models, but it’s strong in it’s simplicity. The model – The Four C’s model – consists of four common themes, which provide a way to align business and IT.

Clear direction, which is the development of a clear strategy for the entire organization into the near and distant future. Strategies must be jointly developed. Commitment involves and requires the support of management, especially at the highest level. Mutual respect and trust must be established. Communication must begin with the clear outlining of expectations. Once there is mutual understanding of eachothers intentions and goals, parties become involved and willingly to share risks. Cross-functional integration represents the fourth C. For an organization to succeed at business/IT alignment, boundaries between functions must be intentionally blurred. Creation of a cross-functional team to create an organization-wide governance structure is needed.

In their article, Weiss and Anderson touch also another interesting point of view. In today’s business, companies include suppliers and customers in their strategy development. Organizations gain the technology and interest in using their complete value chain. Business and IT are both needed to enable these kind of networked businesses. At the same time, if these kind of networking is creating value, than it shouldn’t be so hard to enhance partnership between business and IT. It’s just an relation which has to be managed as all the other partnerships, with suppliers and customers. Understanding, clear expectations and mutual respect and trust!

Reference

Joseph W. Weiss and Don Anderson: Aligning Technology and Business Strategy: Issues & Frameworks, A field study of 15 companies, Proceedings of the 37th Hawaii International Conference on System Sciences, 2004

The third of the six dimensions of the Strategic Alignment Maturity Model of Luftman (2000) is Governance. Ensuring that the appropriate business and IT participants formally discuss and review the priorities and allocation of IT resources is among the most important enablers/inhibitors of alignment. The decision-making authority needs to be clearly defined. IT Governance is a topic in itself, and widely studied. Sometimes, alignment is presented as part of good governance. Luftman adresses this as one of the six dimensions in his model. In this post I limit myself to Luftman’s description of governance. In later posts I will expand the view on alignment.

This dimension consists of 7 attributes. Comparing the questionnaire I’ve used with Luftman (2000), one dimension has been changed. Or, in fact, one has been replaced by another one.

The first two attributes are about participation of business and IT in the strategic planning of business and strategic planning of IT. If these processes are isolated, you cannot expect alignment to be mature. The more integrated they are, the better the alignment maturity will be.

The third (original) attribute was about the reporting structure of the CIO. He should report to the CEO to enhance alignment. As said, this attribute didn’t appear in the survey. The new attribute is about the ability of the IT organization to react/resond quickly to changing business needs.

The fourth attribute relates to the way the IT organization is seen, how IT is budgetted. Is IT seen as a cost center, an investment center or even better, a profit center.

The following, fifth, attribute is about how IT investment decisions are made. The more IT investments are seen as value driver, the better it is. The last two attributes are related to this. Number six is about the usage of steering committees. Does your company use steeringcommittees or not, and are the formal and regular or not. The last attribute has to do with the way projects are prioritized. It should be clear by now, that mature alignment consists of a shared prioritization process by business and IT.

As I mentioned earlier, IT Governance, is a topic in itself. Methodologies are provided by several authors and institutions. I will come back to this topic later on.

Reference

Luftman, Jerry: Assessing Business-IT Alignment Maturity, Communications of AIS, Volume 4, Article 14, December 2000

Knowledge Sharing Is...

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One of the six dimensions of the Strategic Alignment Maturity Model of Luftman (2000) is Communication. Communication is part of the social dimension of alignment. This dimension consists of 6 attributes, which all are important to achieve and sustain alignment. Let’s take a closer look at those attributes.

The first one is Understanding of Business by IT. To be effective, IT has to understand the business environment. Knowing about their processes, but almost more important, knowing the business’ customers, the products, competitors and so on. The second attribute is the other way around: Understanding of IT by the Business. Business should be aware of the capabilities of IT, but should also understand what needs to be done to develop and maintain information systems and technology. The better these understanding of business and IT of both worlds, the more mature alignment will be.

The third attribute is Inter/Intra-Organizational Learning. The better an organization is capable of learning (and educating) from opportunities like previous experiences, problems, and challenges, the more mature the alignment is.

Fourth, Protocol Rigidity has to do with the way how business and IT communicate with each other. Is it one-way or two-way? Is it only formal, or also informal? It may be clear that a two-way communication, with formal and informal characteristcs suits alignment best.

Next, Knowledge Sharing is also very important part. As I have introduced in the former post, knowledge sharing is an enabler for alignment. Shared domain knowledge is defined as the ability of IT and business executives, at a deep level, to understand and be able to participate in the others’ key processes and to respect each other’s unique contribution and challenges.

The last attribute in Communication is Liaison Breadth/Effectiveness. According to Luftman, many firms choose to draw on liaisons to facilitate. The key word here is facilitate. Facilitators whose role is to serve as the sole conduit of interaction among the different organizations are often seen. This approach tends to stifle rather than foster effective communications. Rigid protocols that impede discussions and the sharing of ideas should be avoided. I will come back to the role of liasons in a following post.

Reference

Luftman, Jerry: Assessing Business-IT Alignment Maturity, Communications of AIS, Volume 4, Article 14, December 2000

Most common models focus on the strategic dimension of alignment. Chan and Reich (2007) defined several dimensions on alignment. The strategic or intellectual dimension, the structural dimension, the social dimension, and the cultural dimension. A well known study by Reich and Benbasat (2000) defines only two dimensions. The first (intellectual dimension) concentrates on examining the strategies, structure, and planning methodologies in organizations. The second (social dimension) investigates the actors in organizations, examining their values, communications with each other, and ultimately their understanding of each others’ domains.

The intellectual dimension of alignment is defined as “the state in which a high-quality set of interrelated IT and business plans exists.” The social dimension of alignment is defined as “the state in which business and IT executives within an organizational unit understand and are committed to the business and IT mission, objectives, and plans”.

The study included four factors that would potentially influence alignment:

1. Shared domain knowledge between business and IT executives: the better IT and business executives understand and participate in each others’ key processes the better the alignment will be. Shared domain knowledge is defined here as the ability of IT and business executives, at a deep level, to understand and be able to participate in the others’ key processes and to respect each other’s unique contribution and challenges.

2. Successful IT history: the more successful the previous IT implementation the more trust business executives have in IT and the more motivation to communicate with the IT department, which leads to better alignment.

3. Communication between business and IT executives: the communication between business and IT executives can positively affect the level of mutual understanding and alignment.

4. Connections between business and IT planning processes: the more IT executives are involved in business planning the more they can understand and support the business objectives, leading to better alignment.

All four factors in the model (shared domain knowledge, IT implementation success, communication between business and IT executives, and connections between business and IT planning) were found to influence short-term alignment (the degree of mutual understanding of current objectives). Only shared domain knowledge was found to influence long-term alignment (the congruence of IT vision between business and IT executives).

References

Chan, Yolande E and Reich, Blaize Horner: IT Alignment: what have we learned, Journal of Information Technology (2007) 22, 2007

Reich, Blaize Horner and Benbasat, Izak: Factors that influence the social dimension of alignment between business and information technology objectives, MIS Quarterly, Vol.24, No.1. March 2000.

More or less in the same period as in which Maes (et al) developed the Amsterdam Information Model, a comparable model was developed by Van Bon and Hoving (2007), based on earlier work in 1998. They named their model the Strategic Alignment Model Enhanced (SAME). Both models look the same. Maybe, the scientific backgrounds are different, but from a practical point of view they appear similar. What the SAME model introduces is a nice definition of the different layers.

These three different layers (strategic, tactical, operational), combined with the three colomns (business, information, technology) form the SAME model.

Reference

Jan van Bon and Wim Hoving: SAME, Strategic Alignment Model Enhanced, BHVB bv, October 2007

In the past years I’ve executed some assessments on the business/IT alignment maturity of some organizations. I’ve used the assessment method of Luftman, the so-called Strategic Alignment Maturity Model (SAMM).

This model can be used in a survey to see where a company stands regarding maturity and once this maturity is understood, it can provide the organisation with a roadmap that identifies opportunities for enhancing the harmonious relationship of business and IT [Luftman, 2000]. The model consists of 6 alignment areas. Each area has multiple attributes. For each area there are clearly defined maturity levels. All areas should be given attention to mature the alignment between business and IT. With the help of a questionnaire, based on the SAMM elements, people from business and IT valued each question with a score between 1 and 5. These scores correspond with the maturity levels as defined by Luftman. One question per attribute of the model. The outcomes of the survey can be plotted in a graph.

It’s interesting to know where a company stands regarding the maturity level on business/IT alignment. But, that in itself doesn’t help very much. What does help, is using the outcomes to start an open dialogue with and between business and IT representatives. By looking at the outcomes, one can easily point at situations where business and IT disagree, or where the mean score is low. Luftman states that all elements of the model should be more or less on the same level to have good alignment. Such a survey facilitates an open discussion. And, in this dicussion you can find out why people valued certain elements the way they did. And this provides valuable insight into which areas improvements are possible and needed.

In some cases, the questionnaire was send to different levels of the organisation. On strategic, tactical and operational levels. This was useful as well, because this gives insight in differences between these levels.

From a practical perspective, this survey is easy to apply. It’s not the overall maturity score which is important. It’s the insights the individual scores provide. These scores enable the dialogue between business and IT. And, once this dialogue has started, it’s so much easier to start working on improvements.

References

Luftman, Jerry: Assessing Business-IT Alignment Maturity, Communications of AIS, Volume 4, Article 14, December 2000

Luftman, Jerry and Kempaiah, Rajkumar: An Update on Business-IT Alignment: “A Line” Has Been Drawn, MIS Quarterly Executive Vol.6 No. 3, September 2007.

An article written by Andrew L. Miser on alignment in partnerships of couples gives food for thought for using some of these lessons in the enterprise environment. Couples tend to align, and when something in their live is not working well, or is creating misalignment, the partners will work together to resolve the issue to get back in alignment. Isn’t that what we are looking for in the business/IT relation as well? So, why not look further than the domain of business and IT alignment.

The paper identifies five distinct areas where being in alignment can make a big difference. Those five areas include the perspectives the partners share with respect to each other and their relationship, the values they share in their lives together, the vision they have for their relationship, the future they visualize, and the projects and committed action to which they commit to realize heir dreams.

 

Align on perspectives

A perspective or point of view is the particular way of seeing or framing what happens in live. Three perspectives are mentioned which can have a positive impact.

First, adopt and align on the perspective that nothing is inherently wrong with either of the partners or the partnership in itself. With this perspective you can powerful focus on an issue you are dealing with and can avoid assessing weaknesses in yourselves or in the relationship.

Second, adopt the framework that each of you are responsible for your own happiness, but not that of your partner. Although you are not responsible, you can be committed to it.

Third, adopt the perspective that, for your relationship to work, it must work for both of you. A partnership can only be a partnership when it is collaborative and a “win: for both of you and for your relationship.

So, both partners are equally responsible for the partnership!

Align on values

Some couples value mutual understanding, validation, communication, openness, compromise, and friendship. Other couples value the freedom to express different viewpoints, emotional expressiveness, and passion. Still other couples value minimizing conflict, sharing common ground, harmony and autonomy. Couples who co-create and align on their values can be very successful and fulfilled in their relationship over the long-term. When you and your partner are able to articulate and generate the core values in your relationship, you co-create the foundation of your relationship on an on-going basis.

Align on vision

Another area where you and your partner can be in alignment is in articulating a vision for your lives and your relationship. A vision for your partnership conveys what you want to express in the world as the fulfillment of your lives together. It is not just the achievement of life goals or objectives. A vision for your relationship represents what you stand side-by-side for in your family and in your community. A vision could be thought of as a co-created stand for the quality of your relationship and lifestyle.

Align on visualizing the future

A fourth way you and your partner co-create your lives is through inventing a future for your partnership. To create the future, first anchor yourselves in what you value and in the vision you have for your relationship. Then, visualize and share with each other your dreams of your future, irrespective of time. Once you share and experience your possible desired future together, you can choose and align on a timeframe for the manifestation of the future you have both co-created. Committing together to the future you have co-created is essential for expressing your partnership in action. Almost immediately after making this commitment to your future, you will see a host of “partnership projects” needed to fulfill on the future you have envisioned. You will experience an alignment of focus and action when you undertake these partnership projects as an expression of your commitment to make manifest your future.

Align on committed action

Partnership projects are distinct from the normal “routine” of life as they are co-created by the couple to bring their future into existence and co-owned for the duration of the project. Within these projects, you and your partner can cooperate together in planned action and in co-owning your accomplishments, both the intended and the unintended outcomes. You can examine and acknowledge any disempowering perspectives you may have unwittingly adopted along the way as well as identify actions and accomplishments that you still need to take. By co-owning the results of your project(s), you are able to re-create your partnership and stay in action. When co-creating projects and bringing them to fruition, you will find that there are several necessary steps to co-designing a successful partnership project. These include creating the future accomplishment of the partnership project, sharing any current perspectives and concerns that may be limiting the project outcomes, creating and choosing an empowering way of being for the project, defining the actions necessary to fulfill the partnership project and putting them into time. It is also works and is fun to name the project. You will also discover that, throughout the life of your project(s), you must meet periodically so you can evaluate the results of your actions, plan the next steps of their projects and be in alignment on a regular basis.

Conclusion

Although all of the above is writtten around a partnership between two people, much of it could be beneficial for a healthy relationship between business and IT within a company. It all starts with the wish to establish a real good partnership between business and IT. Top level management must believe in this, and try to fill in all of the five areas.

 

Reference

Miser, Andrew L.: The Power of Alignment, Elysian Enterprises, Brookline.

Synchronized swimming

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Last month I’ve read an article on how organisations cooperate regarding IT, which contains a couple of conclusions which I recognize very much in practice. Although the article is mainly talking about cooperations between organizations, it appears also applicable for situations within large enterprises and institutions. The article is written by a couple of advisers of dutch consultancy firm TwynstraGudde (www.tg.nl).

They illustrate that most partnerships are based on trying to realize the perfect world. Managers as well as IT professionals are very capable of dreaming of the ideal organisation, proces or IT solutions. A world in which every hospital has the same process, or comparable departments are exactly the same because they produce the same results. But, in reality it’s always less perfect. Some barriers are mentioned which are in the way of the perfect world.

1. Irrational behaviour
Although partnerships seems to be based on rational arguments, in practice it’s hardly the case. Most managers and IT professionals tend to act as result of emotional or at least less rational motives, which they can cover very well in rational arguments.

2. Lack of trust
Trust is neccessary, but isn’t there from the beginning. Trust needs time to grow.

3. Shared versus individual benefits
In realizing the ideal situation, cooperating partners need to give and take. In many cases, costs and benefits won’t be for one single party. The shared goal should prevail over the individual goals.

4. Concept versus reality
In bringing different parties together, the idealized concept needs to be translated into practice. This needs to be done on an abstract level. Too much details will harm the partnership, due to the fact that people will keep on discussing details, and will not longer focus on the shared goal.

5. Organisation and ICT not in sync
After development ICT systems will be implemented in a rather short period of time. Organisational changes aren’t implemented in a split second. Once the systems are implemented, organisational changes will take off, and it will take time. Often management expectations are too high, and they expect all the benefits as soon as the systems are implemented. Often this leads to disappointed management which threathen the partnership.

6. Different backgrounds
A partnership between organisations (but in my view also within the larger organisations) requires people from different disciplines to work together. This sounds easier than it is. People tend to be biased, and it’s common that they don’t understand each other.

In the article, some recommendations are given to solve the issues herefore mentioned.

  • use former failures, learn what went wrong
  • keep your eyes on the shared goal and common stakes
  • stay away from details
  • preferably institutionalise a new entity for the partnership
  • make absolutely sure that there is full executive commitment
  • don’t approach the partnership as a project, but as a process.
  • stimulate people with guts.

For people involved in cooperating entities, whether between or within companies, these insight should be recognizable. Especially true in the field of business/IT relationships. The recommendations could inspire you as well!!

Reference

Gloudemans, Migiel, Opheij, Wilfrid, Wendel de Joode, Ruben van, Wittkampf, Michiel: Samenwerken en ict, hoe dromen toch werkelijkheid kunnen worden, TIEM 39, 2010 (Dutch).

There are numerous articles, studies and models to be found on the topic Business/IT-alignment. This makes it hard to define which model is most adequate to use. But some models are apparently much more accepted than others, although there seems to be no consensus on the best one. The basis of many models seems to be the Strategic Alignment Model (SAM) of Henderson and Venkatraman [Henderson and Venkatraman, 1999]. This model suggests that IT-business alignment can be achieved by building linkages among four strategic domains:

The dimension of strategic fit differentiates between external focus, directed towards the business environment, and internal focus, directed towards administrative structures. The other dimension of functional integration separates business and IT. According to the authors, Strategic Alignment can only occur, when three of the four domains are in alignment.

According to Leonard [Leonard, 2008] the SAM-model merely describes what needs to be aligned. In the same study, Leonard points out that there has been far less consensus regarding how alignment is to be achieved. The model which is seen by Leonard as the model which gives insight in the processs by which alignment can be improved is the model of Luftman. This is more about the question how alignment is achieved. The theory of Luftman is found in many articles as a framework for assessing Alignment within a company, and looks very useful.

Luftman developed a maturity assessment model, based on the 12 elements of Business/IT-Alignment, which can be recognized in the model of Henderson and Venkatraman. The components of this model, in concert with the earlier enables/inhibitors research [Luftman and Brier, 1999], form the building blocks for the strategic alignment maturity assessment method [Luftman, 2000].

This model can be used in a survey to see where a company stands regarding maturity and once this maturity is understood, it can provide the organisation with a roadmap that identifies opportunities for enhancing the harmonious relationship of business and IT [Luftman, 2000]. The model consists of 6 alignment areas. Each area has multiple attributes. For each area there are clearly defined maturity levels. All areas should be given attention to mature the alignment between business and IT.

The areas are:

Communications

How well does the technical and business staff understand each other? Do they connect easily and frequently? Does the company communicate effectively with consultants, vendors and partners? Does it disseminate organizational learning internally?

Competency/Value Measurement

How well does the company measure its own performance and the value of its projects? After projects are completed, do they evaluate what went right and what went wrong? Do they improve the internal processes so that the next project will be better?

Governance

Do the projects that are undertaken flow from an understanding of the business strategy? Do they support that strategy?

Partnership

To what extend have business and IT departments forged true partnerships based on mutual trust and sharing risks and rewards?

Scope & Architecture

To what extend has technology evolved to become more than just business support? How has it helped the business to grow, compete and profit?

Skills

Does the staff have the skills needed to be effective? How well does the technical staff understand business drivers and speak the language of the business? How well does the business staff understand relevant technology concepts?

In my experience, the assessment-method of Luftman really provides enterprises and organisations with a tool which gives insights in the business/it-relationship. It is very useful in defining improvement areas, and even more important, it facilitates an open discussion with executives from business and IT. What it doesn’t, is providing guidelines how to improve the alignment between business and IT. But, the six dimensions cover, in my experience, quite nice on which elements attention should be given. Not at one specific, but all dimensions should be in harmony. I will come back to these dimensions in following posts.

References

Henderson, J.C. and Venkatraman, N.:Strategic Alignment: Leveraging Information Technology for Transforming Organizations, IBM Systems Journal, 1999

Leonard, Jenny: What are we aligning? Implications of a Dynamic Approach to Alignment, 19th Australian Conference on Information Systems, Christchurch, 2008

Luftman, Jerry and Brier, Tom: Achieving and Sustaining Business-IT Alignment, Calirfornia Management Review, Fal 1999

Luftman, Jerry: Assessing Business-IT Alignment Maturity, Communications of AIS, Volume 4, Article 14, December 2000