IT KPI’s green, business not happy!

Posted: March 4, 2012 in Alignment, Communication, Partnership, Skills
Tags: ,

Found an interesting article, which I like to publish integrally, because it illustrates some of my ideas as well!

Is Business-IT alignment just a state-of-mind?

Have you ever heard of Business-HR alignment or Business-Finance alignment? Probably not. So why is so much attention paid to Business-IT alignment? This question was raised by an UCPartners Academy participant early December 2011 and stayed on our mind long enough to see the New Year. Information becomes a strategic asset so harmonizing business and IT functions is important. Business-IT alignment often seems a struggle for energy companies and needs a lot of effort and dedicated initiatives. Or can Business-IT alignment ‘just’ be a state-of-mind, where problems can be solved by a mental change that requires little effort?

Information is a strategic asset

Business-IT alignment refers to applying Information Technology (IT) in an appropriate and timely way, in harmony with business strategies, goals and needs and its external environment [1]. For energy- and utility companies managing information is just as important as managing utility infrastructures and electricity, gas, heat and cold commodities. Competitive and innovative use of IT can transform business strategy and helps enterprises to be successful in the upcoming ‘energy transition‘ era. In other words: Business-IT alignment is important because information is more and more becoming a strategic asset.

Business-IT alignment is difficult

We recently heard several utility staff say that ‘all IT KPI’s are green but the business is not happy’. Technically the IT function delivers what it should deliver: the IT infrastructure and business applications are reliable and incidents are dealt within the agreed time frames. But IT KPI’s are not always linked to business KPI’s: Server uptime for instance is not the same as Allocation process uptime. This is just one of the many cases we encounter where IT is not aligned with business and business is not in alignment with IT. Other cases have to do with rigidity of protocols, poor prioritization processes, unfit organization structures, unclear IT leadership and lack of business sponsorship at IT changes. These cases are symptoms of a situation where investments in IT remain significantly unleveraged.

The need for Business-IT alignment initiatives

Luckily there are many signals of improvement in our industry and IT is no longer perceived as a cost of doing business. But as the KPI example above demonstrates the state-of-mind still leads to an emphasis on control versus trust. Control is a low-level Business-IT maturity characteristic and does not stimulate innovation and entrepreneurship. In the KPI example a relationship based on trust would lead to a limited set of Key Goal Indicators (KGI’s) instead of multiple technical IT (and business) KPI’s. Key Goal Indicators are the result of a Business- IT vision and shared risks and rewards. Solving a whole range of issues similar to the KPI example calls for a planned and focused approach: Business-IT alignment programs.

A state-of-mind

So Business-IT alignment is important and difficult. But does improving alignment always need a lot of effort and program-like initiatives? A well known management coach [2] once showed us that to say ‘I am going to…’ in fact emphasizes the fact that ‘you are not…’. You smoke or you don’t smoke. To stop smoking is a decision you make here and now, a state-of-mind and not a plan for the New Year that suddenly becomes reality on January the first. To say that you will be a business focused IT department emphasizes the fact that you are not. You either are business focused or you are not, or perhaps trying hard to be so. You are an energy company colleague specialized in IT or an IT employee that happens to work at an energy company. Small change, big difference! Could that be why one never hears about Business- HR alignment or Business-Finance alignment? Because HR=Business and Finance=Business?

Why a ‘simple’ mental change is difficult

Last year we worked together with utility (IT) employees that said they would like to meet with business colleagues more often but had no project numbers for these non-productive hours to write on. This example shows how a welcome mind-set can still be hindered by existing structures. It also shows the toughness of a culture that does not stimulate innovation and entrepreneurship: how can joint Business and IT meetings ever be seen as non-productive? Research [3] in this area shows that the skills component of Business-IT alignment has the lowest maturity level score: innovation, entrepreneurship, change readiness, career crossover etc. Hence we conclude that Business-IT alignment has a lot to do with a state-of-mind but changing this state-of-mind is difficult!

Final verdict

Is Business-IT alignment a state-of-mind that ‘just’ requires a mental change or do we still need to work vision, KPI’s, organization structures? Business-IT alignment is important and difficult. Initiatives that deal with vision, KPI’s and structures alone are not sufficient when the people that work in these structures don’t change. Changing a state-of-mind alone is not enough either; hindering structures must be replaced by facilitating ones. A successful Business-IT alignment transformation needs a focused effort of ‘hard’ and ‘soft’ aspects combined.

By naming this topic Business-IT alignment we might have created boundaries that do essentially not exist. So we end this column with a new challenge; to find a better name! Fortunately the title for the next column is already available: Key Goal Indicators green, everybody happy!

Rinke van de Rhee

Source: http://www.ucpartners.eu/user_files/file/ucpartners_column_business_it_alignment_en_feb_2012.pdf

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