Archive for the ‘Horizontal Alignment’ Category

Organizations are dynamic systems, in which all parts should be aligned to get results. Tosti and Jackson [2003] of iChangeworld Consulting wrote an interesting whitepaper on Organizational Alignment. They introduced a framework which, in my opinion, illustrates an important view on alignment.

Figure: Organizational Alignment (Tosti and Jackson, 2003)

This model describes two interdependent paths for moving from a broad statement of organizational mission and vision to specific results:

Strategic: The left-hand path emphazises what needs to be done: the strategic goals the organization will work toward; the objectives that groups and individuals must accomplish to carry out those strategies; the activities that must be performed to meet goals and objectives.
Cultural: The right-hand path emphazises how things should be done: the values that will guide people in carrying out the mission and vision; the practices which reflect those values; the specific, day-to-day behaviors which will represent the values and practices to others as people go about their work.

Organizational alignment requires compatibility between the strategic and cultural “paths”, and consistency within them. Organizations have traditionally emphazised the strategic path. Most invest considerable effort in defining strategic goals and objectives. Fewer adress the cultural path with clearly defined statements of values (Tosti and Jackson, 2003).

In Business/IT Alignment literature alignment is divided in an intellectual dimension and a social dimension. One could easily see the analogy with the strategic and cultural dimension of Tosti and Jackson. Where in Business/IT Alignment, these two dimensions are often looked at in isolation, it’s better to follow the advice of Tosti and Jackson to consider both dimensions as interdependant.

Reference

Tosti, Donald T.; and Jackson, Stephanie F.: Organizational Alignment, iChangeWorld Consulting LLC, Novato, USA, 2001-2003

I’ve adressed many models and theories regarding Business/IT Alignment. I have read lots of literature on this topic, and still, as a practitioner I did not find a single one which helped me out in daily practice. For me enough reason to see if I can reconstruct a framework which gives some practical guidance. I do not have the intention to add a new alignment model, but like to combine what I’ve seen.

Many models simplify reality. This can be useful, but oversimplified models loose their practical use. Still, I’m convinced that we can look at the real world using the proper models or frameworks. I’m not the only one who tries to bring the different views together. I have found a thesis of Vargaz Chevez (2010), who constructed the Unified Strategic Alignment Model. The following figure is from his work. Hardly readable, but it consists of many elements of the different existing theories. I regret to say, but this doesn’t help very much in (at least my) daily practice.

Figure 1 Unified Strategic Alignment Model

More usefull, is the so-called 9-cells model (Maes, 1999; Maes et al, 2000; Bon and Hoving, 2007). It offers an interesting view on the domain we’re looking at. The models divide three colomns representing business, information and technology. The three rows are in the two models a little different, but essentially they introduce an intermediairy row between the strategic and operational level.

Figure 2 Nine-Cells Model

This model can be used to  understand where we are looking at. Talking about alignment, one should try to bring all these nine cells in alignment. Many definitions see this as a static situation, where often only the strategic level is considered. But, strategies are worthless untill they are adopted by the tactical and operational level. The tactical level needs to define which projects are needed to really execute the strategy. And on an operational level, the projects need to be implemented and included in daily operations. The tactical level translates goals and preconditions of the strategic domain into concrete, realizable objectives, responsibilities, authorizations, frameworks, and guidelines for the operational domain [Bon and Hoving, 2007].

So, even if on a strategic level, business and IT appear to be aligned, this doesn’t guarentee that it will lead to success. In fact, one should be concentrating on the way the different cells are connected. And here lies the complexity of Business/IT Alignment. To make it even more realistic, we should add more cells. Most larger enterprises are organized in different units. This can be functional or divisional. This will lead to additional 9-cells connected. In the following figure, I have constructed this 3 x 3 x 3 cube, which I call the Generic Alignment Framework©.

Figure 3 Generic Alignment Framework©

This Generic Alignment Framework© is called generic, because this isn’t only applicable for Business/IT Alignment. One could replace bu 1, bu 2 and bu 3 with Sales, Marketing and Operations. Or even, put these functional departments in the place of business, information and technology. The matrix could even be larger or smaller than 3x3x3, depending on the specific organisation. Larger organisations do exist of different units which depend more or less on each other. This also depend on the operating model an organisation chooses to have [Ross, Weill and Robertson, 2006]. But, why should Business and IT be different from other entities? If this isn’t the case, we certainly could learn more on alignment by looking at alignment topics in other areas. And if the Business and IT relationship really indeed is different from the rest, how can we make these differences more explicit?

Using the framework

This framework has value in understanding the complexity of the domain of alignment. Which elements have to be taken into account when a company is looking for alignment. This model also shows the difference between the elements (whether departments or roles) and the linkages.

Many models and definitions adress the state of alignment an organisation has achieved. In fact, they take a picture of the organisation and measure if the elements are aligned at that very moment. Which, in a complex organisation, like illustrated in the framework, is a huge challenge. Anyhow, to achieve alignment, communication between the elements is required, which means that all information should pass all these linkages without any bias. That’s the process of alignment.

The most widespread theories on alignment approach this topic from a strategic point of view.  That in itself isn’t wrong, but they also restrict their theory to the strategic level. That’s wrong. Because an important problem area is excluded (or taken for granted), which is related to a proper translation of strategy into action, through the tactical level onto the operational level.

To be continued (also on page Howe To…)

One of the proposed mechanisms to improve alignment is the usage of relationship managers or liaisons. Some people think this is usefull, others think the opposite. From firsthand experience I can say that it can be usefull, but only when the role is filled in properly.

The liaison role is one of the linking mechanisms as proposed by Fonstad in the IT Engagement model. Also Luftman suggests using this role to improve Business/IT alignment. But there is criticism on these kind of roles. In his blog, Harwell Trasher puts down a strong advice not to use a Business/IT Liaison person. He found out that over time liaison people gravitate toward either the business or IT camps, and begin to take sides in disagreements. Then, the liaison will magnify the problems rather than solving them.

Although I recognize this risk, I personally think liaisons can help improving alignment between business and IT. In the right situation, with the right person and for the right period of time.

Liaison roles are usually set up when the volume of contacts between departments grows. They are formal roles designed to facilitate communication and bypass vertical communication channels. A lot of their work is carried out through informal communication of information. Problems which lead to the introduction of liaisons includes conflict between business versus IT, inadequate communication, poor understanding, no structure to prioritisation, business without control, increased pressure on systems, time wastage, insufficient requirements determination and employee demoralisation [Barry and O’Flaherty, 2003].

One of the critical characteristics of this role is its ability to remain neutral. They are supposed to facilitate both sides and work through any impasses. The role of liaisons is highly political, liaisons must “understand politics and then avoiding them”.

What’s extremely important, is that there comes a stage in every action, where the liaison must step out of the process, because he/she is no longer adding value. The liaison should facilitate both business and IT to work together, but shouldn’t get in between. So, after the initial stages of communication, his or her role will vanish. Liaisons should act somewhat reactive, sweeping up issues and promoting collaboration as they go along. Whenever possible, push back both sides (business and IT) and mediate in conflict situations.

Liaisons can help in organisations where Business/IT Alignment lacks maturity. Liaisons can help bridging the gap between the two parties and help developing communications. But, liaisons should limit themselves to facilitating. Otherwise they can get stuck in the middle, and they can hinder further collaboration by business and IT and become just another barrier. Then, they could be used for things where business and IT don’t feel like working together. In all cases, the liaison should protect their neutrality and keep the facilitating role.

Question is in which unit this liaison is organised. It could be within IT, as well as within the business. What I think is wise to do, is to select a person for this role with experience in the opposite side. If the liaison is organisationally part of IT, select someone with extensive business experience. If the liaison is part of the business, appoint someone with an IT background. In the end, a person with experience in both business and IT is ideal, but not frequently available.

References

Blog Harwell Trasher: http://blog.makingitclear.com/2010/06/23/liaison/

O’Flaherty, Brian, and Barry, Owen Harte: A Case of ‘Non Strategic’Alignment – An IT and Business Unit Liaison Role, 2003

Most research on alignment between business and IT has attempted to reduce its complexity to allow investigation of simple, direct cause and effect relationships. Still, alignment remains a top-concern. Maybe the way we look at it, isn’t the right way. Concentrating on one aspect of alignment at the expense of other dimensions is an option to reduce complexity. Complexity can be reduced further, by adopting the assumption that strategies are developed in a formal planning process and implemented as intended. However, this is rarely true in daily practice. Therefore, definitions of alignment are concerned with an idealised future that cannot accomodate any deviation. Secondly, these definitions are only concerned with what happens at an executive level and totally ignore events at an operational level.

Co-evolutionary theory provides a promising alternative, ambracing complexity, and capturing the messy nature of alignment in practice. I’ve introduced this vision already in the previous post. Campbell and Peppard developed a model based on co-evolutionary theory and complexity theory. See the enclosed figure. This blog isn’t suited to explain this model, but if you want to read more, read the paper on  http://www.som.cranfield.ac.uk/som/dinamic-content/media/ISRC/Coevolution%20of%20Strategic%20Alignment.pdf.

Some points are interesting though, which I would like to share. The core concern of IS managers in their study was the difference between espoused business strategies and those they could see implemented by their managerial peers in the business. IS manager at an operational level tend to support the actions of their business peers, not the strategies contained within the plans, which are normally difficult to understand and implement at an opearational level. Many participants in the research indicated that it is the relationship and collaboration that provides alignment, not strategic plans.

The data from this study indicated that both business and IS managers within an organisation ‘learn’ to communicate, trust each other, develop a shared system of meaning and shared domain knowledge and then to collaborate. That is, their capabilities co-evolve. The opposite is just as possible. They may make an unconscious decision not to collaborate. In either case the deviance amplification behaviour of positive feedback loops within the alignment system reinforce the situation.

Another intersting point is that there is a difference between trust between two people and trust between groups of people that is rarely explored in the literature. They found that there is a direct relationship between inter-organisational trust and performance. If intergroup trust exists then it is more likely that business and IS groups will collaborate to discover new ways in which existing technology can be used. They will tend to solve mutual problems rather than remain remote from each other. At the same time the trust will mitigate the effects of an occasional poor project performance. Trust between individuals had little direct impact on performance. It appears that individual trust is important during the development of group trust but does not have a direct impact on performance.

An interesting finding related to this, found in another study (Campbell, Kay and Avison, 2005), was that some of the organizations which have been studied had a culture that did not encourage communication or collaboration between the business and IS functions, nor between the business units themselves. In fact the organizational cultures encouraged competition and conflict between departments and personnel rather than collaboration. The lack of communication means that the development of trust is severely impeded. This, then, affects the development of shared domain knowledge which, in turn, affects long term strategic alignment.

It is now clear that both IS and business managers must develop a shared system of meaning, shared domain knowledge and then apply these skills as they collaborate to resolve common problems and issues. And not only on a strategic level, but maybe mroe important, also on a tactical and operational level.

Reference

Capmbell, Dr. Bruce, and Peppard, Prof Joe: The Co-Evolution of Business/Information Systems Strategic Alignment: An Exploratory Study.

Campbell, Bruce, Kay, Robert, and Avison, David: Strategic Alignment: A Practitioner’s Perspective, International Journal of Enterpise Management, Vol 18, No 6, 2005. http://epress.lib.uts.edu.au/research/bitstream/handle/10453/5762/2005003284.pdf?sequence=1

Recognize this?

The CMO Council sited 38% of Chief Marketing Officers (CMOs) say sales and marketing alignment and integration is a top priority. However, only 30% have a clear process or program to do something about it. With only 38% of CMOs making alignment a top priority, we can assume approximately 1 out of every 3 organizations recognize the issue but few take action. How about the other 2 out of 3? Are they not aware of the problems between sales and marketing? This article highlights common problems prohibiting sales and marketing collaboration, summarizes reasons one group thinks the other is the antagonist, and suggests solutions to narrow the divide between sales and marketing.

Unfortunately, inadequate solutions and uninformed executives have only perpetuated the problem. Sales and marketers have developed a terrible misconception of one another culminating in an environment filled with friction and dissonance. Brian Carroll, CEO of InTouch, attests that “communication breakdown affects nine out of ten companies”.

Alignment is a much wider issue than only Business and IT relations. So, couldn’t we learn more from other areas?

Source: http://www.leadliaison.com/revenue-generation-blog/sales-and-marketing-alignment/

 

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In this post I will introduce the IT Engagement Model, developed by Nils O. Fonstad of CISR, MIT. In previous posts I already showed the importance of alignment on and between different layers in an organisation. In a study of the Center for Information Systems Research (CISR) this issue is adressed as well. Fonstad (2006) states that IT departments always struggle with the eternal dilemma how to achieve company-wide strategies while simultaneously responding to urgent requests from business units to implement dozens or even hundreds of solutions for local projects. Two different streams of research have attempted to adress this challenge.

Research on IT Governance has taken a top-down approach and specified how management allocate decisions. The other stream of research, with a more bottom-up approach, focuses on how projects can be coordinated and managed.  According to the CISR study, neither of these approaches is sufficient. Succesful approaches adress two fundamental goals – alignment between IT and the rest of the business and coordination across multiple organizational levels. In earlier post I mentioned horizontal and vertical alignment, to adress these different dimensions.

An IT engagement model has been introduced, which is defined as the system of governance mechanisms that brings together key stakeholders to ensure that projects achieve both local and company-wide objectives. This engagement model consists of three general components.

  • Company-wide IT Governance – decision rights and accountability of comapny level and business unit level stakeholders to define company-wide objectives and encourage desirable behaviour in the use of IT
  • Projectmanagement – a formalized project management process, with clear deliverables and regular well-defined checkpoints, that encourages disciplined, predicatable behaviour for project teams.
  • Linking mechanisms – processes and decision-making bodies that connect project-level activities to the overall IT governance.

The first two are well recognized. What CISR has found to be the ‘missing link’ is the third element: Linking Mechanisms. Linking mechanisms are at the heart of a company’s IT engagement model. They enable ideas to flow back and forth between company-wide IT governance and project management. Linking mechanisms ensure that high-level governance decisions are understood and implemented by project teams, so that projects help to incrementally achieve the company’s objectives and the company learns from every project.

An effective IT engagement model enables traditionally independent stakeholders to negotiate between competing demands, influence one another, learn from each other, develop trust across the company, and work collectively on achieving local and company-wide objectives. It ensures that project solutions are not developed by any single stakeholder, but rather, result from multiple stakeholders working together to resolve competing interests (e.g. tactical versus strategic, local versus enterprise-wide, new versus reuse).

All three components of the IT engagement model are important sources of mechanisms. Engagement mechanisms take the form of roles, procedures, decision-making bodies and work-groups.

Engagement Mechanisms:

Linking mechanisms can be found in three categories: business linkage, architecture linkage,  and alignment linkage. Business linkage mechanisms link projects to company- and business-level strategies. Architecture linkage mechanisms link projects to enterprise and business unit architectures. Alignment linkage mechanisms link IT with the rest of the business, particularly at the business unit level. There are all kind of mechanisms possible. In the enclosed figures, some of the most prominent are shown.

CISR found out that firms with a stronger level of alignment distinguished themselves by engaging IT and non-IT stakeholders in three areas:

  1. Establishing and maintaining a daily level of conversation between IT and non-IT peers
  2. Ensuring that different projects link to corporate goals and shared resources, and
  3. Asessing and learning from project performance.

These firms had a key mechanism in each of these three areas. These were:

  1. Business-IT relationship managers:  A business-IT relationship manager is a formal role in which an individual engages with IT and a specified part of the business.
  2. Program Management Office: this typically consist of a central group that coordinates resources across projects, ensuring they collectively contribute to corporate level objectives.
  3. Post-implementation Reviews: PIRs typically consist of a group that essesses a project’s key targets and deliverables at the conclusion of a project or project cycle.

In following posts, I will dive deeper in the topic of IT engagement in relation to Alignment.

 

References

Fonstad, Nils, and Robertson, David: Engaging for Change: An Overview of the IT Engagement Model, CISR Research Briefing, Sloan School of Management, Massachusetts Institute of Technology (MIT), March 2005.

Fonstad, Nils, and Robertson, David: Transforming a company, Project by Project: The IT Engagement Model, CISR Working Paper 363, Sloan School of Management, Massachusetts Institute of Technology (MIT), September 2006.

Fonstad, Nils Olaya: Engaging Matters: Enhancing Alignment with Governance Mechanisms, CISR Research Briefing, Sloan School of Management, Massachusetts Institute of Technology (MIT), December 2006.

Alignment is expected to improve business performance, by aligning Business and IT Strategy. But, that’s not enough. According to Boar [1994, in Grant, 2003], effective alignment is predicated on the combination of prescient planning and the effective execution of those plans. The execution of a strategy is almost always realized via the tactical and operational levels of an organization. This means, that alignment must be realized, not only horizontally, but also vertically.

One definition on these two types of organizational alignment – vertical and horizontal – is found in [Kathuria et al, 2007]. Vertical alignment refers to the configuration of strategies, objectives, action plans, and decisions throughout the various levels of the organization. Horizontal alignment refers to coordination of efforts across the organization and is primarily relevant to the lower levels in the strategy hierarchy.

Alignment on different organizational levels

While IT-business alignment at the strategic level has been extensively studied (Chan and Reich 2007), there has been little study of how IT and business can align at the tactical level.

Tactical IT-business alignment is necessary for making sure that IT projects are implemented on time and the implemented applications deliver the planned and desired business benefits. Alignment at the operational or tactical level is required for ensuring that planned applications are successfully implemented, maintained and used, that applications and systems irrelevant to the business plan are not implemented, and that implemented IT delivers envisaged business benefits [Tarafdar and Qrunfleh, 2009].

The importance of alignment on a operational level is also adressed by Guldentops in [Grembergen et al, 2004]. He makes a distinction between vertical and horizontal alignment. Vertical alignment is primarily driven by repeatedly communicating an integrated Business and IT strategy down into the organisation, and translating it at each organisational layer into the language, responsibilities, values and challenges at that level. Horizontal alignment is primarily driven by cooperation between Business and IT on integrating the strategy, on developing and agreeing on performance measures and on sharing responsibilities.

Benbya and McKelvey came up with a model which highlights the relevance of analysing the relationship between Business and IT (Horizontal Alignment) but also the need to reconcile the views at different levels of analysis (Vertical Alignment). This model is shown in the enclosed.  Further, they redefine alignment as follows: “Alignment is a continous coevulutionary process that reconciles top-down ‘rational designs’ and bottom-up ‘emergent processes’ of consiously and coherently interrelating all components of Business/IS relationships at three levels of analysis (strategic, operational and individual) in order to contribute to an organisation’s performance over time”. [Benbya and McKelvey, 2006].

 

Coevolutionary IS Alignment [Benbya and McKelvey, 2006]

Gutierrez et al [2008] confirm the need for expanding research to the tactical and operational level. Based on findings from their literature review they state:

  1. Business-IS alignment and assessment approaches are mainly focused on the strategic level
  2. There is a lack of connection between strategies and IT projects implementation.

References

Benbya, Hind, and McKelvey, Bill: Using coevolutionary and complexity theories to improve IS alignment: a multi-level approach, Journal of Information Technology, No 21, 2006

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

Grembergen, Wim van, and Haes, Steven de, and Guldentops, Erik: Structures, Processes and Relational Mechanisms for IT Governance, Idea Group, 2004.

Grant. Gerarld G.: Strategic Alignment and Enterprise Systems Implementation: the case of Metalco, Journal of Information Technology, No 18, September 2003

Gutierrez, Anabel, and Orozco, Jorge, and Mylonadis, Charalampos, and Serrano, Alan: Business-IS alignment: assessment process to align IT projects with business strategy, AMCIS 2008 Proceedings, 2008.

Kathuria, Ravi, and Joshi, Makeshkumar, P., and Porth, Stephen J.: Organizational alignment and performance: past, present and future, Management Decision, Vol. 45 No 3, 2007.

Tarafdar, Monideepa, and Qrunfleh, Sufian: IT-Business Aligment: A Two-Level Analysis, Information Systems Management, No 26, 2009