IT unlocks a world of opportunities and delivers efficiency improvements. But such gains fritter away if IT works at cross purposes to business objectives. CIOs and top management need to ensure IT-business strategies are complementary.

IT-business alignment adds value through process improvements, new products, speed, and new insights. It delivers on customer satisfaction, reduces staffing costs, and make the business competitive. Case-studies of IT-business alignment working wonders abound. Movie houses in India implemented online ticketing to avoid lengthy queues and cut ticketing touts. Banks offer 24×7 virtual banking and an extensive network of ATMs to deliver on customer convenience.

But such alignment is not always easy. Here are the instances, when IT-business alignment may go awry, and how to overcome the underlying challenges.

1. Infrastructural Stumbling Blocks

A major obstacle to IT-business alignment is the gap between business requirements and the capability of IT systems.

Many C-suite executives do not understand how IT systems deliver value. They fail to loosen the purse strings to equip IT with solutions that fulfil business needs. Often, the returns of IT investment is over the long term. Calculating ROI is difficult anyway. It is hard to assign a monetary value to intangibles such as chatbots improving customer satisfaction.

Migration to the cloud offers the opportunity of altering costing from a capital expenditure model to an Operational Expenditure model, with attributable costs. But migration to the cloud requires upfront investment and efforts.

Forcing an IT business alignment requires the CIO to shed their arcane talk and become business savvy. They need to convince the C-suite and top management on realistic expectations from IT. Next, they need to pitch for the infrastructure required to meet such expectations.

2. Resistance to Change

In theory, using IT for business transformation is a no-brainer. But in the real world, ego clashes, resistance from entrenched power centres and vested interests may subvert change.

For instance, the need for analytics is obvious in today’s digital and knowledge economy. Data analytics unearth customer preferences, employee performance, and value chain trouble spots. Such informed decisions trump management by assumptions and guesswork. The prerequisite of Big data analytics bringing data under a single repository. Yet eradicating silos is difficult. Internal resistance and lack of cooperation often subvert the transformation initiative.

The onus is on the top management to support IT-business alignment. CIOs have their tasks cut out as ambassadors of change. They need to convince entrenched stakeholders the benefits of change, or what it is it for them.

US-based CVS Health offers a good case study. The IT team consolidated disparate project management groups. The integrated project management office had representation from IT and business heads. The ensuing deep collaboration leads to a better understanding of shared business goals. It made explicit the business requirements, what needs doing from a technology perspective.

3. Achieving Strategic Agility

The prerequisite for IT-business alignment is a definite business strategy and plan. Without a firm plan, technologies support individual actions, which may not be part of the enterprise strategy.

IT-Business alignment requires revising the IT strategy when business strategies change. In today’s fluid business environment, this happens often. Strategic agility requires:

• A strong collaborative framework for line managers to converse with IT seamlessly. IT leaders often struggle to collaborate effectively with business units. Many lines of business (LOB) often view IT as an obstacle for strategic innovation rather than an enabler. IT’s overbearing concerns on protocols, compliance, and security reinforce such perception. IT has to work hard to change such perception and convince the business case for such restrictions.
• A matrix set-up, with IT executives having an active role in making business decisions. The IT executives may have to convince line managers on how technology unlocks opportunity for the business.

4. Driving Digital Transformation

Most enterprise stakeholders acknowledge the need for digital transformation in today’s digitalised world. About 88% of IT leaders and 64% of Line of Business (LOB) staff view the role of the CIO as innovation-focused.

LoB leaders consider IT a strategic advisor to identify new opportunities.  Many of them regard the CIO as an internal consultant who advises on technology needs for the business and assesses risks in digital businesses. CIOs have to reciprocate by engaging with LOB teams to use technology and alter the business. Successful CIOs assist and even assume leadership of business innovation projects.

5. Balancing Conflicting Roles

IT leaders have to balance between transformational activities and their traditional functional role. 87% of CIO’s and IT leaders juggle standard functional tasks. Common functional tasks include security management, improving system performance, negotiating with IT vendors, and fire-fighting crises. Such CIOs also indulge in transformational work such as developing IT systems to fulfil business goals, establish digital platforms to cultivate the IT-business partnership, implementing new systems and architecture, and spearhead the change initiatives. IT’s expertise in implementing technology for operations, cyber-risks and service level agreements are critical to pitch new business opportunities.

About 73% of IT leaders find it a challenge to strike the right balance between the two roles. The priority remains to deliver basic services such as making sure laptops do not break down. Finding time and energy for strategic interventions beyond such basics often stumps IT leaders. There is a need to define the goals and objectives of the IT department. The best approach is a management-by-objective approach. SMART (Specific, Measurable, Achievable, Realistic, and Time-Bound) targets are the way to go.

In the new digital realities, IT’s role goes much beyond maintaining systems. Successful IT-business collaboration achieves synergy and delivers sustained competitive advantage.