The Strategy to Bottom Line Value Chain

Alignment Practice

The following is an excerpt from  "From Business Strategy to IT Action"

"Getting business and IT aligned is a prerequisite for delivering IT value, and is on the critical path for using IT to improve business performance.  Alignment can be measured, and consequently can be managed and improved.

While the Prioritization practice allows management to assign resources to proposed IT initiatives based on bottom-line impact and connection to strategic intentions, the Alignment practice does the same for existing IT applications and infrastructure.  In most companies, IT resources dedicated to existing activities far outweigh resources given for new initiatives.  These resources are rarely examined for continuing contribution to the business.  The Alignment practice looks at these activities and assesses the cause and effect between existing IT activities and the company's strategic intentions and operations.

One of the hardest things to do in any business is stop doing things that are currently in place.  Legacy systems and imbedded infrastructure in particular take on a life of their own, with little formal examination of their continued value.  However, every dollar, man-hour, and infrastructure resource that is spent on existing activities is a resource not spent on new initiatives that may have a greater value to the company.  The Alignment practice provides a way to look at past resource decisions in the light of present and future needs, and free up resources from lower value existing activities to be used for higher value initiatives supporting the existing strategic intentions.

When business managers ask whether the company’s IT resources are being invested in the right place, what they really want to understand is whether there is a difference between where IT’s energies are being applied and the real business problems.  This happens when senior managers are distant from resources decisions, such as when investment decisions are made by middle-level supervisors rather than managers, when maintenance and support overwhelm new development, and when IT leadership resists re-allocation to new business areas, when business conditions change.

The Alignment practice is divided into three parts.  The first,  called “Strategic Alignment,” addresses the alignment of IT asset pools (applications, infrastructure, services, and management) to the business strategic intentions. The second, called “Internal IT Alignment”, addresses how well each of the four IT asset pools are consistent with  each other, and in particular how well services and infrastructure supports the application asset pool.   The third , called Functional Alignment, addresses the service level, quality, functionality, technology, and intensity of use, of each asset pool. 

The Alignment practice asks a fundamental question: do the existing IT activities promote or inhibit the company's strategic intentions and operational requirements? Each Alignment practice part addresses this question."

Excerpt from "From Business Strategy to IT Action"