Business and IT Alignment Vs Value

Originally presented at the IT Director’s Strategy Meeting, London, UK
Business & IT: Seeking alignment vs adding value
12th April 2007

Dr. Michael Ali
michael.ali@att.net
Slide 1
Today’s Topic
Business and IT Alignment
Or should I say…
Alignment: The Holy Grail
The ultimate goal of every CIO

Alignment: tons of information
Forrester, Gartner, McKinsey, etc. tons of

papers and studies (some for free!)
Search on “alignment”, 100 articles
Search on “Business IT Alignment”,

320,000 English webpages
An entire journal devoted to “Aligning IT

and Business Strategy”
IT’s #1 issue, resulting in…

Alignment: A Model
http://www.12manage.com/methods_venkatraman_strategic_alignment.html
… incredible amounts of time, …

Alignment: Another Model
Thorp, Information Paradox
Portfolio
Management
Proactive Management of Change

Program
Management
Project
Project
Management
Management
Activist Relevant
Accountability Measurement
Full Cycle Governance
… energy,…
Alignment: Yet Another Model
http://beta-books.com/value_chain.htm
Benson, et. al., From Business Stategy to IT Action
… and money (mine!) spent studying this issue,…

Alignment: other business functions
Search on “alignment”– lots on aligning

with IT, nothing on business alignment
Nothing on aligning with the business,

some on IT projects and alignment
Didn’t see anything in the subject

headings of past issues
At last! Articles on aligning purchasing

and supply chain strategy with business
strategy
… much more than by other “support”

Alignment: Why is it so important to us?
IT is relatively new (to the boardroom)
The only cross-functional, business process-driven function
IT runs the entire business
Enterprise-level change often starts with or is gated by IT
Any, all, some, or none of the above?

Alignment: The right question(?)
How can we ensure that IT is aligned with the business
Same question, same answers (320,000 webpages

Alignment: The right question(?)
Implication
Asking
“How can we ensure that IT is aligned with the business”
Implies that:
IT is ASKING PERMISSION
- can we be on the board?
- can we see the strategy?
- can we change this process/tool?
- can we have this budget?
- can we start this project?
- can we upgrade this infrastructure?
Asking “can we?” hasn’t provided THE answer

The right question
How to ensure that IT is aligned with the business
How do we generate business value?
THIS is the question the other functions are

The new Holy Grail
The ultimate goal of every IT

Generating Business Value via IT:
A different stance is required
* Boyd, John, “Organic Design for Command and Control”
Appreciation Leadership
assess what is happening decide what to do
Finding then exploiting ways for IT to help the

Generating Business Value: Barriers
“I don’t know”
“I don’t care”
“I don’t know how”
IT The Business
The barriers: ignorance, apathy, and despair
A Journey
Sea of Despair
Apathy Forest
Valley of Ignorance
Overcoming
Barriers
Sea of Despair Play to your strengths

Put your skin in their game
Find support
Apathy Forest
Find what they care about
Listen harder
Valley of Ignorance
Expose the data
Call in the experts
New goal, risks understood, mitigation plans in

The new Holy Grail
… but before we go racing off…

Generating Business Value:
A Caveat
Still from “Indiana Jones and the Last Crusade”
In our search for the Holy Grail, we must “choose

A cautionary tale about generating
business value through IT
Albertsons Markets
Situation (~2001):
Classic mid-market “squeeze”

Enter: Larry Johnston (ex-GE) as CEO
A CEO with a strategy (including technology!)

Add: Bob Dunst
“Dunst is a grocer’s grocer,

having spent his entire
technology career with
various supermarkets, most
recently Safeway.”
Handpicked CTO with talent &

experience
Equals: $500M+ Tech Overhaul
http://www.baselinemag.com/article2/0,1540,1522244,00.asp
IT Dream Project (warning bells?)

At last, the Holy Grail !!!!
Portfolio
Management
Proactive Management of Change

Program
Management
Project
Project
Management
Management
Activist Relevant
Accountability Measurement
Full Cycle Governance
Did they “choose wisely”?

Result: Part I
www.turnaround.org/cmaextras/Paper--Albertsons.pdf
Z-score
ABS: Albertsons
KR: Krogers
SVU: Supervalu
SWY: Safeway
Bottom-line business results, not great

Result: Part II
Supervalu, CVS and an investment group led by Cerberus Capital

Management, … have announced a successful bid to acquire all of
Albertsons' holdings for $17.4 billion.
Sold to the highest bidder!

Enter: Jeff Noodle, CEO Supervalu
"Our extensive research tells

us that grocery retailing today
should provide consumers
with products that allow
them to 'turn the dining
room lights back on.'
• Expanded perishables departments

• Shop the World, an international foods department;
• Wild Harvest, a natural and organics store-within-a-store, and;
• Enhanced pharmacy and health and beauty care departments.
No mention of technology but the strategy

Moral of the story
The goal of generating business value raises the bar on

the level of business understanding (aka appreciation)
and leadership needed in IT
Leadership, tempered with appreciation

Conclusion
“Aligning business and information-technology

strategies has been a challenge for decades. But the
challenge can be mastered. The common denominator
appears to be a strong information chief who
studies the business*, understands it fully, sees where
conditions can be improved, and then implements
information technology where it can add value**.”
*Appreciation
**Leadership
Strassman, Paul A., “Five Steps to Improve Your Information Productivity”

Baseline Magazine, October 15, 2006
What are you waiting for?

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Originally presented at the IT Director’s Strategy Meeting, London, UK

Business & IT: Seeking alignment vs adding value

12th April 2007

Business and IT Alignment

The ultimate goal of every CIO

Forrester, Gartner, McKinsey, etc. tons of

Search on “alignment”, 100 articles

Search on “Business IT Alignment”,

An entire journal devoted to “Aligning IT

IT’s #1 issue, resulting in…

… incredible amounts of time, …

Proactive Management of Change

Full Cycle Governance

… and money (mine!) spent studying this issue,…

Search on “alignment”– lots on aligning

Nothing on aligning with the business,

Didn’t see anything in the subject

At last! Articles on aligning purchasing

… much more than by other “support”

IT is relatively new (to the boardroom)

The only cross-functional, business process-driven function

IT runs the entire business

Enterprise-level change often starts with or is gated by IT

Any, all, some, or none of the above?

How can we ensure that IT is aligned with the business

Same question, same answers (320,000 webpages

Asking “can we?” hasn’t provided THE answer

How to ensure that IT is aligned with the business

How do we generate business value?

THIS is the question the other functions are

The ultimate goal of every IT

Finding then exploiting ways for IT to help the

“I don’t know how”

Sea of Despair Play to your strengths

New goal, risks understood, mitigation plans in

… but before we go racing off…

Still from “Indiana Jones and the Last Crusade”

In our search for the Holy Grail, we must “choose

Classic mid-market “squeeze”

A CEO with a strategy (including technology!)

“Dunst is a grocer’s grocer,

Handpicked CTO with talent &

IT Dream Project (warning bells?)

Proactive Management of Change

Full Cycle Governance

Did they “choose wisely”?

Bottom-line business results, not great

Supervalu, CVS and an investment group led by Cerberus Capital

Sold to the highest bidder!

"Our extensive research tells

• Expanded perishables departments

No mention of technology but the strategy

The goal of generating business value raises the bar on

Leadership, tempered with appreciation

“Aligning business and information-technology

Strassman, Paul A., “Five Steps to Improve Your Information Productivity”

What are you waiting for?

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