Bringing the Business and IT Strategies in Line

Businesses are like living organisms. They grow, they change and they (hopefully) learn from their mistakes. Businesses also have a brain. The brain of any business is the C-suite, which is charged with developing the strategic direction of the company. Most companies also have at least a basic IT strategy. But often, that IT strategy is not aligned with the business strategy. In essence, one half of the brain doesn’t know what the other half is doing - bad in humans, bad in companies, too.

On the other hand, most successful companies have an IT strategy that’s aligned with their business strategy. When it’s right, it can be a thing of beauty, like a Bach fugue or a DaVinci drawing of a machine that’s also a work of art. This month’s column discusses some of the ways companies can achieve that thing of beauty: an IT strategy that’s in sync with the business strategy.

First, I need to define what I mean when I say the IT strategy is “aligned” with the business strategy. When the two strategies are in sync, the IT department truly understands how the business operates, and the IT infrastructure supports the company’s core business processes. Further, the business keeps IT in the loop about changes in the company’s plans, goals and business focus, so that IT can adjust its support capabilities.

The first step in bringing the IT and business strategies in line is to actually understand how you do business. Take a look at your current business strategy. Does it support your current and future goals? Also, identify your most critical processes. This analysis will help you determine your information needs.

Next, conduct a current-state analysis of your information systems. The objective of this analysis is to take inventory of your existing information systems and determine how well they’re meeting your information needs. Once the current-state analysis is complete, the next step is to develop future-state vision of the IT capabilities that will help you meet the information needs you’ve already identified.

One caveat: your future-state vision must be realistic. Don’t get blinded by the glitz of the latest techno-toys on the market. Keep your budget in mind and get what you need now, with an eye toward future growth.

Once you have your current-state analysis and future-state vision in hand, it’s time to perform a gap analysis to determine how you will get from where you are to where you want to be. This will entail identifying which information systems need to be upgraded, which are obsolete and which meet your needs in their current state. It will also give you a good idea of what it’s going to cost to meet your needs.

It’s a good idea - especially in these difficult economic times - to save money where you can, but be careful because in the end, you get what you pay for. If you need a particular application, get it, and get the best you can afford. It’s a case of pay me now or pay me later.

Your gap analysis should lead to the development of a roadmap that will guide you on the way to the realization of your future-state vision. This roadmap is where the IT strategy should come into alignment with the business strategy. The roadmap will lay out, in detail, the company’s strategic direction and objectives, as well as specific tactical plans on how to meet those objectives.

It will also include a section that details the IT strategy necessary to support the company’s strategic direction. Accordingly, the roadmap must have clear goals with corresponding milestones. It must be rigorous, but it must also be flexible enough to change if needs or market conditions change.

This interweaving of the business and IT strategies accomplishes two things. First, it enables the company to understand how each area - business and IT - affects the other. More importantly, however, it keeps the lines of communication open between the two sides of the company’s brain. Open communication won’t be a panacea for the company’s problems, but if the business and IT understand each other, and each has a good handle on the other’s needs, the relationship can be more productive. A more productive relationship between the business and IT can lead to better fulfillment of business goals and a fatter bottom line.

One final thing: this isn’t a “once and done” process. Even if you’ve successfully synced up your business and IT strategies, they probably won’t stay that way. Market forces shift and business strategies change with growth. Economic conditions force difficult decisions and retrenching. The list could go on and on. To avoid nasty surprises down the road, you should periodically revisit your roadmap to see what’s changed and how your plans must change in response. It will take time and effort, but it will be well worth the work in the end.

This publication contains general information only and Deloitte Consulting LLP is not, by means of this publication, rendering business, financial, investment or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Deloitte Consulting LLP, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.