Whitepaper
Business-IT Management - Meet Business Expectations for IT
Meeting the Business-IT Management Challenge
Today IT departments face manifold and conflicting demands. Business expects IT to deliver on key initiatives to support core business strategies – initiatives such as integration of company acquisitions, globalization of operations, transformation of business models and compliance with regulations. At the same time business requires high-quality, low-cost IT services with a minimum level of risk. And IT is to be agile, flexible and on top of technologies and trends to keep ahead of the market.
But the expectations do not stop here. Business expects good governance of IT with a place at the table when decisions are made. It demands transparency over how IT budget is spent wanting to understand benefits, cost drivers and risks to support so that they can make sound business decisions.
This means that IT needs to be run like a business, for the business and be transparent to the business. Business, as a customer of the IT department, must be delivered to reliably and its expectations well managed using clear roadmaps and reliable intelligence. This is the challenge of Business-IT Management.
So how is this challenge being met today by IT departments? Apparently badly. The tales about IT project failure are legendary and dramatic. But it is not just a question of project delivery. Business perceives IT is not being involved enough in understanding their strategies and not being transparent concerning risks and costs to IT services.
"While technology is very important to firms, IT is not expected to meet, nor does it succeed at meeting, the technology needs of the business. To close this expectation gap, IT organizations will need to set a base-line understanding of how IT is perceived in their own firm, communicate more effectively with business peers, and forge a more sharply etched partnership role that will move them closer to becoming a BT (Business Technology), not an IT, organization." - “The Business-IT Expectation Gap”, Forrester, Inc., Alex Cullen, November 7, 2008
Why Does IT Fail To Meet Business Expectations?
The failure of the IT organization in meeting business expectations does not have one single cause, but various that all need to be addressed if the situation is to be changed. First of all, management of the supplier-customer relationship between business and IT commonly lacks consistency and process. Communication fails as business management does not succeed in communicating its strategies and priorities and does not understand where IT strategy (if perceived as a strategy) has originated. Often business and IT do not even have a common terminology for and view of IT support. Also road-mapping capabilities are missing to efficiently synchronize business and IT activities. The result is a failure to manage business expectations on IT delivery and to communicate the effects of changes to business strategy on IT plans.
The second problem is found within IT itself. It is lack of transparency of the IT landscape and how it supports business – i.e. which processes, capabilities, locations and organizations are supported by which parts of IT. This leads to a don’t-change-a-working-system attitude causing a lack of flexibility in IT to business demands, a bloating of the application and technology portfolios and their associated costs, and project failures as due to conflicts and impacts not seen during planning. The same lack of transparency means that IT cannot provide business with clear KPIs on the costs of and risks to IT services which frustrates business leaders and leaves them to decide on instinct and not on fact.
Lastly, and probably most importantly, integrated IT planning processes that ensure business and IT communicate regularly, clearly and with responsibility are missing. They also provide transparency for all stakeholders on strategy, demand status, project status and investment decisions. They ensure that roadmaps and information on the application landscape and IT infrastructure are always up to date so that business and IT are synchronized and informed for decision-making. The importance of integrated IT planning processes in ensuring IT delivers on business expectations cannot be underestimated.
The answer – Business-IT Management
Business-IT Management comprises a set of core capabilities to sustainably manage and ensure IT’s contribution to the business value. Essentially, Business-IT Management aims at planning and monitoring the performance of IT support throughout its entire lifecycle – ensuring that business strategy and demands are completely understood, prioritized and executed on and that the costs, quality and risks to IT support are known and considered during decisionmaking. It is a facilitator to the team of planners, strategists, architects and portfolio managers in the CIO office enabling them to transform business wish into successful projects and reliable operations. The core capabilities of Business-IT Management are:
- Business Relationship Management
- Enterprise Architecture Management
- IT Planning
- IT Financial Management
- IT Risk Management
Following, we will look into the details of these five capabilities to analyze their role in delivering best-practice Business-IT Management.
