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Convergence of IT and Business: Are you there yet?

There has been a lot of talk in the last decade or so about IT and Business "alignment". But no one seems to actually achieve this elusive goal.  Why?  Because "alignment" is actually only the first step in achieving a higher level of coordination in what I call IT/Business convergence.   

In the alignment stage, IT is still in a support role.  Always playing catch up to what the business wants to do.  This is actually where most IT departments are today.  So what does this stage look like?  It is where IT is still stuck in the old siloed structure with every department within IT having their own little fiefdom.  What I mean is most companies still have their "Desktop", "Security", "Network", and "Server" groups and they rarely talk to one another.  And when one group needs something from the other it takes forever to get it done.  The consequence of having these functional silos is that the infrastructure becomes hard to change - the more hard-coding you add to the infrastructure, the more rigid it becomes.  Some of the challenges look like this:Blog

    1.  Lack of scalability, inflexible (hard and slow to change)
    2.  Costly to implement and maintain, hard to work across groups
    3.  Changes to the infrastructure can cause unintended consequences in what becomes
         a "brittle" environment

I have seen some companies actually try to optimize each and every silo in this current model.  This NEVER increases business agility nor does it change IT's operating cost dynamics.

The next stage is "synchronization".  Here is where IT plays a more active role in "how" the business should operate.  For instance, how the company manages its supply chain, improves efficiency, goes to market, or introduces a new product.  At this stage I've seen companies that start to get how to be enablers of the business.  They are in the process of re-architecting their IT to adapt to the rapid pace of business change and become more of the operational component of business strategy and success.  Here is where I see companies focusing on responding faster to changing business needs by improving the ability to quickly integrate and deliver applications, data and work flow that support new business requirements.  Companies use IT to monitor business performance and speed the business's operational adjustments to market changes and supporting policy-driven actions.

The final stage and Valhalla to some, would be the convergence of IT and business.  At this stage the business model is so intertwined with IT that there is no separate orientation.  IT has become part and parcel of management's vocabulary.  I've worked with companies in the past like this and the one thing that they have in common is that they are very much in tune with the global economy, and are playing a significant, leading role in terms of new business models and innovation, and are very much converged when it comes to business and technology.  One common theme among these companies is that they take a very holistic viewpoint towards technology.  They have a very dynamic IT environment.

So how does a company reach this convergence level?  It's a matter of management maturity.  There has to be a vehicle for measuring that maturity. Not technology or business maturity, but a holistic maturity that looks at organizational and governance structure, at the way companies make IT investments, at enterprise architecture, overall strategy and planning.

One thing that I have seen in the companies that have matured in the way I described above is that the traditional CIO (or insert the name of your head of IT here) role has changed.  That role is not about technology, but a business role that is focused on improving processes by using technology.  Your company's head of IT can't be a supporting role.  It has to be very holistic because at the end of the day the CIO is responsible for the information and processes. So how can they be just a supporting role?

I'm known for saying this many times in the past - that any company for whom technology is a strategic enabler will become obsolete if they don't reach this convergence stage.  So don't think that just being at the alignment stage is satisfactory.  I'm not saying that companies have to be on the bleeding edge of technology to be "converged".  I've seen companies that are very early adopters of new technology and they are floundering.  Why?  They are misusing the technologies.  Two questions to everyone: What are you doing to get to that convergence level? and do you have a plan for developing a dynamic IT environment?  One method that I use is 'vuja de'.  I wrote about this a while back and how to use vuja de to be innovative and create a dynamic IT environment.

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Comments

Hi Michael,

I enjoyed your article. Thank you. It's one near and dear to my own heart. I recently wrote an article myself called, "The Traits of a Modern IT Organization," that is related.

http://www.productionscale.com/home/2008/8/25/the-traits-of-a-modern-it-organization.html

Also, I enjoy the writings at the Agile Web Operations Blog quite a lot (not mine). It's along these same lines.
http://www.agileweboperations.com/

Thanks again and I'll add you to my feeds and look forward to your posts.

Regards,
Kent

Kent,

thanks for the feedback and the follow. I appreciate it.

Thanks for sharing the other links, I'll be sure to check them out.

Cheers
Michael

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