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Business/IT Alignment

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Oh no! Not again! I can hear you think. What can possibly be said about business and IT alignment that hasn't been said before? The whole topic of business and IT alignment has been beaten to death from almost every angle. IT governance, IT architecture, IT innovation, IT performance, IT cost saving, but what about the business side? From my observation, most business and IT alignment discussions take place within IT. The business challenges IT to show their benefits, but then take a wait and see approach. This is the deal: alignment can only be successful if it comes from both sides. So, if there is an equally structured discussion taking place on the business side about how to receive the benefits from IT most CIOs have plenty of business performance indicators on the scorecards, but how many business executives manage their business with IT performance indicators? Business and IT alignment doesn't seem to be the two way street it should be. And while we're at it, what about business to business alignment? Long term success is difficult to achieve if the business treats IT in a stovepipe way. Business cases are often focused on departmental benefits only. You cold even argue that business and IT alignment should be a discussion from the past anyway. Organizations routinely outsource or co-source activities from logistics to marketing, to even research and development. A successful business today is based on a performance network of all stakeholders, such as channel partners, suppliers, innovation partners, investors, customers, and even competitive relationships. In other words, stakeholder alignment should be front and center for organizations today. I'd like to introduce 3 terms that belong together that should drive business to business alignment and business and IT alignment. These are: operational excellence, management excellence, and technology excellence. Let's start with operational excellence. In a competitive world, without efficient processes and systems, and without a lean organization, no one can survive. Operational excellence is built upon 3 main drivers: cost, quality, and speed. Optimizing cost is crucial no matter what strategy you have. The more working capital you have, the more you can invest in the company's competitive position. Creating the best price/quality ratio is essential to ensure customer satisfaction, retention, [and] loyalty. Increasing the speed is crucial to move from a lean value chain to an agile value chain. Integrating a new supplier or channel partner mustn't take months, it should be done in days. ERP, CRM, and supply chain management systems have driven significant operational excellence. And the next wave of competitive differentiation becomes apparent. This is management excellence. Management excellence is based on 3 characteristics as well: being smart, agile, and aligned. Competitive differentiation today comes from being smarter than the competition; being able to see what is happening in the market, being able to understand change and what that means to you. But, being smart can only help if you're able to act on it. Strategies, plans, processes, and organizational structures need to be flexible so that they can be fine tuned as you go along. That is why agility is the second characteristic of management excellence. Agility only works if it can be copied and applied throughout the complete value chain. If you are more agile than the rest of the value chain, you've created a sub-optimal organization. Now let's spend some time on technology excellence. I'm sure you've heard Oracle describe its own product strategy as: complete, open, and integrated but allow me to explain why an IT strategy needs to be complete, open, and integrated as well. A complete IT strategy supports all elements of the business: not only administrative systems, but also collaboration, mobile needs, consumer IT, and all other areas of which IT leads business innovation. Moreover, a complete IT strategy goes beyond the IT department. Technology excellence is a joint responsibility. Business and IT should be mutually aligned. An excellent IT strategy also needs to be open; anticipating requirements that are not even known or don't even exist today. Think of the 2.0 world where a lot of technology innovation comes from consumer IT, and businesses are simply confronted with it. For years to come, IT landscapes will only become more heterogeneous. Any IT architecture needs to be able to deal with that. Middleware is key to any good IT strategy. An IT strategy also needs to be integrated. Operational processes and management processes need to be able to talk to each other, not only within the organization but even more important between organizations in the performance network. Therefore, applications simply must be based on a service orientated architecture. And we can't separate the world of operations from BI anymore. In short, operational excellence paves the way. Management excellence provides prospectus for the future. And technology excellence drives innovation. Want to know more? Check out our work on on business and IT alignment as well as other thought leadership materials.

Video Details

Duration: 6 minutes
Year: 2009
Country: United States
Language: English
License: Dotsub - Standard License
Genre: None
Views: 69
Posted by: christineward on Nov 1, 2015

Business/IT Alignment. December 14, 2009
Retrieved from:
----- No changes have been made to the video except the addition of accurate close captioning. ----- Oracle Thought Leader Frank Buytendijk discussing Business/IT Alignment.

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