The speed of change in today’s dynamic business environment forces companies to move fast and adjust on the fly. That CIOs and CFOs are forced to take long hard looks at their IT organizations, and ask themselves: What should we be doing differently to deliver more business value faster?
In order to answer the loaded question we have to look at companies that run high performing SAP applications. These companies are laser focused on leveraging their SAP investment to drive business value, not just keeping the lights on.
When we assess an itelligence client’s SAP IT organization and benchmark against other organizations, we have to look at a range of variables, including organizational size and complexity, pace of change, IT landscape, user base, organizational structure, and more. A critical variable is IT and business alignment.
Evidence of misalignment – goals vs. reality
Consider these statistics from a recent Gartner CEO survey:
- 80% of survey respondents view digital transformation as a priority
- 80% feel innovation will drive efficiency and lead to competitive advantage
- Only 34% of executives surveyed report being innovation leaders
Another survey, from ZDNet, reports that just 16% of IT budgets are allocated to business innovation versus operations and enhancements.
These numbers highlight a gaping disconnect between CEO goals, CFO budgets, and CIO reality.
The roots of misalignment reveal the route to alignment
After implementing SAP, organizations become complacent in their approach to optimizing and enhancing SAP. An organization implements a solution based upon a point in time. And then, they neglect to continually refine, adjust, and drive additional change that aligns with business priorities.
Symptoms of misalignment between IT and the business can take any or all of these common forms:
- Poor communication
- Lack of agreement on IT’s role
- Neglect of long-term thinking
- Shortage of resources
Time and again we meet with clients who have been running SAP for years. The business approaches us, stating that IT is not addressing their needs. Our approach is simple: Get business and IT in the room and talk.
Another common stumbling block is the misperception that IT is not part of the business. Many businesses view IT exclusively as a cost center. As technology evolves, IT departments must constantly adapt to meet future needs and emerging business challenges. And that requires regular investment on the part of the business – not all business leaders understand this.
The IT talent crisis is a harsh reality for many IT departments. IT may be understaffed or simply lack appropriate resources. An overworked IT organization won’t have the time or energy to focus on strategic business issues.
Misalignment has a cost
Yes, the pace of change in business is more rapid than ever. That is not going to change. Organizations are required to increase business and IT collaboration, alignment on priorities, and their speed to implement business solutions.
Here is the typical scenario I see. IT has ideas on where they want to take the application portfolio. At the same time, business wants solutions and needs to move even faster than IT is able. So business looks for alternate solutions that are within their control. IT gets frustrated that business isn’t being engaged and the cycle continues. This is where the finger pointing begins and the process breaks down. Sound familiar?
You would be amazed at some of the very simple, yet impactful changes that organizations can make to increase IT and business alignment and drive faster change. To truly align IT and business goals, decision makers have to talk to each other, collaborate on business goals and direction, and discuss how technology – and IT – can help the company achieve those goals better, faster, and more cost effectively.
IT and business alignment is like marriage: It takes work on both sides. Sometimes a lot of work. But the outcomes are worth the effort. Increased IT and business alignment and more frequent review of where the business is heading will facilitate more efficient IT processes, more effective decisions, and better business outcomes.
Don’t let misalignment kill your company’s ability to innovate. Get your free itelligence industry thought leadership white paper: Is your IT organization transforming – or merely performing?