While few would still doubt the need and importance of Business–Technology (or IT) alignment (BITA) in the new economy, gaining an insider perspective on BITA from a cross-section of viewpoints may be a credible barometer to ascertain its place among the myriad of concerns and priorities afflicting a typical enterprise. In the earlier chapters, we discussed the evolution of BITA as a driver of enterprise success in the digital age. Now let us look at how some real organizations view BITA and the factors influencing it.
I approached a select but insightful set of people from both Business and Technology backgrounds with a simple questionnaire seeking their views on critical factors influencing business in the digital economy. This set was constituted of folks from different industries. The individuals contacted were from the senior and middle management rungs of Business and IT streams in organizations that have already made deep digital inroads (Figure 5.1).
Figure 5.1 Survey respondents
In this chapter, I am presenting a consolidated view of the responses received. Given the profiles of the people who responded I consider this a reasonably accurate and tenable assessment, which can be extrapolated to represent a credible picture. I have only considered responses from individuals who are deeply associated with driving digital initiatives and have achieved a certain degree of success in their ventures.
The charts simply rank the various attributes in their order of importance as scored by the respondents, and there is no attempt to slice and dice the data to derive inferences which may be open to interpretation. I am presenting the questionnaire that was used in this survey later in the chapter, and I encourage you to run this among the key people in your organization to create similar charts for your unit. This may provide some useful tips that may help as you work your way up.
These charts are not intended as a rigid benchmark to be necessarily aspired by your organization. They are statistical derivations. At best, they can provide you broad guidelines. Your individual situation may well be different and yet be good. That said, I do believe that if you are reading this book, you probably place a high importance on BITA. If the results of the survey sharply contradict this view, you may like to mull over this and prepare a plan to pull it up.
What Creates Market Differentiation?
The first part of the survey was to determine the critical differentiators in the new economy. Surprisingly, the usual suspects that one would associate with differentiation in the old economy, namely speed, brand (reputation), service, and pricing also emerged among the top differentiators in the new economy. Features like geography/coverage and logistics were considered too tactical (and location-specific) while people practices and ethical business conduct were considered too foundational to be included and hence were dropped from the list. In the end, we had six key items, which included three new entrants: innovative offerings (which encompassed a dare-to-try spirit), customer experience (which replaced customer service) and of course, Business–IT Alignment (which as we saw did not figure in any significant way in determining the course of business in the old economy).
The respondents, from both Business and IT streams, were asked to give a score of 1–10 against each of the six attributes in terms of its potential for creating market differentiation, 1 being no-impact-at-all and progressively increasing in order of importance up to a maximum of 10. It may be noted that the responses here are from an internal company view and not the end-customer perspective (Figure 5.2).
Figure 5.2 What creates market differentiation in the new economy
As with all surveys, we did get some surprises. For example, consistency and quality of customer experience were rated significantly higher by the Business than by IT in terms of its potential for creating market differentiation. While IT may consider customer experience a hygiene factor, Business places higher importance on this attribute as a market differentiator. On the other hand, IT puts higher emphasis than Business on speed-to-market, at least in spirit. Whether it gets translated into aggressive delivery schedules is not clear from the survey, but at the very least, this points to a heightened sense of urgency in IT to deliver quickly.
It is no surprise that innovative offerings is rated as the most critical differentiator in a rapidly changing business world, which is increasingly dominated by technology. Business–IT alignment is ranked as the third most important factor for creating market differentiation in the new economy, coming narrowly after customer experience. In my view, this says a lot about the pace at which the contribution of technology functions in ensuring business success has grown in a few quick years.
Example 5.1
The power of BITA to create market differentiation is a lot more pronounced in the new economy as IT-enabled solutions like Big data and mobility have come to rule the business landscape. One of the respondents to the survey, a banker, had an interesting tale to exemplify this. The bank being referred to is a large financial institution (FI) providing personal banking, insurance, home loans, and credit cards for the individual customer and a host of merchant banking services for business enterprises. The various units of this FI, however, might as well have been different companies, for there was no common denominator in their operations. The customers of one unit were complete strangers to the other units. There was no common thread that tied together the experiences across different units. Someone who had availed a home loan from this FI and expected to be recognized, let alone be rewarded, when they took insurance for their car was in for a big disappointment. Other than earning the displeasure of the customers, this was also causing the bank to miss out on a substantial cross-selling opportunity. Everyone knew about this problem, but the cry that rang through the portals was a dismissive “what can we do?”
This issue eventually came up in one of the board meetings, and it was decided to take a crack at the problem. The leaders of the IT and Business units were summoned. As a first step, a central governing group was created, tasked not with operations but with identifying cross-unit potentialities. The group focused on amalgamating information (transaction records) of the last three years from different units. The intelligence gathered was instrumental in grouping customers into demographic segments to support sales and campaigns across units. This was achieved by analyzing all the amassed data using Big data analytics.
The close interworking between the Business and IT teams did not end here. The teams next worked on targeted product and service offerings to customers by implementing software that could segment the customers based on their preferences and history. The system was also open to inputs in the form of social media feeds to analyze customer sentiments and opinions and identify key influencers across the lines of business.
These actions generated a visible wave of excitement and optimism among the internal stakeholders, which I am sure was shared by customers approaching the bank for different types of services.
BITA is the hidden force that is behind many a success story in the digital economy. Even a relatively simple project, like putting a new feature or changing the user interface on a mobile application, run collaboratively between customer teams and IT could produce vastly different business results. I am therefore entirely in agreement with our survey on the high importance of BITA as a factor for creating clear market differentiation. Are you?
Why Does Business–IT Alignment Matter?
There was a consensus among folks I met that BITA mattered in the new economy. But why did it matter? What were the expected outcomes of BITA? We agreed on a set of reasons as the motivations for enterprises to embrace BITA and asked the respondents to score them on a similar scale of 1 to 10, where 1 signified the least impact of BITA and 10 signified maximum impact. There were wider variations between Business and IT on this question, but both agreed overwhelmingly that the effect of BITA on improving customer experience was the highest. No surprises here. Overall, Business was more upbeat on the impact of BITA on almost all the selected parameters than IT. Significantly, the old-economy attribute of cost control ranked the lowest among the motivations for embracing BITA, and on this specific parameter, there was a very close agreement between Business and IT. This does not mean that cost optimization is not expected to result from BITA, but that it is not the primary reason people are embracing Business–IT alignment within their organizations (Figure 5.3).
Figure 5.3 Why does Business-IT alignment matter
The impact of pervasive BITA in influencing the customer’s overall perception of the company is apparent here. Regardless of the size and nature of your business, BITA is your best bet in the digital economy.
Example 5.2
This incident was narrated by a senior IT Project Manager from a very reputed software services firm (let’s call it SSF), who participated in the BITA survey. A year ago, one of their U.S. clients had visited their development facilities in India to evaluate SSF for a new project. SSF was one of the four shortlisted companies whose centers were being visited by the client team during the week. The day started at 10 a.m. with the arrival of the client at the facilities where the traditional Indian welcome of garlanding and lamp lighting was accorded. The client team was cordially escorted into the swanky facilities, which had a space-age conference room laden with refreshments of a wide variety. No detail was overlooked, however trivial. The client team, led by the director of engineering, was here introduced to the top leadership of SSF, which brimmed with an eagerness to serve and an unshakeable bonhomie. After this, the client team patiently sat through some impressive PowerPoints on SSF’s people and processes, success rate, client testimonials, the works.
After lunch, which was sumptuous, the client made an unexpected request which threatened to deviate the proceedings from the choreographed routine. This client had recently acquired another company (let’s call it AC2), which was also a client of SSF. The director of the client company asked if they could visit the dedicated development center that SSF ran for AC2 and interact with the team members there. Some murmurs ensued regarding lack of notice, client security, and confidentiality but in the end, the request was ceded.
What followed was an exemplary show of conduct that brought a major twist to the story. As the client team walked into the AC2 delivery center, which had not been alerted formally, there were some mildly curious glances, but otherwise, it was business as usual. The director of the client team stopped at a corner desk where a young lady was contemplatively sitting at a workstation with two screens. He spoke to her directly. Asked her first about who she was, her experience, and role in the project. It turned out she was two years out of college and was an Associate Software Engineer assigned to the AC2 project. The client asked her a series of questions relating to the project and how her work fit into the larger picture. She gave a detailed and accurate answer to each question and spoke about AC2 the company, its mission, the various touchpoints, and the processes for staying in sync on the deliverables and dates. As the client later confided, he was completely taken in by this young engineer’s in-depth and contextual understanding of not only the project, but the business of AC2, perhaps beyond her designated charter, and this swung the deal in SSF’s favor.
All the sales and marketing effort, swanky facilities, affirmations of top management, and impressive track record of SSF were rendered trivial before this display of close alignment of the company’s engineering (Technology) function with the customer’s business, which was apparent at the working level. As the customer wrote later in his testimonial, “The sense of urgency that the SSF team displayed across the board not only fixed problems for us quickly but prevented a lot of them from surfacing. This team worked with minimal supervision and knew exactly what our customers expected. We had no hesitation at all in going back to them when we embarked on our expansion project lately.” The grandest sales effort can only bring the customer to your door. However, an emotional connect that culminates in building a long-term relationship is squarely the preserve of BITA.
What Drives BITA in an Organization?
The third question of the survey was directed at determining the factors that need to be institutionalized in an organization aspiring to a high BITA. In arriving at the list of choices, we excluded intangibles like mindsets, Business/IT competence, attitudes, and situational behaviors, simply to retain objectivity in the evaluation, and not because they are considered any less important for BITA. In the following chapter, we will introduce the seven dimensions that cover all aspects that matter for BITA. In the book Mastering the 7 Dimensions of Business–Technology Alignment1 by the same author, their ramifications are discussed in greater detail.
The agreement between Business and IT was the closest in this question, on almost all the listed factors (Figure 5.4). Both Business and IT gave equal importance to leadership example and role modeling as the factor with the maximum potential to enhance BITA in the organization. It is indeed hard to imagine a BITA-powered environment under a listless leadership. As we have said before, BITA must be driven from the top, reinforced at every possible opportunity, and led by example.
Figure 5.4 What drives BITA in an organization
Closely following this, and entirely on expected lines, was Business-aligned IT roadmap. All it takes to arrive at the best IT roadmap is to use the business strategy as its foundation and include Business in the preparation. The most common, and frequently overlooked, reason for business failure in the new economy is an IT roadmap that is not supportive of future needs of the business.
The Digital India movement is a case in point for illustrating the impact of leadership example and role modeling. India has a growing necessity to streamline the availability of government services to its citizens, through digitization and high-speed Internet connectivity, which the Digital India project aims to provide, particularly to large sections of the deprived population in rural areas. The DI project also envisages rendering broader market access, e-health, and e-banking services to millions, which would benefit communities through higher empowerment, and finally an opportunity to reskill the youth to drive digital literacy and create more options for employment. All in all, Digital India project is firmly on the critical path of India’s progress.
It was only on being articulated and reinforced by the top leadership of the country—no less than the Prime Minister—that the rubber hit the road. If the PM and his senior ministers did not emphasize this initiative at every available opportunity, driving home its advantages to all and sundry, the project would have been a nonstarter. As I write this, a lot is taking shape on this front. I hope to see in my lifetime the benefits of this program reach all parts of the country, including its most disadvantaged sections, bringing about a significant and measurable improvement in the quality-of-life index and the level of empowerment enjoyed by all. The most significant factor behind its eventual success would undoubtedly be the role of the country’s leadership in focusing the attention of the government machinery, industry bodies, institutes of learning, and the common man alike to make this a personal mission.
If leadership example and role modeling can energize a nation of 1.30 billion, think of what it can do for your organization, which has a much higher proportion of highly erudite folks routinely achieving the impossible! A spark from the leadership would go much farther in igniting the fire of digital transformation across your organization. Unfortunately, the converse is also true. The fire would fail to conflagrate without that spark, and the enterprise would quickly degenerate into cold embers, only useful for future case studies that caution against following its example.
.jpg)
The survey form and analysis tool can also be downloaded from www.alignedtowin.com