by Neil Ward-Dutton

All departments are not the same

Feb 27, 2011
CareersIT LeadershipIT Strategy

After many years, when the concern of IT-business alignment seemed to grab the imaginations of IT leaders, it appears there’s now a bit of a backlash against the idea that IT needs to be aligned with business. Any pundit or consultant worth their golf course membership now has a standard rebuttal: “Talking about IT-business alignment is silly – IT is part of a business, it’s not something separate!”

Many will go on to say something like “nobody talks about aligning finance with the business, do they? Well why do we talk about aligning IT with the business, then?”

Well, I hate to be the one to break it to anyone who’s fond of chucking that particular logical hand-grenade into a discussion, but this kind of thinking is too simplistic, and not helpful. Here’s the short answer: we need to keep talking about aligning IT with business because, although the theory seems simple, the reality of the situation on the ground is much more complicated.

Let’s make a comparison between IT and finance functions, because the differences are quite instructive. In two senses, the comparison between IT and finance is a fair one.

After all, both functions are typically mostly managed within the confines of one department and both functions have some kind of end-to-end view of how the rest of the business works.

But there are also a few ways in which IT and finance very different. Most people in any business have very little to do with finance in any direct way. The closest they’ll get to interacting with finance is filling in a monthly timesheet or expense form.

In the vast majority of today’s organisations, almost everyone’s role is pretty intertwined with the services and technologies that the IT team enables.

When it comes to specifying what the finance department does, or how or why they do it, managers and executives from other parts of the business play a very limited role indeed. In most cases, regulation stops anything creative happening anyway.

The same, by the way, is true of almost every other functional department too. You could argue that HR is a little different. But even in comparison to HR, the extent to which managers and executives from other parts of the business influence and control what the IT department does and how it does it is a world apart.

Finally, the practice and role of finance within a business doesn’t change all that much over time — especially when you compare it to IT.

Why am I going to all this effort of contrasting IT with finance? The answer is because I want to illustrate how the dynamic between IT and the business is fundamentally different than the dynamic between any other individual department and the rest of the business.

Here’s the core of the issue: although IT outcomes are increasingly pervasive within business, IT provision has to be seen from a different perspective. Not only is IT provision not universally spread out across business teams and functions where the outcomes have impact, but it shouldn’t be distributed in that way, either.

This is a dynamic that’s not found anywhere else on an organisational chart.

You can, of course, take Nicholas Carr’s position as espoused in his popular books IT Doesn’t Matter and The Big Switch that it just doesn’t make sense for IT to be provided within organisations at all, let alone for its delivery to be overseen by a dedicated, centralised team of specialists.

But Carr and others either miss or intentionally avoid an important point — which is that although much raw technology may be becoming commodity infrastructure, the way in which it’s applied to drive business efficiency and growth has to be different from business to business.

It depends on the shape and size of the business in question, as well as the prevalent culture of the organisation and the dynamics of the management team.

The reason why at least some centralised delivery of IT services and capabilities makes so much sense is the importance of governance. IT governance has to be centrally co-ordinated, because it’s the foundation practice that enables a sustainable link between IT provision — increasingly distributed and federated, even though the fantasies of the Cloud crazies are likely to remain unfulfilled for decades – and ever-more-universal IT dependency.

A sound IT governance practice is absolutely vital to understand and put in place for four reasons:

– The complexity of the interrelationships that commonly exist between IT systems and business systems. – Businesses in general now depend utterly on the health and functionality of IT systems to function, but the actual level of integration between IT capabilities and the other parts of a business tends to be pretty poor. – The most crucial parts of IT since the 1970s have been software based elements that deliver more value the more flexible they are. – IT is complicated and doesn’t die or get replaced very often. There’s a kind of natural entropy in business use of IT that left unchecked makes progress ever more difficult over time.

The importance of a solid IT governance practice in helping businesses deliver sustainable value from their IT investments over time, through change after change after change, is just one reason why we need to keep talking about aligning IT with business.

I’m happy to be the one unfashionable guy ranting to himself in the corner. But am I alone in this? What’s your view? I’d love to hear your thoughts. Write them in the comments box below