I have worked with numerous large-scale corporations and government agencies over the years and the level of disconnect between IT program investments and business objectives seems to be escalating to an alarming level. IT is spending more and more money on programs that are seemingly disconnected from business strategies and underlying objectives. Most of these IT investments target underlying technical architectures and all too often ignore the data and application architectures that actually deliver value to the business and its customers.
Consider an example where a large systems integrator was engaged in IT architecture transformation work in excess of $250 million annually. This budget figure did not represent the entire IT budget but it did represent the vast amount of program-specific investments in application systems and underlying data. At the same time, the business was facing cross-business unit transformation demands that would definitely impact these same application and data architectures, yet these business transformation objectives were not being addressed by annual IT investments. Most concerning was the fact that key business stakeholders had no idea as to what value existing IT investments would deliver or why business demands were being ignored.
This example represents a significant disconnect between IT investments and business strategy. My experience has shown that this degree of disconnect is not an exception but more the norm at businesses large and small. When the gap between IT spending and business value delivery is large, it derails a business’ ability to deliver customer value, ensure regulatory compliance, stave off competition, and deploy new or updated business models. Opportunity costs skyrocket, while business agility sinks.
When it comes to business / IT disconnectedness, the root cause issue is often overlooked. First let’s state the obvious; IT is never shy about filling a vacuum. Regardless of the investment monies granted an IT organization, IT will find a way to spend that money. If IT is unclear as to the scope and business impacts associated with a given strategy, it will make a best effort to deliver a solution and fill the remaining vacuum with platform and language migrations it views as essential infrastructure investments. Inadequate understanding of business objectives and related impacts, coupled with the inability to define the scope of those impacts, is at the heart of misdirected IT spending and failed attempts to deliver business value.
The root cause of this escalating challenge can be tied to the fact that most businesses lack a clearly articulated perspective as to what they do, the vocabulary they use, and how they frame stakeholder value delivery. Businesses tell IT to fix a system or deliver other results with little indication of business impacts. All too often, the same requests come in from multiple business units, with conflicting or overlapping demands, using a variation of business vocabulary. Collectively these disparate requests are tossed over the wall to IT to decipher, setting up IT to fail regardless of the degree of IT maturity. Costs escalate and programs and projects miss the mark, again and again.
This lack of business perspective and overall scope is not an IT problem; it is a business problem that is passed on to IT to solve when IT is in no position to do so. So how can businesses address the challenge of misdirected IT investments? Businesses must deliver business objectives to IT along with clearly framed impact analysis on customer value delivery, business units, stakeholders, and business capabilities. With this clearly framed impact analysis in hand, IT can quickly associate capability and related business architecture impacts on current state application and data architectures and concurrently frame target state solutions.
If you are a business executive frustrated with IT’s inability to cost effectively deliver business value, perhaps you need to look at your own organization before laying the blame entirely on IT. If you are an IT executive tired of getting hammered by the business for spending too much and missing the mark on program after program, it is time to request or even mandate that all business objectives and related investments be framed in terms of a clearly articulated business architecture impact analysis.
Either way, it is time for IT to demand clarity from the business and for the business to step up to the responsibility of providing this clarity. Until that point in time, IT and the business can expect to keep getting the same results.
The Art and Practice of Business / IT Architecture Transformation 