Why Business Capabilities Matterpost by Chris Curran on May 13, 2010
Guest post by David Baker
PwC’s US Advisory Chief Architect
Business and IT alignment is the holy grail of strategic planning – at least for the CIO. Imagine a world in which each and every activity over the next three years guarantees that the organization moves closer to its goals and objectives. To achieve this requires that the underlying people, processes and technologies take you in the right direction on every project – simple in concept, difficult in practice. The secret to achieving this is to have IT and the business drive enough detail into the strategic plan to enable the architects to respond with an appropriate business design.
Many things get in our ways toward this goal, but I have 3 favorites. See if they sound familiar.
I know you’ve done this before. I’ve seen it innumerable times. You’ve documented your business strategy using a clip art diagram of puzzle pieces or (my personal favorite) the facade of a Greek temple – you couldn’t resist labeling those Doric columns with your goals, showing how they support your vision statement on the capital. Sometimes this is followed by a second slide that lists a jumble of other goals and objectives including items like “We will be the least cost producer in our industry”, “We will meet or exceed all compliance and regulatory commitment”, or “We will be number one in our market”. This clip art approach to documenting a strategy is a sign that not enough detail has been generated. IT has an impossible task in generating an aligned response to such a strategy.
Just Give Me a Web Site
This barrier arises because IT has taught the business to use “IT speak“. Vendors are also part of the problem – promising simple solutions to complex needs. Frustrated business users jump immediately from their high level strategy to technical solutions. Some of my favorites include “I need a Data Warehouse so I can see all my data in one place”, “All I need is Salesforce.com”, “Let’s use the cloud” and “Just give me a web site.” The problem with this approach is that it totally misses answering the question “What business problem are we solving?”
Fire and Forget
Invariably, projects get launched and six months later someone (usually senior executives) asks, “Why are we doing this project?” or “Remind me what I get when this project is completed.” These are difficult questions to answer when you jump from a clip-art strategy directly to a set of technical solutions. There just is not enough detail available to answer those questions.
Our response to all three barriers is to ensure that the business strategy is defined in sufficient detail to enable IT to respond with the needed technical solutions. IT can subsequently justify why those projects are important and sufficiently measure progress in business (not technical) terms. We use business “capabilities” to fill the gap between a clip-art strategy and the technical solution. This means that IT needs to learn “business speak”, to capture the strategy in business terms – the operational, organizational, product, and information capabilities needed to achieve the business strategy. Ultimately, driving the business strategy to the level of capabilities forces the business to answer the question “what business problem are we solving” and allows IT to respond with an appropriate solution. That’s alignment.