Alignment of Business and IT Strategies
IT has grown to be one of the most critical departments within any organization. As such, businesses today are placing higher technical investments, due to the promise that new technologies are bound to enhance productivity, boost workflow, and reduce costs. However, for companies that have not realized these benefits, alignment of business strategies with technical infrastructure becomes an afterthought, which has been researched to have negative implications on the business.
Misalignment may come about as a result of IT departments not having a clear understanding of what the business needs, leadership being content with legacy systems, leadership not understanding the value IT brings or IT decisions being made separate from business decisions. Cotgreave (2017) explains that alignment drives growth while reducing risk by increasing a business’s profitability, productivity, efficiency, and market share. For this to occur, a business may require to carry out a Strategic Business Analysis to recognize how to bridge this gap.
Another negative impact of misalignment is the emergence of missed financial projections which may show up poor performance. Stalled growth is another negative impact that comes as a result of a lack of the required efforts to sustain profitability. Reactive spending and duplication of initiatives may also become evident due to the lack of a clear vision and budget for the various sectors in the business (Cotgreave, 2017). Lastly, decreased profitability in comparison to the competition may slowly start becoming evident within the business. An example of a company that failed to implement this was Kodak. The company’s management failed to admit that the digital disruption was here and that they needed to shift gears in a way that aligned both the business’s strategies and the growing need for more technology infrastructure (Anthony, 2016). The company ended up filing for bankruptcy in 2012.
References
Anthony, S. D. (2016, July 15). Kodak’s downfall wasn’t about technology. Retrieved from https://hbr.org/2016/07/kodaks-downfall-wasnt-about-technology
Cotgreave, D. (2017, November 28). Align your IT and business strategy…or else! Retrieved from https://www.cio.com/article/3238844/align-your-it-and-business-strategy-or-else.html