Best Practices
• 7 min read
How CIOs can Ensure Business-IT Alignment (BIA)
6th July, 2022
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Earlier, the IT department operated independently of other functional divisions and was regarded as a cost center. But as organizations began to shift to a digital-first mindset, IT departments are being considered strategic facilitators, impacting corporate strategy, security, investments, and overall business practices.
Business-IT alignment effectively uses a company's IT resources to accomplish the organization's business goals. In a strategic sense, it is a method for predicting the company's future information technology requirements, ensuring that it will be ready to address the challenges posed by its rivals.
In terms of purpose, it is a method of allocating information technology resources across the entire company, similar to how other assets are allocated.
In terms of day-to-day operations, it refers to a procedure for optimizing the performance of information technology to ensure that the business continues to function without disruptions.
Information technology is altering the way in which companies organize their business processes, connect with clients and potential customers, and provide services. Effective and efficient alignment of how IT supports business strategy and procedures is crucial to a company's success.
The necessity and usefulness of aligning business requirements with IT capabilities are well accepted and understood. Yet, companies face challenges establishing it.
Significance of Business-IT Alignment
IT and business professionals are unable to collaborate effectively due to differences in goals, cultures, and motivations, as well as a lack of understanding of the other group's expertise.
In most cases, the gap results in high-priced IT systems that fail to justify the expected ROI.
As a result, efforts to improve the business value of IT expenditures are directly linked to the quest for Business and IT alignment.
Concerns like these are common in businesses that don't have their business and IT well aligned:
Projects driven by information technology do not satisfy their time or budget limits.
The investments in IT do not provide results.
Uncertainty over the areas in which IT strategy and principles should be applied.
The capabilities of IT are insufficient to satisfy the demands of the company.
The organization has difficulty meeting compliance requirements.
Inadequate security control implementation.
Inability to optimize IT budget utilization.
To achieve business-IT alignment, companies must make smarter decisions that consider both business and IT disciplines. Establishing decision-making and control mechanisms is essentially what the term "governance" refers to; therefore, business and IT alignment are strongly tied to IT governance.
Ultimately, the value must come not only from the selected IT tools and solutions but also from how they are implemented and utilized within the organization. Implementing IT to realize its full commercial value potential entails not just technical components but also organizational change management.
Business-IT Alignment Cycle- An Effective Method for Achieving Business-IT Alignment
Business-IT Alignment Cycle is a basic concept that organizations may use to create alignment.
The four stages of the cycle are plan, model, manage, and measure.
To ensure that IT and business objectives are aligned, the cycle promotes organization-wide shared expectations between business and IT.
The cycle also establishes best practices and common processes across and between IT functional groups to ensure that IT/business alignment is sustainable and scalable in the long term.
Plan- Bridge the Gap Between What Business Management Requires and Anticipate from IT
IT requires an ongoing discussion to understand business requirements in order to reduce the gap between what business expects and what IT delivers. IT may not be able to establish which IT services to offer or how to properly manage IT resources to maximize business value without ongoing communication.
Additionally, as business demands evolve, IT should adapt and modify its service offering and IT resources as needed.
CIOs should require the implementation of a rigorous service level management procedure that results in agreement on specific IT services and service levels required to meet business goals.
The fundamental principles and priorities that empower and lead IT resources can subsequently be translated into service definitions and service levels by IT management.
Finally, IT needs a method for measuring and tracking both business-level services and IT support capabilities.
Model- Design Infrastructure to Optimize Business Value
Find out what resources are needed to provide IT services at the service levels promised. IT assets, processes, and resources are mapped back to IT services during this phase. Then, resources that support business-critical IT services are prioritized and planned.
In the end, you can tell how well alignment works by how much IT is working on things business leaders care about. This means that IT must have ways to decide which projects, tasks, and support are most important.
In order to distribute resources effectively, IT needs a service impact model and a single repository for configuration and asset management. This mix is needed to plan, set priorities, and consistently provide services at agreed-upon service levels while keeping costs down.
Manage- Drive Outcomes Through Centralized Service Support
CIOs may ensure that their organization meets expectations by allowing business users to submit all service requests in a single location and prioritizing those requests based on pre-defined business priorities.
It is difficult to manage resources to reach agreed-upon service levels without a single point of contact. Furthermore, the IT team risks failing without a technique for successfully managing the IT infrastructure and any modifications.
To ensure the service desk's efficacy, the IT staff must provide:
A mechanism for prioritizing service requests according to their impact on the business.
A method of change management that is structured in such a way as to minimize the possibility of adversely compromising service level obligations.
A management system for IT events that can monitor and manage the components that underpin mission-critical services for an organization.
The fundamental operational measures that make it possible to deliver services at the levels that were promised, in addition to the tools for assessing and tracking the progress of service level promises utilizing these metrics.
Measure - Enhance Operations and Check Commitments
This phase increases the visibility of operations and service level requirements across the enterprise.
Traditional IT management technologies operate in functional silos, restricting data collection and operating metrics to certain functional areas. Typically, they are more concerned with technological objectives than with business objectives.
Component-level metrics and measures are certainly crucial for maintaining continuous service availability.
To enable real-time resource allocation decisions, these indicators must be reviewed in the context of the entire organization, specifically in relation to business-critical services.
Isolated functional groups cannot get a holistic perspective of IT services that support business objectives without a business framework for reviewing measures and KPIs.
CIOs can structure the entire business to produce systematic improvements that overcome challenges by committing to the cycle and integrating and automating processes with technological solutions.
Major Roadblocks to Business-IT Alignment
IT/business alignment has been explored for over a decade. Yet, despite understanding the importance of IT/business alignment, achieving it is still an issue in many companies.
Challenges preventing companies from achieving successful Business-IT alignment are:
Lack of Communication and Collaboration
Lack of communication and collaboration prevents companies from aligning IT and business goals. Alignment is difficult if the company makes technological decisions without IT's input or if IT makes business decisions without the business.
Uncertainty over IT's role as a business enabler. Companies should realize how important IT is to the success of a company.
Lack of long-term Vision
IT teams must constantly adjust to ever-changing technology. Some business leaders, however, don't quite grasp the need for ongoing investment on the part of the company.
Inadequate Implementation of Modern Technology
In many cases, the technology itself acts as a barrier to IT/business alignment; this happens when companies use outdated business software and apps. The old system's maintenance requirements and inflexibility constrain the IT department, preventing them from giving innovative solutions to the business.
Resource Deficit
Many IT departments are either understaffed or lack the necessary resources to be productive. Due to their regular overwork, they do not have the time or energy to focus on key business challenges. The two most common barriers to aligning IT with the core business are a lack of resources and a strategic plan.
Still, using Outdated Spreadsheets? Reconsider Your SaaS Management Practices for Achieving Business-IT Alignment in True Sense
In spite of the fact that business and IT alignment is becoming an increasingly important issue for numerous enterprises to improve business visibility and efficiency, they still risk suffering severe repercussions if the business strategy and the IT strategy are not aligned.
SaaS is a promising technology for generating business value. The most significant benefit of using SaaS is that it is subscription-based, and it helps companies save money and time on a wide range of tasks by simply automating and streamlining them.
Despite the fact that SaaS applications can improve the alignment of IT and business strategy, the lack of control and visibility on how this very “SaaS stack” is managed can present significant challenges to achieving the desired business-IT alignment.
The reliance on SaaS tools to keep business operations up and running is skyrocketing by the day. More and more advanced tools are coming and being adopted, yet, companies still rely on outdated spreadsheets for managing their SaaS stack.
Though with all its goodness, SaaS brings financial, security, and compliance risks to organizations. Issues like SaaS sprawl give rise to shadow IT, security risks, financial risks, compliance issues, and SaaS wastage, preventing you from having the desired alignment you seek.
Zluri Can Help you Achieve Your Business-IT Alignment by
Discovering your organization's SaaS subscriptions:
Discovery is the first step toward effective SaaS management. Zluri, with over 2,25,000 SaaS apps, has the largest app library in the world. It uses five discovery methods to find 100% of SaaS apps in your organization: SSO, finance, and expense management systems, direct integration through APIs, desktop agent (optional), and browser agent (optional).
Upcoming Renewal Monitoring
With Zluri, you don't need to worry about surprise renewals. Zluri alerts about your upcoming renewals, giving you enough time to decide whether or not you need the app.
Zluri enables you to manage all your renewals by creating an approval process that reduces unnecessary spending.
You get a renewal calendar that shows all the upcoming renewals and contracts in one place. You can set 30 days (or custom) email alerts for renewals. This ensures you never miss an upcoming renewal and that all the services are always up and running.
Applications Cost Optimization
Zluri helps you standardize your applications and eliminate budget wastage. Zluri traces your SaaS ecosystem and monitors, measures, and helps you take control of your SaaS spend. It also helps you find the hidden apps spend.
Zluri has a powerful automation engine that enables organizations to give or revoke access to employees with a few clicks.
Further, its contextual recommendation engine provides information about which applications a new employee needs, based on the department and seniority of their role. It also recommends different channels/groups to which an employee should be added.
This takes the burden of manual onboarding and offboarding from IT’s shoulders, so they can focus on more important tasks.
Smooth Vendor Management
Zluri maintains a SaaS system of record by integrating with your core business system. Zluri acts as a single source of truth for vendor contracts and gets you easy access to metadata that allows you to cut down your software spend and increase overall ROI.
You know how many contracts you have signed with them. How many of them are active, and how many have expired. Additionally, it helps with mitigating SaaS vendor risks.
With Zluri, all your contacts are stored contextually with other vendors' information so that you can access them when required: during renewals, audits, termination, etc. If you have bought multiple apps from a single vendor, you can negotiate a better deal with the help of Zluri.
About the author
Sreenidhe is a SaaS management expert and has a keen interest in ITAM and SAM practices. She is adept when it comes to SaaS Vendor Management and SaaS Spend management. Her knowledge of SaaS and SaaS management is self-thought and is based on a lot of reading. Before joining Zluri, Sreenidhe was working as a full-time journalist. She is also equally passionate about fashion and aspires to own a boutique someday.
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