5 steps to ensure business and IT strategy alignment

Businesses face fierce competition and changing market dynamics, such as turbulent macroeconomic cycles, changing customer expectations, and advancements in new technologies. Generative AI Even talent retention challenges.

These complex market dynamics only increase the expectations on IT teams to deliver solutions that improve business outcomes and Revenue growthprofitability, customer satisfaction, and employee engagement. IT teams need to deliver these solutions within tight cost management constraints.

To excel in this business environment, leaders must adopt High-Performance IT Strategy,as well as The first key principle guiding a high-performance IT strategy is coordination.

Why is coordination so important now?

According to Forrester, only 29% of business and technology decision makers believe their digital business initiatives are aligned with other internal functions. However, Forrester also found that the alignment of high-performance IT can help companies grow revenue 2.4 times.

Achieving excellent collaboration requires technology leaders to fully commit to driving the development of strategy, operations, and leadership. Excellent collaboration covers three business dimensions: strategy, operations, and leadership.

• Strategic Realignment Ensure business and IT strategies are in sync at the speed and scale of change required to achieve business outcomes.
• Operations Coordination Map the impacts to all layers of the IT operating model and corresponding investment changes.
• Leadership Coordination The entire stakeholder ecosystem requires the right individuals to be responsible for implementing the plan.

Adapt and implement one of the four IT styles

In a high-performance IT strategy, technology leaders should align their primary investments and execution with one of the following goals: Four IT styles: Enable, amplify, co-create and transform.

• this Enabling style Stabilize, operate, and protect IT organizations.
• this Co-create style Deliver new products through IT and business.
• this Zoom in style Use data, AI and automation to optimize your business.
• this Transformation style Drive IT to achieve breakthrough innovation using emerging technologies.

At any given time, leaders invest using all four styles, but one style is dominant.

For each organization, winning metrics vary depending on the dominant IT style. For example, in the enabling style, cost and margin control helps win the competition for consumers, while the amplifying style focuses on profitable growth. Co-creation focuses on top-line growth, while transformation is a combination of top-line and profitable growth. When companies transition from one dominant style to another, a higher level of calibration is required, rather than a “set it and forget it” approach to IT strategy.

5 Steps to Excellent Coordination

But achieving excellent alignment is no longer enough to win. Achieving excellent and sustained alignment requires a five-step process and constantly changing business dynamics. The path to sustained alignment also involves regular calibration, as there is never a one-size-fits-all strategy; however, the process to achieve sustained results remains the same.

1. Understand your business strategy and plan your course

Planning for high-performance IT begins with a fundamental understanding of business strategy. Understanding how changing business dynamics alter the ultimate business goals, outcomes, and success metrics helps technology leaders determine the combination of IT styles that will deliver the new business capabilities required. Leaders should conduct assessments to understand the impact of business changes on IT capabilities.

2. Adjust IT strategy, formulate feasible investment plan and win the competition

Once you have identified your primary IT style and business strategy differences, evaluate your IT capabilities based on three criteria:

1. Importance of strategic value drivers to IT.
2. The maturity of your IT capabilities (eg, people, data, applications, processes).
3. The complexity of the ability to change.

Use decision tools to ensure you map IT maturity and current capabilities with the right levels of investment, divestment, and reinvestment to achieve your unique mix of styles (led by your dominant style) that will have the greatest impact on your business strategy. Use competitive BroadCast Unitedligence to guide your assessment.

3. Adjusting IT operating models to build components for high-performance racing cars

Every organization’s IT operating model has different levels of capabilities across six dimensions: customers, services, capabilities, structure, governance, and leadership. Develop an updated operating model reference architecture that translates your investments into a mix of styles to build the next iteration of a high-performance operating model—paying close attention to the strength of existing capabilities and the complexity of making changes to existing capabilities or new capabilities. Leverage research data across industry verticals to guide your redesign.

4. Align teams and leadership through incentives to improve efficiency, even in the pits

Gain buy-in from business partners for your new IT strategy, leadership style, and overall investment plan. This can be achieved through compelling narratives that motivate, inspire, and build consensus to achieve the desired outcomes. Leverage best practices to communicate with business stakeholders through change management, set calibration checkpoints, and build communication models that convey the iterative value of technology to improved business outcomes.

5. Play with the right speed and momentum

Use a roadmap to implement the new dominant IT style across your operating model and calibrate at predetermined intervals to maintain continuous alignment with business dynamics. Use performance metrics and relevant data to drive these conversations at every inflection point. Maintain the right pace and momentum to win the race. Too much momentum can cause you to lose control, while too little momentum won’t have the desired impact on the market.

To increase velocity, ensure your high-performance operating model is permanently aligned with changing business dynamics and at a pace your team can sustain.

The benefits of consistent alignment

Technology leaders will see several benefits when they achieve this level of relentless alignment using this five-step process. These benefits include balancing their IT portfolio by regularly aligning investments with business interests, adjusting their operating models to effectively engage the entire enterprise, and securely designing and adopting technologies that form the core of business innovation and processes.

This article was written by Chuck Gahun, a Principal Analyst at Forrester, whose research focuses on helping executives develop and implement digital strategies that drive results for businesses and consumers. Over the past 25 years of his career, he has led digital strategy, experience design, and technology implementation projects for content management systems, e-commerce systems, digital asset management systems, product information management systems, customer relationship management, marketing technology automation, and digital experience platforms. Chuck holds a bachelor’s degree in government and international politics and a master’s degree in technology management from George Mason University.