8 Reasons Businesses Can’t Connect Business Strategy and IT Strategy

Last week I met with a client to discuss a presentation I’m going to do for his company. The client company has a good process in place for business strategy, and they have the beginnings of an IT strategy. But they’re having difficulty connecting the business strategy and the IT strategy, and they want me to help them.

There are a lot of reasons companies have difficulty connecting the business strategy and the IT strategy. Here are eight:

1. Strategy is a Secret

Business executives often keep the business strategy a secret, and don’t share it except on a need-to-know basis. So the important information that can guide the direction of every employee in the company is kept under wraps. After all, we wouldn’t want our competitors to find out.

The situation reminds me of a Dilbert cartoon I once saw. A hacker breaks into the company’s system and discovers the company’s business strategy. Dilbert asks, “Did he post it on the Internet? I’d like to read it.”

2. No CIO Participation in Strategy

In companies where the CIO doesn’t report to the CEO, the CIO usually doesn’t participate in the creation of the business strategy.

3. Technology isn’t Important Strategically

In many companies, the business executives don’t see how CIO experience and knowledge could contribute to the creation of a business strategy. “After all,” they naively think, “why would technology impact the future of the company?”

4. IT Doesn’t Need to Know

Executives don’t see why IT should need to know where the company is headed. The executives know that large IT projects — like large building construction projects — often take a long time to accomplish, but somehow they don’t translate that knowledge into a desire to give the IT organization more time to get ready for future large IT project. Or worse, the executives don’t understand that business assumptions are at the heart of IT systems, and that when the business strategy changes, those assumptions and systems may have to change as well.

5. Strategy = Vague

Business strategy is often written in very high-level terms that really don’t convey much useful information (to business or IT people). Even if the IT organization sees the strategy, there isn’t much that the IT organization (or anyone else) can learn from it.

6. Strategy = Objectives

There’s a tendency to confuse strategy and objectives. Many business “strategies” contain a list of objectives like “increase sales 20%” or “expand into Country X” which don’t really describe your strategy for accomplishing those objectives. How are you going to increase sales? Are you going to add more salespeople? Are you going to implement a new marketing campaign? How are you going to expand into Country X? Are you going to acquire a business in Country X? Are you going to open an office in Country X from scratch? Without knowing the strategy behind those objectives, the information is pretty useless.

And yes, I realize that the actual strategy for accomplishing those objectives is then worked out in subsequent meetings. But why isn’t the result of those subsequent meetings considered important enough to include in the strategy document (or at least in some strategy document)? Instead, those “details” are often never documented at all.

7. Strategy Omits the Omissions

Most strategy documents don’t include one of the most important parts of a strategy: the list of things that the business won’t do. In many cases this list can provide guidance to IT (and other parts of the business) on areas where short-cuts can be taken. For example, if you have no intention of expanding or selling internationally then IT doesn’t have to worry about multi-currency orders and accounting. If you have no plans for selling direct to consumers — you’ll always use distributors — then that implies a different type of systems emphasis.

8. Strategy = Evolutionary

Many processes for the creation of business strategy treat the strategy as an evolutionary step from the previous strategy rather than a revolutionary response to changing times. Relatively few business strategy sessions start out by brainstorming answers to the questions “What has changed in the world since we last had this conversation? How have people’s views of their environment changed? What new tools and technologies exist that might impact our customers’ perception of our products and services? What new tools and technologies are now reliable and affordable enough for us to apply in improving our products, our services, our processes, or our way of communicating with our customers?”

Conclusion

The presentation I’m going to do for my client is going to highlight some of these issues, and illustrate the impact of business strategy on IT by using a few examples. In the presentation, I want to make these points:

Business strategy has to be specific enough to be actionable and unambiguous.

Giving IT visibility into the business strategy can make your IT organization more effective in their role of implementing parts of that strategy.

IT information about viable cost-effective technology can influence the direction that your company is taking in certain strategic areas. For that reason (and to facilitate better communication), IT ought to be represented in the business strategic planning process.

Try to get this message across in your own organization. And let me know if you want my help.