Understanding the Importance of Aligning IT Strategy with Business Strategy

The world around us is changing at a rapid pace, requiring organizations to constantly adjust their business strategies in order to remain competitive and relevant.

That’s not an easy task on its own, but it’s made even more difficult by the fact that almost every department in a modern organization relies on information technology.

When an organization’s business strategy and IT strategy are not aligned, achieving business objectives becomes difficult because the same solutions that were supposed to help, can quickly become a burden.

What’s worse, the lack of alignment between business and IT, can make it nearly impossible to plan technology purchases, resulting in a lot of wasted time and money.

Since understanding the importance of aligning IT strategy with business strategy is the first step in making the desired alignment happen, this article explores this increasingly relevant topic of IT and business alignment from multiple angles, giving you all the information you need to set the right course for your organization. Keep reading for IT and business examples.

Why IT Strategy and Business Strategy Don’t Always Align?

According to PwC’s Innovation Benchmark Report, which surveyed 1,200 executives in 44 countries, 54 percent of executives struggle to align innovation strategy with business strategy. As a result, 72 percent are not out-innovating their competitors.

Statistics like these are alarming because they highlight the real scope of the issue and its consequences. But why does this disconnect happen? There are a few common reasons:

• Shiny object syndrome: Business leaders who have an innate interest in technology sometimes suffer the “shiny object syndrome,” whose main symptom is the attraction to new technologies that don’t have anything to offer to the organization in terms of helping it achieve its business objectives. Such leaders may, for example, push the implementation of cryptocurrency payment support even though customers have no interest in it and the organization has nothing to gain from it.
• Leadership changes: It’s easy for one leader’s goals and beliefs to influence the entire organization and its strategy. When leadership changes and someone else steps in, it’s common for IT investment decisions to be reversed in favor of new ones. Unless well thought out, such changes can completely erase any IT and business strategy alignment.
• Don’t fix what works mentality: Some organizations cling to outdated technology as if it was the holy grail, not realizing that it no longer aligns with their business strategy, which typically revolves around agility and flexibility. What the leadership of such organizations doesn’t understand is that new technology is often not just more capable but also more reliable.
• Poor communication: When IT decision-makers don’t clearly understand the organization’s strategy and vision, they can’t make technology decisions that align with it. In virtually all cases, this source of misalignment between IT strategy and business strategy is caused by poor communication at the organizational level.

In the real world, the lack of IT alignment with business strategy tends to be caused by the shared influence of multiple factors, such as the combination of poor communication and frequent leadership changes.

The Benefits of Achieving IT and Business Strategy Alignment

IT business alignment is well worth the effort it takes to achieve it because there are many benefits that organizations can reap as a reward, and they all stem from the power of modern technology to help accomplish business objectives.

1. Increased Competitiveness

Back in the day, information technology was an indulgence for most organizations. Those who could afford to buy expensive computers enjoyed exploring their potential, but their value was fairly limited beyond what traditional methods were capable of. Today, technology is absolutely essential, and all organizations rely on it.

Because technology underpins every aspect of how organizations operate, it has a tremendous potential to increase competitiveness—but only when it’s implemented with the overall business model and plan in mind. Indeed, merely using technology without an alignment with the overall business goals is a waste of time these days.

2. Improved Focus on Business Objectives

Implementing technology solutions for the sake of implementing technology solutions can have a detrimental effect on an organization’s ability to pursue business objectives. When IT solutions are selected with the business strategy in mind, they can much better serve their purpose and keep the organization on the right course, instead of derailing it from it.

The same IT solutions can also become an invaluable source of invaluable data, helping the organization’s leadership make informed business decisions based on hard data instead of subjective opinions and past experience. While data-driven decision-making may seem complicated, today’s cloud-based tools make it effortless.  

3. Better Resource Utilization

Most small and medium-sized organizations operate with fairly limited resources, so they must make every technology investment count in order to successfully compete with large enterprises. Aligning IT with business strategy is crucial for making sure that all available resources are used as effectively as possible.

As we’ve already discussed in this article, organizations where IT business alignment is non-existent can easily waste a lot of money, time, and person-hours pursuing shiny gadgets and trends that are not really worth pursuing because they don’t help them achieve their business goals.

Achieving IT Business Alignment Doesn’t Have to Be Difficult

While understanding the importance of aligning IT strategy with business strategy is the first step in achieving the desired alignment, it’s certainly not the only one. IT business alignment isn’t a one-off, box-ticking activity. Instead, it requires regular reviews, excellent communication, and the technical ability to implement the IT solutions that best meet the organization’s needs and requirements.

For these and other reasons, small and medium-sized organizations should strongly consider a partnership with a managed IT services provider. At OSIbeyond, we offer comprehensive managed IT services backed by world-class customer service, and we would be more than happy to become your strategic technology partner.

With our IT strategy consulting and planning services in Washington D.C., Maryland, and Virginia, you can easily align your IT strategy with your business strategy without stretching yourself too thin and losing sight of what you do best.

Contact us for more information.