In a survey of over 500 senior business and technology executives done by the MIT Sloan School of Management, only 18% say that their company’s IT spending was “highly aligned with business priorities.” This means that in 82% of organizations, IT is consistently spending time and money on projects that were not addressing the actual needs of the business.
As practitioners, our experience has shown that one of the reasons for this misalignment is that business and IT often have very different interests. Business wants to overload IT projects with features and expects IT to deliver quickly, while IT is much more concerned with mitigating project risk, keeping project budgets under control, and protecting themselves from being held accountable for project failure. As expected, such divergent interests often lead to friction between business and IT and lackluster project outcomes that don’t actually satisfy the business’s needs efficiently.
How can CIOs and other IT executives ensure that IT focuses only on those projects that will provide business value or address a strategic problem for the business? One way is to begin by analyzing the business problems that the project is attempting to address, and the business objectives of the project.
At Seilevel, we use a visual model called the Business Objectives Model to highlight the business problems that the project is meant to address, and the business objectives of the project. Creating this model requires extensive discussions with the project’s business and executive stakeholders to understand why the project is needed in the first place and the return on investment that the project is expected to receive. When done properly, these discussions should take the form of a dialog between IT project leaders and business stakeholders. The business help IT align the project’s objectives with the overall business strategy of the company, while IT leaders should provide feedback to the business on whether the project can reasonably be expected to meet those objectives. Rather than using the language of IT, the model should articulate the problem and objectives of the project in terms of money—fundamentally, decreasing costs and/or increasing revenue.
The business objectives of an IT project should align closely with the overall business strategy of the company. If they do not, or if the business objectives of the project are not clear in the first place, it is a good sign that the project should be canceled or retooled to align more closely with the organization’s strategy. While this may seem like common sense, it can be difficult at times to stop the momentum of a project once it gets going, especially when there is executive-level support and budget to pay for it. However, failing to perform this analysis before a project begins can lead to much higher costs later on. It can also damage the credibility of the IT organization as a whole, and create mistrust between business and IT that eliminates any hopes for generating alignment between business and IT. This type of mistrust can set up a project to fail.
As an example, when we worked on a project for a large technology company, we were faced with a hostile business executive who said, almost in so many words, that it was not IT’s job to worry about the project’s business objectives. His words were, “who are you [the product manager] to ask me about my business objectives?” However, after explaining how a lack of clear business objectives could easily result in the delivery of an unsatisfactory product, he clearly understood why the IT team needed to be a part of those discussions. The executive then agreed to work with us to define coherent business objectives, which we have used to drive the current direction of the project’s features and requirements.