This comprehensive 48 page study supports a breakthrough in thinking about IT business alignment that rejects the notion of generic IT. Even for firms in the same industry, business strategies and key success factors may differ. This research report can help IT organizations frame strategic alignment analysis in terms of building and managing an IT organization with capabilities that best fit the strategic business need. IT can also help organizations optimize ongoing alignment by implementing processes and procedures that best predict top levels of performance alignment for each archetype.
The IT Process Institute conducted a study 269 North American IT organizations greater than $100 million in revenue from various industries, to determine specific practices that enable IT strategic alignment success. The survey collected data on nine value archetype attributes as well forty nine strategic alignment practices in five categories, and sixteen alignment performance measures.
Summary of key findings:
Finding 1 – Study confirmed three IT Value Archetypes – A model of nine common organizational attributes identified three groups. Utility Providers are primarily focused on attributes related to managing common information management services. Process Optimizers have a matched focus on shared service attributes and business application and business process related attributes. Revenue Enablers have a near even mix of focus on enabling strategic revenue, business application and process, and shared services.
Finding 2 – Different archetypes have building-block competencies – analysis archetype attributes, as well as spending and performance data supports the conclusion that three archetypes have focus areas and competencies that build on one another.
Finding 3 – A few proven practices optimize ongoing alignment – Regression analysis identified 11 alignment practices that predict top levels of strategic alignment across the three groups.
Finding 4 – Achieving business integration instead of alignment – IT organizations at firms with highest alignment performance are actively engaged with and integrated to the business, not separate from and seeking alignment with the business.
Finding 5 – Improved strategic alignment can be engineered at three levels – An IT value archetype model can be use to improve strategic alignment at three levels; 1) by building and managing an IT organization with characteristics of a particular archetype 2) verifying the different attributes that define the archetype are in alignment 3) optimizing ongoing alignment performance by implementing proven practices for each archetype.
- Only 36% of organizations in ITPI study indicate that their business clearly identifies business strategy, key success factors, competitive advantage, goals and objectives.
- The IT organizations with the highest alignment performance, have the lowest percentage of budget under IT governance control, but have the highest rage of annual budget growth.
- The IT organizations with the highest alignment performance, spend a greater percentage of overall IT budget on new projects (42%) as compared to lowest alignment performance group (27%).