Nowadays, we hear news about the revival of world economy. In India, though we have world class, matured quality processes/standards like CMM, ISO standards, six sigma etc., along with best solution approaches/models,there are many businesses which struggle for survival as their quarter to quarter bottom line keeps moving down with increased cost and ROI (Return on Investments) in remote corner. And, there is no sign of coming closer to profitability. There could be various reasons for such downfall. One of the reasons could be the non-alignment of IT (Information Technology) with business objectives. Such non-alignment could negatively impact the organizational performance and hamper achieving business objectives / goals / strategies.
Alignment of IT with Business:
IT is for business, and not business for IT. Let us consider the HR department of XYZ co. for our analysis. The HR department can be further divided into sub-departments like Administration, Recruitment, Personnel, Training and Pay roll.
|Sub Dept. Name||Name of the Application/
|Has the application covered the entire business process?||What is the %of coverage/ alignment of IT with Business||Gap in %|
|1||Human Resource(HR)||Administration||No application||Not applicable||0||Not applicable|
|2||-do-||Recruitment||No application||Not applicable||0||Not applicable|
|5||-do-||Pay roll||SAP- Pay roll||Yes||100||0|
Please look at the above table. Of the five sub-departments, the IT investment in pay roll department is 100% aligned with business requirements. IT investment in Personnel and Training sub-departments are 65% and 72% respectively. There is a gap between IT investment and Business requirements. The meaning here is all the processes of the particular sub-department are not coming under IT/not covered by computerization.
It is a clear indication that even though the said organization has invested in IT, it is not strategically aligned with business objectives. In the above scenario, how can one expect increasing bottom line for the said business? If we analyze further, we can find out there could be various reasons for the non- alignment. One of the reasons could be lack of proper planning, lack of knowledge/understanding about functional domain areas, less/no knowledge on IT systems and it’s alignment with business objectives. The remedial measure would be an analytical study on IT Portfolio Rationalization. Result of IT Portfolio Rationalization study would give the recommendations on 4Rs+ framework as below.
- Retain (Minimal Changes, Superior applications/projects, High Business value)
- Repair (Upgrades, Enhancements, Migrations for improvements and consolidations)
- Re-engineer (Benchmark, Find Best-fit solutions)
- Retire (Sunset, Decommission)
Business Solutions Framework (BSF), developed by Wilfred, can be used to come up with the road map of IT software applications / projects with milestones as per the 4Rs decision framework for the categories: Repair, Re-engineer, Integration and Outsourcing of the applications/projects. This road map throws more light on various business process scenarios with appropriate IT implementations that can be modeled and simulated using Business Process Management tools. Six Sigma tools and techniques could be used to measure and improve the process capabilities to achieve better ROI
Fig-1: Business Solutions Framework