While the relationship between the business and IT seemed to be improving at the beginning of the decade, it is now stalling again. A recent study by Capgemini reveals that the visions of the two decision-making poles on the role of IT are less and less aligned.
Is the vision of IT’s role shared by everyone in the organization? In 2012, for two-thirds of executives the answer was yes.
At least that’s what emerged from a survey conducted at the time by Capgemini of 1,300 executives from both the business and IT sectors. A very encouraging level of collusion, especially in the less than synergistic context of the early 2000s. In those days, business people considered IT teams as mere geeks, disconnected from the realities of the company. On the other hand, IT had a very negative view of the business: individuals obsessed with numbers and profitability.
And yet the upturn observed in 2012 has fizzled out. The relationship between IT and the business has deteriorated significantly again. A new Capgemini study released a few months ago on the same topic, reveals that now only a little more than a third of executives (37% vs. 65% in 2012) think that IT managers and business people have the same vision of IT’s role in the company. Worse: only 35% (vs. 59% in 2012) share the idea that IT can increase business productivity. Only a third (36%) believe that IT and business decision makers share the same IT investment priorities. In 2012 they were 53%.
The relationship between IT and the business has deteriorated again since 2012.
The good old Business/IT discord is clearly back.
What makes this phenomenon surprising is that at the same time, more and more IT managers have acquired the right to sit on executive committees (Comex). And executives agree: technology is disrupting all industries without distinction. Never has it been so valued.
So why is the level of trust in the players who control IT bound to collapse? Is there a way to reverse this dislike? The American edition of CIO magazine puts forward 4 avenues to better understand and, why not, curb the phenomenon(Why IT-business alignment still fails?).
The pace of change increases tensions on both sides
The dizzying growth of innovation in recent years has put a lot of pressure on all IT teams. Technological upheavals raise concerns about the sustainability of the business among senior management. And when executives become aware that established competitors, or more disruptive new entrants, can suddenly gain an advantage through innovation, concern often turns to panic. And the panic to regain control over IT.
The upheaval of the business in the face of the frantic pace of digital transformation has therefore generated mistrust of IT and increased pressure on teams. This requires them to move faster and faster to stay in the race. At the same time, this hyper-awareness of technological issues takes up the attention and energy of managers who – as a result – spend less time on developing their business. The dilution of attention is therefore one of the perverse effects of digital transformation.
The business upheaval linked to the digital transformation has generated a mistrust of IT.
Present on all fronts, IT has often done the impossible in recent years to satisfy all departments. An IT manager cannot slow down in the face of the pace of technological change. Sometimes teams are exhausted and eventually tire of the effort required. They feel that their hard work is insufficiently rewarded and valued. Working relationships become strained as one project follows another.
When senior management demonstrates a more detailed knowledge of the work carried out by the ISD, the deterioration of relations can be safeguarded. If not, drifts are inevitable.
In its defense, IT has long been guilty of a lack of transparency. But with the financial stakes linked to technologies soaring, compartmentalization can no longer be the rule.
Increased managerial competition in management committees
In the early 2000s, IT managers were not involved in strategic investment decisions. They were often presented with a fait accompli. Their main role was to implement the solutions chosen by the Comex, some of which were never used.
During the 2010s, the major importance of technology has challenged the balance of power in the company. Companies then became very dependent on technology, regardless of the industry. Faced with this race for rapid change, companies have had to integrate new skills and be attentive to the technological mutations of their markets. While senior management does not always understand the purely technical dimension, it does understand that it must take a close interest in technological choices. Simple question of survival.
Technology has challenged the balance of power in the company.
In the face of this technological upheaval, top management’s priority is to retain the company’s strategic vision and control of operations. At the same time, the IT department has acquired the legitimacy and the ability to play a leadership role in the IT environment, on all the company’s subjects. As a result, leadership conflicts can arise between IT departments, which are often more experienced and competent in these areas, and general management, which wants to remain in charge.
The CIO now reports more to the CEO than to the CFO. This direct contact of technology with strategy is fundamental to support the ongoing transformation. By inviting the CIO to the Executive Committee, the management shows a strong and tangible consideration for technological change. A dialogue can then better take place between peers, without imbalance.
The IT department must learn to master the art of communication
When IT departments reach the Comex, making their strategic choices heard means mastering the communication exercise. To exist in the decision-making bodies, without becoming mere order takers, requires knowing how to make oneself heard. IT decision-makers must be able to influence other members of the Comex. In particular, they must be able to prioritize support for technology decisions that will have the greatest impact in the future.
IT decision-makers must be able to influence other members of the Comex.
Becoming a good communicator requires identifying useful indicators and KPIs that will convince decision-makers. Often the differences between IT and the business come from imperfect communication and an inability to agree on objectives. The KPIs presented by the IT department for a project are often misunderstood by the business. These repeated divergences lead to a chronic misunderstanding of the decision-making poles.
Revenues generated, operational efficiency and costs: for senior management, the metrics to monitor remain unchanged. Some departments focus on KPIs specific to their activity. By mastering corporate objectives, IT managers can significantly improve relations with the business. They can translate these corporate objectives into business objectives, integrating their IT issues. The role of the IT department will then be to ensure compliance with the results achieved by the business lines on IT subjects while ensuring compliance with the corporate KPIs set by management.
Digital transformation, an infinite iterative process
The quality of the links between all human organizations follows cycles.
The relationship between the business and the IT department has gone through several changes over the last twenty years: the IT system has moved from the mainframe to the personal computer; the business has gained autonomy over the management of IT budgets, before losing it to the IT department; then SaaS arrived with the effect of complete decentralization of IT budgets…
Today, the strong focus on IT by the business units remains the driving force behind the ongoing digital transformation. Each business unit has integrated the crucial importance of technology in the development of its activities. The central role of technology is therefore no longer an issue.
The importance – more critical than ever – of technological and financial issues and the desire of the business to master these subjects themselves, partly explain this gap between IT and the business.
However, everyone needs to focus on turning technology into a competitive advantage. The real battle is here.