Guest Lecture delivered at School of Computing & Digital Media at DePaul University, Chicago, IL

1. Business IT Alignment
Guest Lecture at College of Computing and Digital Media at DePaul University, Chicago
6:00 pm - 7:30 pm, 26th January 2011
Discussion Points:
What is ‘alignment’ between Business and IT? Name:
What are the tools for Business IT alignment? Designation:
Business imperatives enabled by IT Date: February, 2004
Case Studies
Prem Shanker
www.linkedin.com/in/premshanker
1

2. What is Business IT (B/I) Alignment?
“Alignment is the capacity to demonstrate a positive relationship between IT
and the accepted financial measures of performance” – Paul Strassmann (‘The
Squandered Computer’,1998)
Henderson & Venkatraman Strategic Alignment: ‘Leveraging Information
Technology for transforming organizations’
IT Strategy can ‘support’ as well as ‘shape’ business strategy
Introduced the concept of ‘external’ and ‘internal’ components for IT Strategy
Why misalignment exists?
Differences in
Objectives – e.g. IT personnel may have a narrow view of why an application needs
to be developed or potential impact of application being down
Culture – e.g. IT personnel may not have the market perspective that business
personnel are used to
Incentives – e.g. if a project manager is only compensated on success of his/ her
individual project, he/ she may not be interested in whether the project makes sense
in the first place!
Mutual ignorance for the other group's body of knowledge – most training programs
typically focuses on skills and less on business processes 2

3. What are the tools for B/I Alignment?
Management’s ‘vision’ for IT ’s role in the company
Do business unit heads look upon IT as a value-center or a cost-center?
IT leader must be part of the executive team
Approx 75% North American CIOs report to CEO (source: McKinsey Quarterly)
Basic communication between business and IT
Team-building should be across organization boundaries
Proactive offering IT-enabled business solutions to earn confidence of
business
Business execs may not want interference/ change in their business
processes, hence IT execs need to do a sales role mentioning business
benefits of proposed IT projects
Joint Governance (prioritization of demands from multiple business
units)
IT portfolio management as ‘business options’ (from ‘information
caretakers to business brokers’ – Ralph Szygenda, ex-CIO, GM)
Businesses must view IT as a ‘neutral’ party interested in what’s best for
the overall organization
3

4. Business imperatives enabled by IT
Business Imperatives IT Enablement
Predicting business performance Real-time decisions
(predicting business performance helps business execs allocate resources
appropriately. IT can enable it through real-time info gathering and
disbursement for sales data, cost data, growth data etc)
Speed to market Customer feedback at point of
experience, PDA, Virtualize
(Case of Zara: IT for fast fashion)
Growth thru acquisitions Flexible & Adaptive IT
(IT can enable business to worry less on whether the acquired firm will
integrate seamlessly with the acquiring firm within an acceptable time-limit)
Single view of customer Integration
(today’s customers are globally spread. Need to build-anywhere, sell-anywhere)
4

5. Case Studies
Insurance industry
Business strategy changes from single/ primary channel to multi-channels (multiple touch-
points) – internet/ social media sales. How to capture customer interest?
Customer Analytics – ‘pay as you drive’. Due to GPS technologies, insurance firms can observe
the driving speed, driving pattern and routes to evaluate their risks and customize premiums
better
Automotive industry
Reducing product development cycle time (from order to delivery) – the days of ‘build and they
will come’ are numbered. Flexible manufacturing demands real-time data from customer order
to factory shop floor)
Global product development and marketing – manufacture at the cheapest price-point (for a
given quality) and sell across the globe (due to reduced transportation costs or lower import
duties etc). This requires global systems to be integrated.
Utilities
Smart interactive meters – Customers can view and control their energy consumption real-time,
get accurate billing etc.
Banking
From ‘product-lead’ to ‘customer-lead’ – global trade and business requires to manage your
customer info consistently from Mumbai to Manhattan. Massive systems integration opportunity.
Transportation
Increased tolls for peak-time traffic management (helped Singapore’s road congestion)
For queries/ clarifications, please reach out via www.linkedin.com/in/premshanker
5