Business – IT Strategic alignment

Introduction

(Wikipedia t. f.) defines Business-IT alignment as a dynamic state in which a business organization is able to utilize information technology (IT) effectively to achieve business objectives - typically improved financial performance or marketplace competitiveness. Software development companies are implementing IT strategies at a rapid pace that aligns with their business model which brings in elevation in overall performance of the companies.

(Rouse, What is business-IT alignment?, 2006) enlightens the role of executives in Business – IT alignment. Business-IT alignment involves optimizing communication between executives who take the business decisions and IT managers who oversee the technical operations. The employment of flexible business plans and IT architectures, as well as effective cost allocation, are critical components of any business-IT alignment implementation. Technical department managers can formulate and submit proposals that can be designed to ensure the optimum return on investment (ROI). Business executives can attend IT department meetings and seminars to elevate their understanding of the technical capabilities and limitations of the enterprise.

Purpose of Business – IT Alignment

It is important for all the software development companies in India to understand the purpose of Business – IT alignment. The purpose of Business – IT Alignment is to optimize the value that IT contributes to the enterprise. As such, in order to successfully design a strategic IT roadmap, it is important to start here. It is said that an organization has successfully aligned IT strategy to business strategy when there is:

• A shared understanding of how IT applications, services and technologies will contribute to business objectives – today and in the future.
• A shared focus on where to consume scarce resources, time and money; the trade-offs the enterprise is prepared to make.
• A credible working relation between the IT organization and the rest of the business evidenced by reliable daily operations, reactive problem management and predictable, innovative solution delivery.

Steps to achieve  Business – IT Alignment

(Group) gives four major steps to achieve Business – IT Alignment is achieved :

• Set Conditions to Achieve Alignment
• Scan for Hypothetical Enabling Technologies
• Determine IT Value Imperatives
• Develop IT Vision and Mission

Advantages of implementing Business – IT Alignment 

When the Business – IT Alignment program is completed successfully, following are the advantages that the organizations will get:

• Support from key executives to participate in developing the IT Strategy.
• A better understanding of how emerging technologies, applications and trends can or will impact your enterprise and your IT organization.
• A clear expectation of how IT will contribute to reaching the company’s business goals and objectives.
• A well-defined articulation of IT’s role in, and value to, the enterprise for the strategic horizon.

Issues in absence of Business – IT alignment 

Following are concerns that organizations often face when they lack Business – IT alignment :

• IT driven projects do not meet deadlines and budget constraints
• IT investment do not pay-off
• Ambiguity whether IT strategy and principles are appropriate
• Unclear outsourcing strategy
• Insufficient implementation of security controls
• Financial reports not available in time and accurate manner
• Optimization of IT budget utilization not possible

Conclusion

While the area of IT strategy is broad and incorporates many trends and new technology developments, Software development companies in India are keeping pace with the global market by adopting IT Strategy aligning to individual business model. Business-IT alignment is the correspondence between the business objectives and the Information Technology requirements of an enterprise. These two factors often seem to contradict, but many technical and economic experts agree that alignment between them, maintained over time, is crucial to the success of an enterprise.

Bibliography

• Group, I.-R. (n.d.). OptimizeIT | Info-Tech Research Group . Retrieved 05 04, 2016, from Business - IT Strategic Alignment: https://www.infotech.com/optimizeit/business-it-strategic-alignment
• Rouse, M. (2006, 05). What is business-IT alignment? Retrieved 05 04, 2016, from business-IT alignment: http://whatis.techtarget.com/definition/business-IT-alignment
• Wikipedia, t. f. (n.d.). Business-IT alignment. Retrieved 05 04, 2016, from Business-IT alignment: https://en.wikipedia.org/wiki/Business-IT_alignmentxof IT Strategy: http://panorama-consulting.com/the-importance-of-it-strategy/