Page 486 - Handbook of Modern Telecommunications

Network Organization and Governance 4-17

4.2 Information Technology Alignment with Businesses

Kornel Terplan

IT budgets have been cut continuously and significantly over the last 4 years. “Do more with less” is
the guideline by many business managers for their IT departments. But really, how important is IT
for the business? This section begins with interesting survey results, provided by CIO Magazine in the
United States. Then, the paper will give concrete, actionable directions for improving effectivity, effi-
ciency, and reputation of IT. In particular, the roles of SOA (Service-Oriented Architecture), SOBA
(Service-Oriented Business Application), SODA (Service-Oriented Development Application), Business
Impact Management (BIM), Business Service Management (BSM) and the requirements of the Real-
Time Enterprise are addressed. When these initiatives are deployed properly, the enterprise will benefit
significantly. The final part of the presentation goes into details of focusing on the role of the IT infra-
structure for business success by addressing flexibility, collaboration with partners, security, scalability,
and compliance with standards.

4.2.1 Does IT Matter?

An agile enterprise reacts quickly and efficiently to changes, such as market opportunities or mergers
and acquisitions. The ability to react quickly translates to top-line revenue, and the ability to adjust effi-
ciently equals lower costs. In order to make an enterprise agile, several actions may be initiated, such as:
consideration of wireless technology, maintenance of multiple service provider relationships, design of
redundancy, and use of virtual networking. Agility is not something that can be forklifted into a com-
pany, but using it as a guiding principle can yield measurable benefits.
IT could be the key to agility of an enterprise. IT resources properly planned, deployed, and operated
will guarantee the leading edge.
The IT operations department within the IT organization is responsible for ensuring the integrity and
quality of service of the production environment, which consists of business applications and dependent
infrastructure (for example, servers, networks, desktops, storage, facilities, databases, and systems soft-
ware). It manages constant change and ensures that mission-critical applications supporting business
processes are running and performing. Many business processes are extremely dependent on IT opera-
tions processes; however, they are not always considered mission-critical to the business.
4.2.1.1 Survey Results: (from CIO Magazine—Alignment Special, Fall 2004)
Finding 1: Most companies have their house in order when it comes to alignment, but there are cracks
in the foundation. About 80% of both IT and business executives say that IT is well aligned with the
business, that alignment has improved, and that alignment has boosted their bottom line. But there are
shortcomings as well. Only 37% of IT executives and 30% business executives say IT is “very effective” at
working with the business. Business executives give the IT department lower marks for alignment than
they do to most other functions. And CIOs are often more optimistic in their assessments than either
business executives or the IT executives below them.
Finding 2: The underlying problem is weak IT leadership and unclear business strategy. When align-
ment is not working, CIOs often blame lack of strategic clarity, while business executives are most likely
to point to weak IT leadership and execution. Who is right? Both sides. It is telling that 26% of lower-
level IT executives cite weak IT leadership as a problem, while just 4% of CIOs do. Companies often fail
to hit their specific alignment goals, a sign of execution problems. But agreement about goals is also an
issue: business executives are less focused on cost savings and productivity and more focused customer
retention. The same is true with alignment techniques: beyond good communication, there is no con-
sensus on which techniques are particularly effective.