August 15th, 2007 (originally published)
Yes, I did purposely capitalize IT - meaning Information Technology.
Many articles and books discuss the importance of IT acting as a strategic partner with their business counterparts but few give specific examples or best-practices to build a solid partnership. The following will provide real-life examples to transform your IT organization into the partner that you want it to become.
Although not every example will be relevant or applicable to all IT organizations, the intent is to provide some new ideas and provoke some thought around creative approaches to common partnership challenges. It is readily apparent that there are a common set of IT challenges with which all IT organizations struggle. The degree to which each IT organization struggles with these challenges varies greatly.
This article is appropriate for IT professionals who want to increase their partnership with their business counterparts. It is also geared towards business professionals who want to increase the overall partnership between IT and the business. For the IT professional, put some of the appropriate approaches to work for you and measure the improvement in business satisfaction. For the business professional, incent your IT organization to leverage some of these approaches by rewarding the behavior when it is displayed – tell your IT team to read this.
I have been working in the IT arena for close to twenty years (2009 - now 20+ years) and have been at a variety of companies including Intuit, Infoseek, Disney, Internet Shopping Network and Cisco. I have seen the same challenges repeated at each company. The Information Technology group struggles with the expectations from their business partners and the business partners struggle to understand why the IT group is so slow, so unresponsive and so expensive.
This article makes a bold attempt to bridge the gap between IT and their business counterparts.
It’s All About Business PartnershipBusiness partnership is the key element behind a successful IT department. An IT leader can develop the strongest technically savvy IT team with excellent project management skills but if IT does work hand-in-hand with their business partners, the IT team will not be successful. There are many examples of IT projects that have failed and root cause analysis often points towards a lack of business partnership.
Why is strong business partnership necessary?
- Partnership allows IT to work in a strategic way with the business teams
- IT must understand the business strategy, objectives and timelines to create an aligned technical strategy
- Many business process changes require IT changes. Those business processes changes require that a business team member champion those changes in both the business and IT. The business champion needs to take responsibility along with their IT partner for implementing an organization adoption plan to ensure that the new changes are accepted by the business team.
- A business sponsor is often needed to manage the business side of an IT program. For example, user adoption of a new IT solution needs a business sponsor. No program should be considered success solely due to the fact that it was delivered – adoption must be one of the key measures of success.
If the proper level of business support for the IT organization does not exist, the challenges and risk to IT program become much more difficult.
Prioritization of IT projects
IT should not be in the position of prioritizing their project portfolio. A business partnership needs to exist between IT and the business with a corresponding process that helps drive prioritization of business projects. Why? In the current and future economic environment, IT has limited resources and limited budget. It is critical that the most impactful programs have the highest priority. IT must make their project portfolio visible in such a way that there can be quarterly discussions about the portfolio. Every quarter you should ask the question, “Are we working on the highest value programs? Do we have our best resources focused on the business’ top objectives?”
By sharing the responsibility of the IT project portfolio, you can increase visibility, understanding and confidence in the IT activities. This can be done through quarterly meetings in which business and IT leaders are involved.
Often IT projects need to be sequenced because the same resources are needed for each project - sequencing allows IT to stop saying “no” and start saying “yes but we will not start until…”.
IT moving from a tactical executor to a strategic business partner
The goal of every IT organization is to move from being a tactical provisioner of equipment to a strategic business partner. When IT acts as an order taker, neither the IT group nor the business teams will be satisfied. An IT group which is acting in a tactical manner is not leveraging the true capabilities of IT and leads to the following less than optimal outcomes:
- IT’s true strategic value is not realized
- The IT group will have difficulty retaining and attracting top talent
IT’s true strategic value is not realized
Evolving into a strategic business partner typically requires that the IT team demonstrate a different set of skills. As a tactical equipment provisioner, IT is mainly on the receiving end of projects. In this regard, IT is acting as an order taker. Common signs of an order-taker IT group include comments such as, “I have no idea why we are doing this. I am just involved in how it gets done.” When IT desires to act as a strategic business partner, other skills become necessary, specifically:
- business acumen
- the ability to think strategically
- soft-skills such as communication, influencing and negotiation skills
Business acumen is a key skill in moving towards being a strategic partner with the business. IT can indeed learn these skills but often the IT leadership does not stress its importance. As IT gains knowledge of the business processes and the future direction of the business, IT increases its own credibility because IT will be able to articulate business goals. IT will then be able to think more strategically and design solutions to meet the business goals. For example, if the business wants to segment its customers, IT can help design a flexible customer segmentation solution with the ability to analyze those segments through a robust Business Intelligence solution.
IT needs to develop soft-skills such as communication, influencing and negotiation skills. Communication is not typically a skill that IT professionals proactively focus on developing. It should be. The ability to communicate in a non-technical way that explains what needs to be accomplished is critical. As a reality check, ask your business partners which IT resources are good communicators. You are likely to get a very short list in response. Then ask them if communication from IT is important and you are guaranteed to get a resounding YES!
As you develop your team, ensure that you reinforce the importance of communication and either design communication training or send team members to external training. In some cases, you need to consider “accent reduction” training for team members for whom English is their second language. It typically takes months of training to hear a reduction in someone’s access, so be prepared to spend the proper amount of effort to get results.
After basic communication skills are mastered, negotiation and influencing skills become more important to the IT team. As IT moves into a consultative role, IT will rapidly find that the ability to negotiate and influence the business partners helps to ensure that the necessary programs are properly prioritized. For example, if IT needs to upgrade some computer servers to a newer operating system, the IT group is more likely to convince the business of the important if they can explain the business benefits. If the IT team approaches the business with a statement such as, “Hey we need to upgrade the operating system and we need about five hours of downtime”, it will not be as effective as a statement such as, “The new operating system will eliminate five critical bugs causing system crashes which account for three hours of downtime every month. This downtime affects ordering and therefore reduces revenue by $15,000 every month.” The latter statement is much more compelling and is much more likely to influence the business.
Before communicating with the business partners, think about how to articulate your message in business terms. How will your request increase revenue, increase quality, increase the customer base, increase customer satisfaction or help meet the stated business objectives? Once the IT team starts communicating in this way, it becomes easier to get business buy-in and support for key programs.
IT acts as an order taker and cannot attract and retain talent
When the IT team acts simply as a support organization and not as a strategic business partner, the IT team often is not fully challenged. This does not mean that the IT team is sitting around with nothing to do – the team may be incredibly busy but this does not mean that the team is challenged since the team is working very tactically. It will be difficult to attract and retain top talent when the team is working as a tactical order taker.
Top talent IT professionals, those who are not only technically savvy but also have strong business acumen, vision and soft-skills, require the ability to design and architect solutions to business problems, think innovatively and continually learn. If these activities are not available, top talent will either not join or will eventually leave an IT team. The IT teams that work tactical order takers get stuck in a rut – if they want to become more strategic, they often do not have the resources to do so; in addition, they have trouble hiring in the necessary resources because the strategic IT resources will evaluate the team and realize that the team is very tactical. Nonetheless, the only way to become more strategic is to hire a few key resources and possibly leverage a consulting company such as Accenture, PRTM, Ernst and Young or KPMG.
The difference between operational skills and strategic skills is significant. If IT leadership is driven to move from a support organization to a strategic business partner organization, IT needs to identify the skill gaps that exist within the team and develop a plan to address those gaps.
Business partnership can be thought of as a continuum of maturity levels. The partnership maturity looks like the following:
Level 1 is the most tactical relationship between IT and the business teams. IT is a true order taker and simply provisioning equipment. Level 4 is the level that IT and business teams should strive for. At Level 4, IT is included in strategic planning, has gained credibility and is proactively engaged to solve business problems. At Level 4, the IT team is providing solutions that help the business improve quality, reduce costs, increase productivity and gain greater market share.
- Level 1 - IT as an order taker – business team defining projects – IT has limited input into projects – business team indifferent to IT and IT maintains the servers
- Level 2 – IT provides desktop support but does not know the business vision or direction
- Level 3 – IT is sometimes included in business discussions but this is not typical.
- Level 4 – IT understand business direction – demonstrates strategic ability by designing and executing roadmaps that align to business strategy
Business partnership is constantly changing and needs to be managed on an on-going basis. This is due to a number of factors:
- Changing business and IT personnel
- Changing business strategy and IT strategy
Changing business and IT personnel – In every company the only constant is change. Change in the sense of people rotating to different department or leaving the company affects business partnership. Often, just as you build a strong partnership between IT and the business, your business partner rotates to a different group. As a result, reality dictates that, as an IT professional, you must be able to build and re-build business partnerships on an on-going basis. It is best to proactively engage new business partners, communicate constantly and review IT activities and strategy on a quarterly basis.
Changing business and IT direction - The direction of business and IT may change based on new business and technical opportunities. Strong business partnership is critical in these cases. Say that IT decides to change its approach from a best-of-breed approach to a single solution approach. The business will be impacted by this decision and needs to be engaged and included in the decision as well as the pros and cons of the decision. Let’s say that the business changes its direction and decides to go after a new customer market. IT may be impacted in its Information Architecture or in the systems that manage customer data. In both examples, IT and business need to be tightly linked to reduce risks and collaboratively determine the best solutions to address the changes.
Summary – Business partnership between IT and the business is a key foundational element in a company’s ability to be successful. IT can and should play a role in building business partnership.