Aligning IT to Business Goals
Industry leaders are making an environment conducive with new technology in their firms, reports Ganesh Natarajan.india Updated: Nov 20, 2006 20:01 IST
It’s probably the oldest debate in modern business, quite akin to the old question of the chicken and the egg! Which comes first, a clear understanding of business objectives and strategy or the proliferation of Information Technology in the firm?
At first sight, the obvious answer is that IT has no place in the organisation unless it derives its meaning from and fully supports the business processes.
However some lateral thinking on this topic came in the late 1980s when the Massachusetts Institute of Technology in its much lauded "Management in the Nineties" research programme propagated the idea that as technology capabilities matured and computer systems became ubiquitous in every sector of business and industry, a recursive relationship would develop between business processes and IT, which could be harnessed for the benefit of the firm.
The success of many large global corporations today is a reflection of this symbiotic relationship. While the alignment of information technology to corporate goals and business goals has always been the prerequisite for significant benefits realized through information technology, the industry leaders in every sector, notably financial services, retail and discrete manufacturing have created an environment where availability of new technology innovations and capabilities has created new opportunities and hence new strategies for the firm.
The widespread use of business to business e-commerce, the integration and optimisation of multiple supply chains leading to vendor managed inventory, the proliferation of customer loyalty programs and the increasing use of on-line banking and holiday planning all point to the fact that strategy planners are using technology availability to align every business process to customer and stakeholder needs.
However before every CEO goes berserk over the need to increase IT spend, the key findings of the MIT research, though now over two decades old, will still stand the test of managerial scrutiny.
The prediction was that corporations would necessarily go through a five stage process in the journey towards exploiting the real power of IT.
In the evolutionary stages, localized exploitation within functions or departments would mature into internal integration as processes started to get energized through technology capabilities.
And then the organisation would enter the stage of revolution where business process reengineering and business network redesign would be essential to leverage the full potential of information technology.
Finally, the organisation would be ready to embark even on a journey of business scope redefinition and create new products and services that would not be conceivable without going through the full cycle of change.
The success of Indian industry across many sectors today is already being heralded as the beginning of a new era of prosperity for Indian business, where many of our corporate visionaries will be seen staking their claim for the numero uno position or at least be among the top global players in the industry they choose to dominate.
However, in every major growth process, a focus on key business processes and enabling technologies will create a better foundation for long term sustenance.