Aligning IT Strategy with Business Strategy

In the last blog in this series, we established that IT Strategy is the set of objectives, principles and plans that IT must use to support the company’s business strategy.  Therefore alignment with business strategy is key to ensure that IT Strategy is moving in the right direction.  The question is how do we achieve alignment?

Aligning with business strategy involves a few key steps:

1. Identify Strategic Drivers:  These may include business drivers, technology drivers, regulatory drivers or other external drivers within the business strategy
2. Understand Strategic Objectives:  These are the key critical objectives set within the business strategy.  They may be about targeting new customers segments, competing on new products, revenue objectives etc.
3. Document Initiatives:  See what strategic initiatives are already in flight and what IT’s role is in supporting these initiatives.
4. Define IT Capabilities:  What capabilities does IT need in terms of organization, process, technology etc. to address these strategic objectives.
5. Identify the IT Vision:  Establish the vision for IT in terms of capabilities that are needed to address the business strategy.

These few steps will ensure that IT capabilities will align with the needs of the business.  It must be noted that business strategy may change periodically as the company monitors the competitive landscape.  Therefore the IT organization must keep their eye on business strategy to ensure that they are responsive to any changes. 

It should also be noted that technology might from time-to-time provide some competitive advantages.  As an example, the automated reservation system Sabre, gave American Airlines a competitive advantage when it was first introduced.  Since then, all airlines have developed or adopted automated reservation systems and now there is no significant competitive advantage from this technology.  The point is that if the IT organization can build technology that provides a competitive advantage for the business, it should be included in the company’s business strategy.

In summary, IT strategy reflects the IT organization’s capabilities in support of the business strategy.  Therefore alignment with the business strategy is paramount for the development of the IT strategy.  Once IT and the business objectives are aligned, the next step is to look at the gaps in IT capabilities to deliver the business vision.  We will discuss this in more detail in our next blog in the series.
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How do you go about aligning your company’s IT and business strategies?

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Sai Balakrishna

​About the Author
 
Sai Balakrishna is the Managing Partner and Chief Executive Officer for ProcureVision, LLC. An expert in strategy development, business process optimization, program and portfolio management, Sai has over 25 years of management and leadership experience from Fortune 100 companies including American Airlines and Verizon.