Despite research conducted into the benefits of IT--both from an organisational performance and ROI point of view--very little has been done into just how organisations align IT with corporate objectives.
I started looking at the IT alignment/corporate objectives problem in 1997, when I was invited by Macquarie University to take part in a new Doctor Of Business Administration program.
What my research revealed was that there was a set of 21 key factors that organisations use for IT alignment. Not only are these important, but they also form a hierarchy where certain key factors are dependent on the presence of other key factors if they are to be successful in assisting the organisation.
In addition, I found that certain key factors have a close interdependency--that is, they must both be present and the success of one is dependent on the success of the other.
The key factors can be logically grouped into three types: management oriented; business oriented; and technology oriented. The three groups are also hierarchically related, for example the technology-oriented key factors are dependent on the business-oriented key factors, which in turn are dependent on the management-oriented key factors.
Management-orientated key factors lay the foundation for use of IT in the organisation. These determine the direction and extent to which IT permeates the organisation. All other key factors depend on the presence and appropriate use of these--without them the organisation would find it very difficult, if not impossible, to align its IT to its corporate objectives.
Appropriate and cost effective interfaces between the IT department and the rest of the organisation are ensured by the business-oriented key factors. For example, that there are business reasons for all aspects of the IT infrastructure.
Business-orientated key factors ensure that the IT department provides IT infrastructure and services which are relevant to the business requirements of the organisation. This in turn supports the organisation in achieving its corporate objectives.
Technology-oriented key factors ensure that, at the very least, the underlying IT infrastructure and services to be delivered support the corporate objectives of both the IT department and the organisation in an appropriate and cost-effective way.
The technology oriented key factors are dependent on business-oriented key factors, to ensure that they have a business relevance. These also aid the organisation in achieving its objectives of management, supply and delivery of appropriate IT infrastructure and services.
My research also found that it's not enough for the key factors to just be present--they must follow a certain set of parameters, or be used in a particular way.
I identified a set of parameters for each key factor, that defines how the key factor should be used by the organisation to successfully align its IT with its corporate objectives. These parameters have been tested and refined in various organisations, to ensure they concisely and completely define the key factors.
Jonathan Farrell is managing director of Farrell & Associates, a consulting organisation which specialises in strategic planning, services management and IT. He can be contacted at jonathan.farrell@farrell-associates.com.au
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