Enhancing IT’s Value Proposition
Traditionally, IT played a supporting role within the enterprise. Today, an increasing number of organizations are operating as software companies, driving business value through innovative digital initiatives. This transformation has become an imperative on every executive’s agenda.
The latest McKinsey Global Survey, IT’s Future Value Proposition, examines digital transformation by surveying 709 leaders from various regions, across a range of industries and company sizes. The survey focused on 395 technology leaders and 314 executives from other C-Suite portfolios, yielding insights into the dynamics of Business–IT alignment that are essential for future success.
Let’s explore what McKinsey uncovered.
The Changing Landscape Demands Greater Business-IT Alignment
The shift is already underway.
Looking at the data on executives’ expectations of the future, you can see how the digital landscape is evolving. 45 percent of respondents say IT’s greatest value today is in business process enablement, but only 17 percent believe that will be the case in five years. Looking ahead, nearly 50 percent of executives believe IT’s future value will be focused on innovation, and integrating technology solutions.
McKinsey’s findings also emphasize the critical question of Business–IT alignment. The survey confirmed that IT is more effective when CIOs are directly involved in overall business strategy. McKinsey also found that when the CIO reports directly to the CEO rather than the CFO or other senior executive, respondents are 2.5 times more likely to say that their CIOs are “very involved” in company strategy.
The Key Factor: Business–IT Alignment
McKinsey cautions that there is work to be done before IT takes that next key step. The leading obstacle is the lack of alignment between business and IT teams.
The survey identified the issue of Business–IT alignment in three places.
- Business executives fail to understand IT projects
McKinsey found that 51 percent of IT respondents reported leading major infrastructure transformations, but many of their business counterparts failed to notice, with only 33 percent of business respondents saying the same.
- Problems in ownership
Many business executives failed to identify the CTO or CIO as the appropriate leader for their organization’s e-commerce design or technical delivery programs.
- Business executives see IT as replaceable
The survey also found that a growing percentage of business executives see IT as a function that can be readily replaced by third-party services.
The Way Forward
The McKinsey authors offer a way forward: “For CIOs and technology leaders to strengthen IT’s value proposition and relevance in the digital era, they must make meaningful contributions to growth and innovation. The results suggest that a greater leadership role for the CIO, and improved alignment and ways of working, are critical to this success.”
McKinsey specifically offers these three key steps to enhancing IT’s role and building stronger Business–IT alignment.
- CIOs must “rewrite their job descriptions.”
First, CIOs must establish themselves as genuine business leaders and partners. They need to elevate their role within the organization, and increase expectations for themselves and the IT function, while building a more direct reporting line to the CEO.
- Address nagging causes of IT ineffectiveness.
Second, IT must address its shortcomings, including a lack of clear priorities, weaknesses in operating models, and talent issues. The starting point is a frank discussion with business leaders to establish clear priorities, and a more unified operating model to support large-scale digital efforts, spanning technologies (legacy and next generation) and delivery practices (agile and traditional methodologies).
- Integrate technology across the enterprise.
Finally, technology impacts the work of many parts of the organization, placing the CIO in a unique position, with a company-wide perspective on certain activities. CIOs must use this advantage to build partnerships across the organization and step forward as leaders in navigating the company through potential disruptions.
How Storyteller Supports Business-IT Alignment
Effective business-IT alignment requires tools that enable collaboration, workflow automation, traceability, integration, and decomposition of products down to the feature and task level to deliver better business value. Blueprint’s Storyteller was developed with this in mind.
Storyteller enables upfront business-IT alignment to drive maximum value from each digital initiative. Storyteller supports the visibility, ownership, and accountability necessary to cultivate the future value that IT should be contributing to your organization.
To experience the power of Business–IT alignment and the potential for technology to transform your company, try Storyteller today.
