The Alignment Paradox
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The Bain study on alignment isn't the first research that shows that attempts to improve alignment are ineffective. |
Paul Tallon, a professor at Boston College, wrote a few years ago about an "alignment paradox":
Our study found that while 70 percent of companies reduce costs or improve sales and customer service after increasing strategic alignment, 30 percent see no improvement or even a decline.
The main reason alignment efforts can harm companies, Tallon wrote, is rigidity.
When companies create an inflexible IT backbone as they align their systems to strategy, they risk locking themselves into a particular way of doing business. Indeed, our research team consistently found that this loss of flexibility was a key reason why the 30 percent group saw no real benefit from their alignment efforts. ... In fact, the companies we found facing an alignment paradox tended to be in fast-paced industries such as electronics, pharmaceuticals and financial services, where IT flexibility and the ability to turn on a dime are a matter of survival.
Inflexibility, of course, can be a prime cause of the sort of ineffectiveness that the Bain study emphasizes. Click here to read Tallon's article, and to learn about the causes of that alignment rigor mortis and how successful companies manage to avoid it.
Comments (2)
Alignment is tricky because of 2 reasons
1) Technical Executives like CIO have less exposure to the business needs. They are usually not invited into business strategy and marketing strategy meeting. Even if the technical executives were aware of the business need, they often fail to communicate how IT can help the organizations solve the problem.
2) Non technical executives have no exposure to the IT skill. They don't clearly understand how technology will enable them to achieve their business objective. Usually, they get educated by the vendor's sales force.
Posted by Raj | September 11, 2007 5:20 PM
As any self-respecting place kicker will tell you, it's difficult to kick a field goal in a storm. The problem with alignment, which is partly why it has been such a tough nut to crack, is that firms are trying to align IT to a strategy that is increasingly prone to change. Oh, you can also add in that the technology itself is likely to change. Remember, better, faster, cheaper... so to my place kicker analogy, aligning IT and business strategy in today's market is like kicking a field goal in a storm except that the goal posts keep moving and the ball keeps changing size and shape. Whoops, missed again!
So, it's no surprise that there's an alignment paradox. The point though is not to become overly fixated on the goal (being in alignment) at the expense of knowing what you are committing to along the way. With IT, the journey is as critical as the destination. My research shows time and again that firms have made bad IT decisions but they didn't know it at the time. With 20-20 hindsight, we can look back and have something to assign blame to. You can blame IT or management or users for dragging you into what we call a rigidity trap. For many firms, the answer strangely is not IT. The answer is IT governance. With the proper governance, flexibility will not be so impossible. Good governance allows firms to have alignment and flexibity at the same time. If you have both, you don't have a paradox anymore!
Posted by Paul Tallon | September 20, 2007 1:26 PM