When it comes to business/IT alignment it could be either—or both.
Closing the gap between IT and “the business” is a perpetual theme in insurance. Without regard to size, business executives will complain, “IT doesn’t understand our priorities,” and IT executives will say, “The business doesn’t know what they want.”
Sadly, this is a theme that has been characteristic of most IT/business relations for a long time. However, successfully- aligned organizations tend to look alike and this alignment can be a game changer. Here are five recommendations that you may want to consider if your IT and business organizations are out of alignment.
1. Have a business strategy that clearly outlines IT’s value to the success of the company
All good business strategies talk about market position, competition, product, distribution and service, but not all of them provide any detail regarding the role of the IT investment needed to achieve the stated goals. Business strategy should drive IT strategy and not the other way around. It’s important that IT avoid getting asked to execute a fully-baked business strategy that IT didn't contribute to. At the same time, keep in mind that a strategy is merely a directional forecast that doesn’t have to be 100 percent complete to be useful for setting IT priorities. The important action is for IT to engage and remain in contact with the business. Remember, firms that feel encumbered by legacy IT will be perpetually hindered until there is more clarity regarding IT strategy, so pitch in and help your business colleagues.
2. Develop and recruit IT leaders who have business skills … and vice versa
Generally speaking, firms that recruit IT leaders with MBAs or practical line business experience have more success in aligning business and IT. Middle management rotation programs can organically grow new leaders who have the understanding, communication and insight into the future of the insurance industry that is necessary to build value. Deep IT expertise can be rented; deep understanding of your business and its relationship to distribution partners and affiliates cannot. As for business leaders, the new normal for marketing leaders is to have a broad, practical understanding of how to use the internet to grow the business. This same standard can be usefully applied to new business operations leaders as well, since post-sales service must have the same feel as the pre-sales experience for most firms to create superior value.
3. Generate transparency into what is going on
I find the now classic “run the business, grow the business, transform the business” classification of IT spending creates the greatest alignment intention with respect to resource allocation. This approach illustrates your ability to “fund” initiatives and have an impact on the bottom line while also keeping the lights on. Of course, this analysis must be accompanied by transparency into the status of requests made to IT.
4. Whenever possible, form diversely skilled, multi-functional teams to solve problems
Not only does this help to grow the savvy, worldly “business IT” skill profiles necessary for alignment, it also generates more durable, comprehensive and value-driven outcomes. These aren’t task forces that form and disappear—I’m talking about baking a working group methodology into your business and IT daily working habits. You can include outside expertise into these groups to help transfer different ways to solve problems and incorporate more experiences to use on the next effort. This approach can be applied to any SDLC, but as you might expect it is most effective and creates the most value when you …
5. Shift the emphasis of IT delivery to an agile approach
Many insurers still rely heavily on a core administration platform that requires a waterfall approach to delivery. However, you can shorten cycles and engage in ‘agilish’ approaches that combine rigorous waterfall-style reviews of data integrity with flexible, ‘minimum viable product’ approaches to deciding just what to do.
We have never had more tools at our disposal to align business and IT. There really are no excuses. From portfolio management to agile development to IT professionals with formal business experience and training, there is a gold mine of assets available to deploy. Organizations with the desire to achieve better alignment just need to ‘perspire’ a bit more at the beginning, but if they ‘aspire’ to achieve superior business results, there’s never been a better time to align business and IT.
Russ Bostick is a founder and managing partner of MVP Advisory Group, a management-consulting firm focused on serving the insurance industry