5 IT Risks That Could Cripple Your Business: How to Mitigate Them

We typically write articles related to the digital transformation, business process transformation, business process improvement and AI. However, bear with me. In 25+ years of consulting, I have worked with large, medium and small organizations in the private and government space. I am not surprised with how many similarities I have observed in issues related to IT irrespective of the size. We talk a lot about Cyber Security these days and rightly so, but it is not the only risk. In this series, I will discuss the top 5 business risks related to IT that I have commonly seen across organizations over the years, particularly in the last 10 years. I am going to count down from 5 to 1, in this weekly series over the next few weeks.

Risk # 5 – Lack of Alignment between IT and Business Teams

In typical organizations, IT is there to serve the needs of the business. This is the main function of the IT department. It is such a critical component because well planned, implemented and maintained technology allows a business to operate more efficiently, save on operating expenses and ultimately, set themselves apart from their competition. The IT team can serve 1 department or a number of departments depending on the size of the business. So it is important that business and IT are on the same page and IT knows what the needs and key drivers are for business success and business knows what are the key drivers and challenges that IT faces. However, there are so many cases where this does not seem to be how it works due to poor communication or competing objectives or whatever the case. For example, maybe the company’s IT department is focused on reducing costs to meet the needs set by the company Executive team, while the Business department is focused on increasing revenue to meet the needs it was mandated. As a result, the IT department may be reluctant to invest in new technologies that could help the Business department achieve its goals. This can put the organization at a competitive disadvantage. It could be the opposite that IT invests in a large system to support the business but the business does not buy in and is not on board.

Why it’s a Pain Point:

A 2022 survey by Gartner found that only 80% of organizations do not have a high level of alignment between IT and business. Another 2023 survey by Capgemini found that only 37% of executives think business and IT leaders agree on IT’s role. Misaligned objectives can hurt the cohesiveness between IT and business. There often seems to be a lack of communication between IT and business teams in large as well as mid-sized companies. As a matter of fact, this often happens in smaller organizations as well. This can lead to problems with understanding the needs of the business, as well as with implementing IT solutions that meet those needs. Have you been part of or seen a large IT project like an Enterprise Resource Planning implementation (ERP) or any major system implementation. This usually takes months or even years to complete and at the end, you may wonder if this was an IT initiative or a business initiative. It is regularly hailed a success by the organization’s leadership after it is implemented. However, it sometimes still difficult to get the business to buy in. It can be a couple of years of convincing the business individual contributors to use it properly. You might be thinking is it just training, or they do not like change. Maybe a little of both. Maybe it is something that was driven by leadership but individual contributors feel that the technology does not meet their needs. The business may offer or even mandate that every employee take the proper training and still success can be fleeting. They limp along and eventually get there, however, this can be several years in the making. Finally, 2 or 3 years after initial implementation, all components are implemented when business begin to realize that the data being entered is very minimal, is not timely entered or simply not accurate. Data governance ? We can discuss this at a later time.

Hopefully, most projects go a bit smoother than this but this is pretty common. Misalignment between IT and the business can lead to a wide range of issues, as the two are often interdependent in most organizations. This can lead to many missed opportunities like,

Current business applications are not optimized for performance or work as efficiently as possible to meet the operations needs. That could be anything from time-consuming processes to manual functions that slow down usage and lead to frustration of employees. They may miss out on opportunities to automate processes to improve its operations, enter new markets, or develop new products and services.

Have you seen an organization invest a lot of money in a system that the business does not think they need or even want. It ends up being underused and at some point, retired along with other systems that the business did not support. This is a more common issue with larger organizations with a lot of money and a lot of competing objectives.

Another thing I would commonly hear from business is that IT moves too slow. Why does it take so long for IT to develop or implement technology. Sometimes a person in the business would build some hodgepodge of technology to support a business process. Then others would begin to use it and it would break far too often or was too difficult to maintain, then they would ping IT to fix it or quickly build a better a solution. IT would explain that when it is built by IT, solutions have to be scalable, reliable, supportable, and also fit within the corporate technology landscape. Often leading to lack of confidence or mistrust.

What about disputes over IT budgets and resource allocation. The business thinks that IT is spending too much on technology that doesn’t directly contribute to business objectives, while IT pushes back with we need more resources to meet the demands of all departments in the business, not just a single department. Those organizations with customer facing applications like e-commerce sites see IT departments often point out that more investments in infrastructure is necessary to prevent poor performance or slow loading times or frequent outages that result in poor customer experience that could damage the reputation of the business

I have never worked with an organization where I have not heard the business complain about IT at one time or another. Even IT complains about IT for that matter. It is natural to have some amount of friction between IT and business because most office personnel use computers and other technology to get their job done. Every time there are any issues like network outages, email issues, slow system performance, it is an IT issue. And it is virtually impossible to avoid all IT issues. However, having better alignment can lead to more opportunities for innovation that lead to competitive advantages and simply drive business growth. Without it, the need can cause the business to look for other resources to satisfy their needs which can cause more friction. I have even seen cases with so much conflict between business that have led to low morale and impacted productivity enough for some employees to leave the organizations.

Communication issues seemed to be the norm between IT and business. This lack of communication can hinder collaboration and problem-solving, making it difficult to address issues effectively. This often appears to be the biggest hinderance to an efficient relationship.

Solutions to improve alignment between IT and Business

So, what can organization do to mitigate these issues ? Organizations should prioritize and actively work on aligning their IT and business functions. This starts with better communication. This can involve regular communication, collaboration, and a shared understanding of goals and priorities between IT leaders and business leaders. Create a shared understanding of the business’s goals and objectives. It may also require the establishment of governance structures and processes that ensure IT initiatives support the overall business strategy.

IT and Business leaders should work together to create a shared vision for the organization’s future. This vision should be based on the organization’s overall goals and objectives.

In addition, Business teams should be heavily involved in the planning and implementation of IT projects from the start. This will enable both IT and business to have a shared ownership in success of these projects and become champions for the success.

As you know, Agile software development is used extensively today. Having Agile Teams when engaging in major projects have a number of benefits. For example, co-locating team members from business and IT can be very beneficial and lead to better communication between IT and the business, better collaboration, more transparency, and improved relationships.

Another tactic for improved alignment is for IT to measure and track its performance against the Business’s goals. This will help to ensure that IT is meeting the Business’s needs.

Another simple solutions that just about all medium to large organizations have but are often underused is for business to invest in IT training and education. IT and Business employees should be trained on how to use IT effectively. This will help to ensure that IT is being used to support the Business’s needs.

In closing, having a closer working relationship, better communication and better understanding of each others’ needs typically lead to much better alignment. By taking the actions mentioned above, the chances that IT and the Business are not on the same page will be greatly reduced and will lead to a much more effective organization.

Please look for next article on Risk #4 next week

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5 IT Risks That Could Cripple Your Business: How to Mitigate Them

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