Strategic IT Alignment May Be Harmful
It's not always the case that better IT alignment leads to business gains and may actually be a detriment to your ulitmate goals. Learn how to avoid creating information backbones that are too inflexible to embrace marketplace change with this analysis. <With all thats been written about the benefits of strategic alignment, its hard to believe IT alignment can sometimes fail to produce a business payoff. Yet in a recent study of 238 midsize companies I participated in, jointly conducted by Boston Colleges Carroll School of Management and the Center for Research on IT and Organizations at the University of California at Irvine, we not only found that this alignment paradox is possible, but sometimes strategic alignment might actually harm a company. 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. Whats behind this "alignment paradox?" Think 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.
A closer look at the data reveals some other insights. Companies that suffered from this alignment paradox did so either because they installed incompatible systems, or they failed to establish a common IT architecture. They were therefore unable to realign their systems and share information as needed when their own strategies or outside business conditions changed.