Aligning IT Organizations with Business Strategy

It's typical for leadership staff within IT organizations (i.e., VPs/CIOs) to organically advance through technology ranks, silo'ed to focus on the latest technologies or the latest delivery methodologies. The broad-scale shift to digitalization of business processes within all functional areas now requires that CIOs shift from delivery executives to business executives.

Not only do CIOs need to align their organizations closely with business strategy, but they also need to act as one of the key executives to drive business growth.

At Crosstrees, we have built our IT services to encompass this exact concept: that

For optimal organizational performance, modern IT executives need to fully align their organizations with their company's overall business strategy.

When it comes to IT strategy, here are a few considerations:

Reporting structure

One of the main alignment indicators is the way IT is organized within the company. It's probably no surprise that many companies still view IT as a cost center. We recently worked with a multi-billion dollar global public company where the CIO reported to the CFO, and we have experience with companies where the CMO was responsible for IT (what?!). This perspective clearly signals lack of focus on IT as a business driver, and pushes IT to a purely operational role. The CIOs of companies who focus on IT as a business driver report directly into the CEO, with tight involvement with all aspects of the business.

Direct Impact on Revenues

It's typical to think of IT organizations as helping their companies with efficiencies and cost savings through business process automation, better planning, etc. However, high performing IT organizations also have a direct impact on company revenues and touch all aspects of their company's growth metrics. According to a Gartner Symposium survey of over 3,000 CIOs globally, 84% of CIOs from "top digital performers" have responsibilities outside of IT. These companies also generate more digital revenue and have more digital processes than their typical peers.

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There are many many examples of CIOs driving extreme revenue growth, and in fact, they are now expected to be actively involved in revenue generation. And no, you don't need to be the size of GE to use these as guiding principles.

Business vs Technology Approach

While IT organizations can't take their eyes off the latest technologies, there will be a shift to move beyond operations with less focus on deep technology (typically offered through vendors), and more focus on organizational needs and trajectory. Not only at the VP/CIO level, all mid level and line managers in IT will also need tight collaboration with various functions within business in order to solve their business needs through the use of technology.

A shift in skill set within IT will align it better with the company's transformation and growth. Internal staff with skills such as user experience design, cloud architecture, analytics, and API expertise can help companies lead their digital transformation. Information and data analytics will lead companies in various aspects of the organization including revenue growth.

IT Involvement in Innovation

According to a Harvard Business Review Study [PDF], the CIOs of "innovation accelerators" are significantly more likely to spend their time on activities that are strategic to the business. The innovation accelerators also have strong IT departments that actively and productively contribute to the corporate innovation agenda.

Innovation can involve product development, logistics, sales/marketing, or internal operations: ways in which the company excels in doing things better.

Crosstrees offers IT/technology services including IT strategy, program management, business process automation, and related services. Feel free to contact us to discuss your technology needs.