Avoiding the Alignment Trap in IT Harvard Case Solution & Analysis

For many years, companies seeking to provide greater business efficiency through the use of IT have focused on alignment - the degree to which the IT team understands business priorities. In practical terms, this means that there must be common ownership and common management of IT projects. However, the authors claim that their study shows a disturbing picture: even in companies that have focused on alignment, business performance depends on IT sometimes goes sideways, or even declined. This is because the inefficient opportunities are often based not only on the shift, but also in the complexity of systems, applications, and other infrastructure. Complexity does not magically disappear just because the IT organization learns to focus on relevant projects, and at least leveled them. On the contrary, the authors say, in some situations it may actually get worse. Costs are rising, growth delay, and the fragmentation makes it difficult for managers to coordinate between business units. The study also showed that nearly three quarters of respondents are mired in a "service area." IT in these companies are usually ineffective, underestimated, and all pretty much separated from the main company's business functions. Corporate governance budget amounts needed to keep the system running, but it does not give enough value in the business, and often expected. Based on the experience of Charles Schwab & Co, Selective Insurance Group, De Beers, First Data Corporation and National City, among other things, the authors identify a group of best practices, which are the "IT-enabled growth." "Hide
by David Spielberg Steve Berez, Rudy Puryear, Sachin Shah Source: MIT Sloan Management Review 10 pages. Publication date: 01 Oct 2007. Prod. #: SMR260-PDF-ENG

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