– Align Journal – Aligning IT and Business Strategy Over my last two articles, I have laid a foundation for a Service Oriented Architecture (SOA) as the enterprise architecture of the globally integrated enterprise and focused on how to define and establish the business side of the enterprise through a well defined business architecture.
Enterprise IT is under great pressure to decrease cost, increase agility and improve speed of delivery. At the same time, IT is presented with a unique opportunity to achieve better alignment with business, which is truly transformational. Undoubtedly, virtualization, as a horizontal technology, has helped datacenters reduce operational costs. Meanwhile, cloud computing, as a service delivery model, will help enterprises shift risk to their service provider and allow them to take bigger steps towards changing business outcomes.
This increased level of agility to help enterprises capture new business opportunities, respond to market changes and address new compliance mandates is a crucial attribute for the transformed IT. The new IT – an amalgam of people, processes and technology – focuses on innovation and less on operation. In this post I’ll explain further. Read onAccording to Gartner’s report “IT Metrics: IT Spending and Staffing Report, 2011,” depicted in the pie chart below, only 14 percent of IT spending in 2011 was dedicated to innovation and new functions that can transform the business. That’s compared to 66 percent of IT budget spent on operations, maintenance and support, or on “running the business;” and 20 percent spent on migration, upgrades, enhancing IT systems or on “growing the business.” Additionally, IT is already stretched with aging datacenters, high energy costs and resource shortages. One can never underestimate the amount of work needed to operate the datacenter in order to keep the business running. Likewise, we cannot ignore the potential positive business outcomes that result from dedicating an additional few percentage points of the budget to innovation and addressing new business functions, challenges and goals.It is only logical for IT to strategically drive towards better alignment with business while shifting operations to service providers that arguably have the economy of scale on their side.
While cost containment and reduction are important, enterprises fundamentally pursue cloud computing for agility and speed. This is particularly true since adopting a cloud computing model is not without frontend expenses. It involves the cost of retiring systems, migrating, re-architecting, re-staffing and evolving many IT processes. This spend will ultimately yield a long-term competitive advantage and significant cost savings.To successfully achieve this level of transformation and gain stakeholders buy-in, it is imperative to sustain deliberate programs to discover these transformational opportunities, identify critical success factors and articulate return on investment.
Why Enterprise Architecture Is Important
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