Changing Demands for IT and Business Alingment
Traditionally, Information Technology (IT)/business alignment has focused on governing IT project priorities from a list of business demands, often with IT working within a limited budget and with limited resources. The outcome is typically a response to the business cascading its priorities down to IT. In other words, the business tells IT what it needs and IT responds with how to do it. In this common scenario, the IT role is one of technical advisor, with limited consideration toward shaping the overall business strategy. If done successfully, traditional IT/business alignment guarantees efficient computing services and contributes to reigning in overhead costs. However, in response to today’s fast-changing business climate - in large part due to accelerating technology advancements - many IT departments are being challenged to increase business-value generation by creating innovative revenue-producing products and by differentiating business services with the goal of winning work.
Over the past few years, the engineering and construction (E&C) industry has experienced many challenges and has witnessed the entry of many low-cost competitors, creating a growth-constrained and commoditized business environment. To compete in this market environment, firms seek to transition into more profitable market niches, whereby innovation and specialization become critical differentiators. Leading E&C firms are primed for leveraging IT to enable productivity gains and to create the digital products and services necessary to gain market separation. Competencies in the areas of networking, security, cloud platforms, databases, application development, system integration, Business Intelligence, and analytics are key differentiators.
The competitive landscape across all industries has created an urgency for many firms to implement a modern digital business strategy in which digital technology is central to innovation, differentiation, and generation of top-line revenue. Whether the desire is to create a new digital product or a new digital service, IT thought leadership has become highly valued for shaping the technical components of the strategy. Unfortunately, many IT organizations may not yet be knowledgeable enough about the business aspects of the company strategy-such as product development, sales, and marketing- to effectively contribute to the larger conversation.
IT/business alignment will evolve beyond the one-way flow of business priorities to IT. Such realignment will be more effective when IT is a partner at the business planning table. IT must prove its worth as a trusted advisor to business leadership, the foundational test being delivery of services and cost excellence over time. More critically, IT must also demonstrate its business acumen to earn a seat at the strategy table. This can start with successful performance of IT-enabled business process automation efforts as well as through the successful delivery of IT services to external clients. Both represent highly collaborative efforts with business leadership and provide successful market learning opportunities for IT.
This alignment to a maturing digital business strategy is still very aspirational in many firms competing in the E&C market. Thus, IT departments in this market sector often experience four significant headwinds, which limit their strategic effectiveness:
1. Demand on IT to respond to ad hoc business development efforts throughout the year- If awarded, client projects take on the highest priority, which often bumps an internal initiative into a lower priority
2. New technologies for innovation require staffing, time, and funding- Unfortunately, IT funding is typically constrained; thus, important projects outlined in the digital business strategy do not advance as planned.
3. Proliferation of Internet of Things (IoT) technologies and the demand on E&C firms to implement smart infrastructure/industrial solutions— This move to smart applications justifies the need for collaboration between previously siloed IoT, facilities management, operational technology, and IT disciplines. If not managed effectively, this interaction has the potential for governance and management inefficiencies as well as security vulnerabilities.
4. IT staffing and culture -This becomes a significant concern when IT departments are trying to recruit staff with the necessary innovation and start-up mentality required for creating digital products for advancing business services.
At Parsons, we have acknowledged these industry challenges. Parsons’ IT organization is committed to being agile in support of Parsons’ evolving client digital business demands. Agility requires revitalizing our core systems embracing modern computing architecture and implementing new IT processes to cut time and costs (e.g., devops, agile project execution, and bimodal application development). To this end, IT is reducing complexity by carving off its administrative responsibilities and outsourcing them to more effective and lower cost providers. In addition, IT is infusing its remaining organization with new talent, new forms of employee engagement, and new partnerships for keeping pace with changing technology. More importantly, IT is becoming more consultative with business on matters such as innovation, product development, and marketing. Traditional IT/business alignment needs will not go away, but the new alignment to a digital business strategy will advance Parsons’ competitiveness and overall business growth.
A recent benefit of the digital business strategy alignment is Parsons’ ability to implement smart infrastructure/industrial solutions as evidenced by its recent recognition as a 2017 CIO 100 Honoree for its involvement in Dubai Design District’s (d3’s) Smart City Information Communications Technology (ICT) solution. Parsons designed the ICT infrastructure to leverage sensors, wireless and fiber optic networks, and cloud infrastructure for enabling d3 entities to define, build, and orchestrate smart applications. These types of solutions and the countless other innovative and transformational solutions we deliver to our clients further demonstrate the significance of IT/business alignment by driving our competitiveness and improving our financial performance.