Optimizing Organizational Investment Through Business and IT Alignment

    Over the past decade, many software development companies have made significant investments in adopting agile principles to streamline the development process. The result has been more efficient delivery of higher quality software—but this is only half the battle.

    For a company to truly maximize the value they provide to their customers, they must expand on these principles to make the rest of their business “agile” as well. This means tracking the appropriate metrics and leveraging data analysis to help the organization make the proper investment decisions and ensure business and IT alignment (one of the core tenets of BizOps). Keep reading for an overview of the major principles for aligning your entire business and improving the return on your investments.

    Why Is IT Alignment with the Business So Critical?

    If simply leveraging the principles of agile development results in higher quality software in a shorter time frame, then why is it necessary to go any further? Actually, it can also enhance your business’ ability to make effective data-based decisions that are critical for long-term success. To fully reap the benefits, different facets of the business must share information and work in sync with the PMO to determine the direction of the company on a continuous basis. This business and IT alignment is critical for a variety of reasons.

    Businesses Must Be Able to Adapt Quickly to a Changing Market

    Businesses need to be able to change direction quickly when circumstances change. For instance, maybe a new company has released an effective new piece of software that targets a significant portion of your customer base. This would constitute a disruption in the marketplace and would require a swift response to avoid hemorrhaging customers.

    In this case, the project management office (PMO) needs to be able to easily redirect resources to quickly implement adjustments to your product. If the PMO and development teams can’t do this, the consequences could be catastrophic, and your business may not be able to remain viable in the marketplace.

    Great Ideas Require Immediate Attention

    Development organizations should always prioritize value, and they should place the highest priority on the project that will provide the greatest value for their end users. They should also listen to their employees; an employee might have a great idea for significantly increasing value, such as a new feature that will catapult the product above everything else in the market, or he or she might have a good idea for reducing overhead in a way that saves the organization a significant sum of money in the long term.

    In any case, organizations need to have the insight and the latitude to address valuable ideas immediately. This can only be done when PMOs have the data that they need to evaluate the potential impact of the idea, and the agility that they need to reallocate resources as needed.

    How to Invest Effectively

    So now that we know why agility and business and IT alignment are so critical, let’s take a look at how they can be achieved. All organizations that are striving to improve their value and efficiency in the market should consider the following:

    Utilize Data to Make Proper Investment Decisions

    One of the biggest challenges for a PMO is to make sure that resources are being appropriately utilized, meaning that the projects being undertaken by development staff are the ones that will bring the most value to the organization.

    These decisions should be based upon data that helps determine which projects will be the most valuable. This could include an estimate of the projected increase in revenue or the projected decrease in the amount of time that it will take to perform a certain process. The data may also indicate that a certain feature will be necessary, or at least highly coveted by existing customers. Implementing such a feature may not necessarily raise revenue, but it may stop customers from trying out other products that do provide this type of functionality.

    Staying on top of the data and determining which projects will bring the most value to the organization is critical for success.

    Track the Progress of Organizational Investments

    Truly effective PMOs shouldn't need to monitor the day-to-day progress of development activities; however, they should keep tabs on the internal data that helps them track overall progress and gauge the landscape so that they know which resources may be available if priorities need to be adjusted.

    These metrics may include insights into software quality that indicate that a project is moving forward effectively and not creating technical debt. They may also include workflow diagrams that ensure that the scope of the project is being addressed appropriately and that it is moving at a pace that fits the timeline.

    Monitor Investment Performance

    Like all aspects of product development, making calculated investments at an organizational level is an iterative process. Nobody gets it right 100% of the time. This is why it is important to track investment performance after delivery.

    The data that documents the success or failure of the undertaking (which is collected by various facets of the business) will be critical for determining investments moving forward. By tracking performance, for example, it may become evident that the methods used for assessing the value of projects prior to implementation should be adjusted to more accurately represent the value post-implementation. Based on these insights, businesses can make adjustments that improve their ability to evaluate products and utilize their resources more efficiently and more effectively.

    Continuous Evaluation Helps the Business Steer the Ship in the Best Way

    Most organizations are highly educated about the space in which they operate, but nobody has a crystal ball that shows them where their market will move next. The best organizations, therefore, focus on enabling different sectors to continuously evaluate all aspects of the business (including customer expectations, disruptive forces in the market, and more), rather than developing a roadmap that predetermines the direction of the business two years down the road.

    Establishing true business and IT alignment requires teams to become more agile. Effective development organizations, for example, should plan for the next quarter and the quarter after that, but also leave room to adapt quickly when the data (from marketing, finance, or anywhere else) indicates that they should. In addition, they should continuously refine their processes for evaluating the data that helps to ensure that they extract maximum value from each investment.