Lessons in IT Alignment

In my MBA class we begin with a discussion of a model called the Strategy Triangle. This model illustrates the formation of an organization's strategy through the convergence of a business strategy, organization strategy, and information strategy. The point of this model is that strategy is not simply developed from the business strategy but rather it must be developed using opportunities and limitations of the organizational strategy (people, structures, and processes) and the information strategy (data, information, and supporting systems).

Today I read a great article describing the turmoil at J.C. Penny's and the toll taken on their information technology projects. Reading this article from an IT leader's perspective and using the lens of the Strategy Triangle model it is easy to see, in hindsight, that this turmoil was bound to happen. I see two main issues: frequent changes in leadership and the inability to collaborate to develop a cohesive strategy.

First of all there were frequent changes. The CEO was replaced by a new CEO who lead the firm for 17 months only to be replaced by the previous CEO on an interim bases until the next CEO can start next August. Wow! That is overwhelming change! In addition to this, and perhaps as a result of these changes, there have been three CIOs and three e-commerce leaders transitioning in and out of the organization. Each of these changes represent new directions in IT projects, cancellation of projects, and restarting projects that were placed on hold. The unfortunate IT department had no clear direction and, as a result, was not able to successfully accomplish their strategic objectives.

Secondly, the CEO that was brought in to make changes was very aggressive but appeared to try to drive through his vision rather than observe and listen to find out how to best fit his plan into the organization. The article provided a great example of this. The CEO wanted to rip-out the check out stations and replace these with employees roaming the store equipped with iPods and iPads. These employees would checkout customers using RFID tags attached to the clothing items. It may have been a sound idea but the CEO failed to understand the organizational strategy of the checkout processes where the roaming staff would not be able to remove the RFID tags since they were not able to carry the tools to remove the tags. The CEO was focused so much on the business strategy that he failed to acknowledge the organizational strategy of the checkout processes.

This case further proves the value of the Strategy Triangle. Organizations must understand the opportunities and limitations of the people, structure, processes, and information when developing a strategy. The alignment of business, organization, and information must take place to not only identify the best strategy but to also ensure the strategy can be realized.