Lean-Agile Delivery is Powered by Business-IT Alignment
Lean Portfolio Management represents the logical spread of lean-agile practices through IT and the broader organization. As more teams adopt these practices, as DevOps accelerates deployment and feedback loops, the final barrier to rapid learning and market response is planning and management.
You will notice we don’t say IT planning and management because Lean Portfolio Management embraces both IT and Business. Missing this point could be your biggest mistake; understanding it may be the key factor in break-out success as an organization.
Aligning IT with the business has been a top 10 concern since it first appeared in the Society for Information Management (SIM) Studies in 1984. In the last 19 years it was ranked Number One 12 times and in the top two all but one year.SIM 2019 IT Trends Study
The days of the business simply handing some requirements over to IT to build are gone. Business-IT alignment (including collaboration as a condition) is the foundation and scaffolding upon which Lean Portfolio Management and business agility are built.
Business-IT Alignment is at the heart of LPM
Business-IT alignment is the necessary ingredient to accelerate decision making, make optimum investments, and enable your ability to change at speed. This can be seen by examining the opposite.
Efforts to scale up or scale out lean-agile practices generally originate in IT. This makes sense to a point. But, even at the team level, lack of product owner engagement, a poor relationship with the product owner, or a “product owner” who was established by IT but with little decision-making authority on the business side, will result in poor quality, low-value products, and costly waste.
Misalignment Problems at Scale
When this sort of business-IT misalignment occurs at scale, the same bad results occur, but worsened because these poor outcomes are now occurring at scale. The results are continued, unsustainably slow and bureaucratic portfolio management. In the worst case it can result in a “transformation” that creates more administrative overhead, greater confusion, and a weakening market position.
When we attempt to scale at the portfolio level, the impact of the problem is exponential.
How should we leverage IT as an inseparable element of business services and products to forward business objectives? How do we choose? How do we monitor? And, how do we decide in a way that’s adaptable, flexible, and produces optimum solutions? Without initial alignment, and practices that maintain and reinforce it, we cannot decrease cycle time, increase adaptability, or improve the fit and quality of our products and services.
Lean-Agile Delivery is Powered by Business-IT Alignment
Where is alignment needed? At each stage of Lean/Agile Product/Service Delivery from strategy to consumer:
- Business strategy → to → IT portfolio strategy
- Portfolio strategy → to → Budget allocations
- Budget allocations → to → Specific product/Service functionality bets and enablement
- Functionality bets → to → Team level delivery increments
- Delivery increment → to → Customer
- Customer feedback → looping back up this chain with real-time speed and transparency
Read the other insights in this series on Lean Portfolio Management:
No. 1 – What is Lean Portfolio Management?
No. 3 – Lean Portfolio Management and Product-based Delivery
No. 4 – Lean Portfolio Operations and the Power of Simplicity
No. 5 – How Can Lean Portfolio Management Accelerate Healthcare’s Transformation?
What Does Business-IT Alignment in Lean Portfolio Management Look Like?
Here’s what happens at each level when Lean Portfolio Management is appropriately in place:
At each level, business and IT are working together closely using proven methods to shape the next piece of customer value delivery or to pivot in a new direction based on rapid feedback and information flow. At each level, the wise organization includes the customer directly in the process whenever possible. Lean Portfolio Management, when correctly applied, provides the structure for and inherently builds Business-IT alignment.
Some suggest that these business and IT groups will simply become Product Groups and that the primary function of centralized IT in the future will be to create safe environments for these Product Groups to experiment freely and effectively.
If an organization can achieve the kind of Business-IT alignment described above, they will experience the natural evolution of product and service development in response to the fusion of technology with business products and services. Both, CEO and CIO, need to elevate and grow the Business-IT partnership to achieve business agility; not only survive but excel in their market and with their customers.
What we can say for sure is that this model of high alignment between business and IT from top to bottom is the natural evolution of product and service development in response to market demand and the fusion of technology with business products and services. The CEO and CIO need to elevate and grow this Business/IT partnership to maintain and expand markets and achieve business agility.
What Should Business & IT Leaders Do Now?
CEOs, CIOs and COOs take lead by honoring the reality of your product/service strategy and own the vision of a lean-agile organization.
- First, contextualize the urgency for Business-IT alignment as fundamental to your organization’s future.
- Take up the charge by including growth-minded executives who can envision a better path with you
- Ensure that you and your champions are thoroughly versed in the core principles involved
- Envision the future and take incremental steps to get there (see below)
- And, as noted in the first article [LINK] of this series start with a small, vertical slice of the organization and invite participation.
Jump Start LPM in Your Organization
The next few articles in this series will detail how to jump-start Lean Portfolio Management, sharing principles and practices needed to operationalize. Each step can create significant change and will a substantial impact, enabling further Business-IT alignment.
Creating a Powerful Future
None of this is easy, but these are demanding times. The markets will belong to those who rise to the challenge by applying the right practices to achieve business/IT alignment at scale. Lean Portfolio Management is key to enabling that sustainable, market-dominating future.