Much has been written about “Business-IT Alignment” over the years. Alignment can refer to Strategy – the degree to which IT strategy and business strategy are aligned. (This, of course, is both ‘old news’ and yet often not the case in practice. And there’s one school of thought that says there’s no such thing as IT strategy – it’s only business strategy with IT implications.)
Alignment can also refer to Structure – IT capabilities are structured to align with business structures and needs. But there’s a crucial ‘third leg’ to the business-IT alignment stool, and that is the alignment of relationships that sit between business units and IT capabilities.
The Crucial Relationship Manager Role
Many IT organizations have created a role that bridges the business and IT. Rarely actually called “Relationship Managers”, this role represents IT to the business and the business to IT. I’ve posted on this role before – see, for example The IT Relationship Manager’s Role in Expanding Business-IT Capability, and From Supply-Constrained to Value-Constrained IT Business Model, and IT Maturity and the Role of the Relationship Management. Sometimes called an IT Account Manager, or Business-IT Director, or some-such, the role is primarily responsible for ‘demand shaping‘ – stimulating an appetite for high value demand, and suppressing appetites for low value demand. Sometimes, people in this Relationship Manager Role are effectively mini-CIO’s or Business Unit CIO’s – leveraging shared IT infrastructure (and often leveraging common applications and enterprise systems) but taking care of business unit-specific IT needs.
Relationship Alignment
There are at least three dimensions along which Relationship Managers can align with their business partners. The first two dimensions are pretty obvious and generally handled well, but the third dimension is trickier and often not well addressed. The dimensions are:
- Domain Expertise – the Relationship Manager (or whatever title this role operates under) needs to really understand the business domain for which they are responsible. Be it marketing, supply chain, human resources, and so on, they need to have deep domain knowledge in order to bring real value to their business partners and have the credibility to have impact.
- Geography – as the real estate cliché goes, ‘location, location, location!’ so goes Relationship Management. At its best, the Relationship Manager should be co-located with the senior managers of the business unit with which they are aligned. At the very least, they need easy access. The occasional ‘fly in’ to meet with their business partners typically doesn’t do it in terms of creating a productive business-IT partnership.
- Maturity – this is the tricky dimension, and one that is typically not well addressed. Skilled Relationship Managers are a rare resource. You want your most effective and creative Relationship Managers aligned with those business units and executives with the highest demand maturity – i.e., with the best capacity to recognize and leverage high value IT-enabled opportunities. Innovative, ‘change agent’ types of Relationship Managers will quickly become frustrated facing off against executives who are technologically in the dark ages, or who cherish the status quo. Similarly, progressive, innovative business leaders will become quickly frustrated working with a Relationship Manager who lacks drive, a sense of urgency, the creativity to generate valuable ideas about IT possibilities, and the wherewithal to bring them to fruition.
How Healthy Are Your Business-IT Relationships?
Clearly, the CIO is in many ways the ‘über-Relationship Manager’, setting the tone for demand shaping and the strategic context for IT, and typically ‘owning’ the business-IT relationships with the most senior executive team. But no CIO has the bandwidth or domain expertise to handle all the relationships at all the management levels needed to surface and steer the best opportunities to create business value from IT. So, how healthy and productive are your key relationships between business and IT? Do you even know what would be considered ‘key relationships’? How would you know the degree to which they are fully delivering value against their potential?
Let me know your thoughts and experiences around Relationship Management effectiveness.
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Filed under: Demand Maturity, IT Management, IT Maturity | Tagged: Business-IT Maturity, IT leadership, business value, IT Maturity, Relationship Manager, innovation, Add new tag, Strategic management, Chief information officer
Vaughan,
Great blog about relationship managers…nicely follows up your earlier blogs on similar topics.
Matching the relationship manager and the business executive’s ‘maturity’ is something many designers seem to miss…until the frustration level is so high that a change his needed. It’s a subtle point, but this blog makes it really clear and explains how important it is.
Seems to be a dimension missing from the 3 you suggest. Maybe it’s part of maturity or maybe part of geography…but there is a dimension for successful alignment that has to do with the structure of the IT organization itself.
IT organizations whose structure mirrors the businesses they support seem to have more success in aligning with their business counterparts than those that don’t. That is to say that aligning the reward/incentive systems, the control systems, the communication/collaboration systems, and maybe even the level of the relationship manager/business unit liaison are design criteria that every CIO has some control over and which must be considered as part of IT-Business alignment. In my experience, competing structural components bring down a relationship manager much faster than domain expertise (which can be learned), geography (which can be changed) or maturity (which takes time to emerge).
Thanks for the great catch, Keri! My only defense is that I left additional dimensions open (I said, “at least 3 dimensions’!)
But you’ve nicely highlighted an important 4th dimension – structural alignment. I think this is true for many aspects of IT operating model design, but certainly is critical in the design of the integration points between business and IT.
Thanks for important comment!
A worthwhile and ongoing topic Vaughan, but as you know, one that is very difficult to implement successfully. In my experience I have found that some organizations and people are naturually effective and succeed at relationship management in an “unconcsiously competent” way.
When trying to design a Relationship Management (RM) role, the real key is to spend a lot of time and focus on fully understanding and vetting the actual role and responsibilities for the RM versus other key/related roles – e.g., Program/Project Manager, IT Product/Application Manager, Senior Business Analyst, etc.
The four dimensions presented are all necessary, but most people do not spend the time in truly defining and understanding the impacts on all IT roles, processes, and governance mechanisms (governance is especially important to clarify the decision rights for an RM). This includes an ongoing review of the RM role with feedback on how well it’s working and actions that should be taken to keep it on track.
So as a company attempts to implement the RM role to improve Business/IT alignment, is it willing to spend the time to do it right? If poorly executed, it could only add confusion.
All great points, Rocco! Just as the CIO has been a critical role that works best when, 1) The role is staffed by a leader with the right competencies and characteristics, and, 2) The role is supported and reinforced by the right processes and structures, including those associated with business-IT governance.
As you note, this is all tricky to implement successfully. Which is why the research over many years indicates that less than 10% of IT shops in large companies are able to reach and sustain Level 3 – the top level of Business-IT Maturity.
Wow- Amazing timing Mr Merlyn, your consulting skills/experience have reached psychic levels. Imagine struggling with the pains of embedding RM role in our Local Authorities ICT department and then Mr Merlyn lends much needed shoulders to cry on (well at least validation-confirmation of the pain!).
I particularly enjoyed this piece and the responses too. After 18 months of attempting to establish the RM role, we are still having internal wrangles; where should RM’s responsibilities start/end, how to fit other roles such as, Programme Management, Business Analysis and not least other senior managers (Strategic, Technical Architects, Operations) who see RMs somehow occupying a ‘strategic’ position punching its weight above the established hierarchy.
We are now about to embark on (yet another) re-structure (massive cuts in the public sector) , the role of the RM is back in focus. Ours is an organisation with no CIO (not in the manner your readers would recognise) yet somewhere, somehow having RMs in the IT department seems to have been agreed without any clear understanding of the outcomes expected or desired. Now I and my other RM colleagues have to fight internal battles to gain foothold in the IT department and in the meantime, our business customers see us as a route to raise and escalate operational concerns (my Printer, my PC, can you please order this etc. etc.).
This leads me to conclude as you have suggested, a Relationship Manager can only truly demonstrate his capability in a Level -3 Business-IT mature organisation. What should I do? How can I influence to bring the necessary changes?
Your insights are invaluable and prescient.
Umair, thanks for the comment. I wish I did have psychic powers, but the reality is, this is always a hot and challenging topic. I really doubt I can provide much insight via blog commentary, but if you email me, I’d be happy to set up a call to discuss your situation and see if I can provide any advice – no fee for a call like this.
I will say, however, that while Level 3 maturity organizations typically get the most out of a well-designed and staffed RM role, mid-Level 2 organizations can also do well with the role. Much below that, it’s usually a losing proposition (though there are exceptions!)
The risk of RM’s becoming a route to address operational concerns is a big trap – hence the maturity issue – you need sufficiently stable operations and a sufficiently robust help system that makes it easy for the RM to stay out of day-to-day operational issues. If your business partners see you as a “supply manager” (rather than demand focused) you will find it very hard to have credibility and get traction on the demand side.
So, your question to me ends up where all good questions end (or begin?) – “How can I influence to bring the necessary changes?”
That will be a topic of a future post (or series, more likely!) In the meantime, please do get in contact with me and let’s see what we can achieve by phone.
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Again your topic is timely, relevant and well written, with excellent responses as well.
I would add an additional consideration when considering the RM role and the individuals for filling the role. Many, if not most, business executives desire to work with individuals in a service provider role who have the intellectual capability to be close to a peer. Engaging in meaningful conversations about the business and its implications for technology requires balance across the executive and the RM.
Purposeful attention to having RM’s with “processing power” comparable to the executive is powerful in addition to the maturity comments offered earlier.
Thanks, Kerry! And you are absolutely correct in pointing out the need for the RM to be a peer in terms of ‘processing power’. Thanks for adding to this stream!