Business's 'It's not my problem' IT problem | McKinsey – McKinsey

How many times have you heard a variation of “Business and IT need to work better together”? That piece of advice contains one of the most important shifts companies can make to establish a technology capability that enables them to compete effectively in the digital age.
Some companies have made changes, such as giving product managers new product-owner roles. But without sufficient training or changes to team dynamics, those shifts often remain superficial and don’t improve team performance. Too many companies are still too quick to point the finger at IT for every technical woe, from development delays to cost overruns. Casting IT as scapegoat can be a hard habit to change.
That’s not to say there isn’t plenty of room for improvement on the IT side of the house. Efforts to modernize technology—from addressing tech debt to migrating to the cloud to building up tech talent—all require significant improvements in how IT works and where it sets its priorities. But in a time when the technology capability is a source of competitive advantage, why doesn’t that happen more often?
There are many reasons, but the solution comes down to something that’s deceptively simple: if IT is to become a real driver of value, both business and IT must overcome bad habits and make a real commitment to being partners. That implies adoption on both sides of processes, mindsets, and capabilities that reinforce the mechanisms that nurture habits that can improve technology performance.
Seven lessons on how technology transformations can deliver value,” McKinsey, March 11, 2021.
Anusha Dhasarathy, Isha Gill, and Naufal Khan, “The CIO challenge: Modern business needs a new kind of tech leader,” McKinsey, January 27, 2020.
Erik Jan S. Poelen, “The implications of business-IT alignment for business value of IT,” MSc thesis, Tillburg University, 2017.
Because technology can seem confusing, opaque, or intimidating, those on the business side prefer to leave it to the IT experts. To bridge the disconnect, companies have turned to dedicated “go-between” roles as part of a well-meaning effort to make IT more responsive and customer oriented. Individuals variously designated as “translators,” “demand IT,” “business requirement managers,” or “IT process managers” take business requests and turn them into clear requirements with instructions for workers on the IT side, many of whom work offshore.
Unfortunately, the effect of these roles is often reduced accountability on both sides of the divide. On the business side, managers are content to define requirements without understanding how technology can best deliver on them and to, in effect, wash their hands of the whole IT development process. On the IT side, translators often simply accept requests from the business side without understanding the core issue, so they don’t think through the whole range of possible technology solutions. Even when the go-betweens speak for business needs and even report to or sit on the business side of the organization, they are seldom evaluated in terms of their P&L results. Meanwhile, the addition of an intermediary layer between business and IT slows time to market, which impedes digital efforts to accelerate the pace of business practices.
The ultimate goal is to connect the top-level business strategy defined at the board level to technical implementation in IT. That means negotiating four levels, and business needs to be knowledgeable about, and involved in, all of them:
Each of these four levels can accelerate or slow down the development of new internal or external functionalities for the customer. But for the entire model to work effectively, it is important that the levels are aligned in their degree of maturity; being strong in one area and weak in another doesn’t work well.
The measure of something’s importance to an organization is the seriousness with which it is addressed at the top levels of leadership. That means both the C-suite and the board should have technology as a top priority on their agendas. Without that, the business will have a difficult time making the decisions and investments needed to modernize and scale technology.
There are two actions top management can take to demonstrate their commitment to IT:
When the board makes a tech-related decision, it is primarily up to the business to translate it into a business process that can be implemented. That requires the business to work with IT to set KPIs, put together the right teams, and develop strategic road maps. Business stakeholders need to build specific capabilities and shift mindsets across the following dimensions:
An effective operating model has a defined business process and the technology capability to deliver it. An operating model, however, is only as successful as its ability to incorporate the business side through effective governance practices. Following are a few proven steps:
When it comes down to actually developing technology products and services, companies need to navigate a lot of buzzwords (DevOps, DevSecOps, agile, CI/CD). In essence, these are processes that all encourage closer collaboration at the operational level to reduce waste and accelerate time to market. While it’s not realistic for the business to be involved at the coding level, understanding how supporting systems can impact development is critical to helping prioritize investments and resources, particularly in two areas:
Effectively bridging the gap between business and IT requires alignment across the four levels outlined above. This interdependency is why it’s much more important that all the elements reach similar levels of maturity than to have a few that perform well and a few that perform poorly. This is the classic “weakest link” principle, where weakness in one area is sufficient to undo the whole (exhibit).
A business might have a fantastic agile program where business and IT work together, but if they don’t address technical debt for the products they’re developing, for example, that working relationship is not well served.
Companies should figure out their basic levels of performance across these various elements to identify performance inconsistencies. This analysis needs to highlight breakdowns in the business–IT relationship and areas where that relationship should focus its energies. To help companies develop a view of their business–IT working effectiveness, we have developed a quick diagnostic with questions that correspond to each level.
How much time does IT get in your board meetings?
How comfortable are your C-suite and board with technology topics?
How often do employees move roles between business and IT along their career path?
How quickly can you make decisions that have a major impact on digital products?
How well integrated are business and IT teams and governance?
How are product teams managed?
What are the key decision criteria for starting a new IT project?
How often do you get new functionalities to end customers?
How automated is the process for a developer to start a new project for a new application?
For most businesses, the technology capability is crucial to staying competitive and is likely to remain so. In many of our company reviews, we find that the business side of the house is consistently behind when it comes to building bridges to IT. The sooner the business treats IT as a strategic capability, the sooner it can harness the technology it needs to deliver value.
Oliver Bossert is a partner in McKinsey’s Frankfurt office, and Björn Münstermann is a senior partner in the Munich office.


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