IT Governance – Strategic Alignment

The first area of IT governance is termed strategic alignment. IT should play a significant role in a business, not just a support role. As such, ensuring the IT strategy aligns appropriately with the company’s overall strategy is crucial. Recall in enterprise risk management, how important it was to ensure our risk approach aligned with the company’s overall strategy. The same principle applies to a company’s IT approach.

For instance, if our company envisions being a world leader in customer service, but hasn’t crafted an IT strategy that aids in tracking its customers and their feedback, then the IT strategy is misaligned with the company’s overall strategy. This illustrates why IT strategic alignment is so vital.

When we discuss strategic alignment, we must consider high-level decisions. For instance, we have to decide on our network design. Do we want a physical network or a virtual network? A physical network implies a physical server room where we store all our data, which will require a significant upfront investment. Alternatively, we could invest in a virtual network where we rent out storage space on the cloud.

Next, we need to consider the size of our company and the number of departments we have. This will help us decide whether we want a centralized network or a decentralized network. A centralized network implies that everything flows through a central hub, meaning all the different departments are dependent on each other. In contrast, a decentralized network allows all departments to function independently. Hence, if the network fails for one department, it won’t negatively affect the others. These are some of the pivotal decisions necessary for strategic alignment.