This article explores a practical way to visualise the alignment between business strategy, IT strategy, and IT service capabilities. By understanding these dynamics, organisations can reduce waste, improve efficiency and maximise the value of IT services.
In summary:
- Strategic alignment links IT services and business strategy to deliver value, reduce waste and meet demand. High alignment drives efficiency and relevance.
- Think of it as layers made up of: Strategic Intent, Market Space, Demand, Opportunity and Capability.
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It’s continuous, requires governance and can be improved through frameworks like ITIL®, IT Service Management, SIAM™ and Leadership training.
Why does service management matter?
When business strategy, IT strategy, and IT operating capabilities are misaligned, hidden costs and inefficiencies arise. It can result in:
- Wasted IT resources and underutilised capability
- Missed opportunities to meet business demand
- IT services that fail to support strategic objectives
Misalignment is generally regarded as a bad thing.
High alignment helps IT services support business goals, minimise waste and respond effectively to evolving market conditions.
This is a core principle of IT Service Management and is reinforced by modern frameworks such as ITIL and SIAM, which place strong emphasis on value, outcomes and alignment with business strategy.
A Visual Metaphor for the Alignment Elements
Alignment can be thought of as multiple interacting layers. Optimisation occurs when all layers stay in sync:
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The business layers, represented by
- Strategic Intent
- Market space
- The IT service layers, represented by
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- Demand
- Opportunity
- Capability
The Layers – Business
Market Space
- The market segment or market space in which the business is attempting to operate
- The market space changes over time, through both movement of the market participants and the changing demands of the customers.
- Recognising and responding to these changes is a leadership responsibility and a key theme in IT Leadership and Change Management disciplines.
Strategic Intent
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Where the business is attempting to go:
- Remain in market space, improve in one or more aspects
- Move to new or different marketspaces
- Extend into additional market spaces
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Strategic intent manifests as a business strategy and the behaviours aligned to achieving that strategy
The Layers – IT Service Management
Demand
- The consumer organisation’s desire/want for IT services
- Includes the types of services, their scope, and value
Opportunity
- Service options or additions that the service provider has recognised as having potential value to the customer organisation
- The service provider may not have the ability to deliver
Capability
- The ability of the service provider to deliver services
- Expressed in terms of service competency, coverage, quality, technology, scalability, resources, speed etc
- Un-utilised or under-utilised capability is overhead for the service provider
Applying the Concept – High Alignment at all levels
High alignment at all levels is the ideal outcome for all parties – but it’s important to remember that it’s only ever temporary.
Internal and external changes can move each layer, so alignment is always a process that reacts to business priorities or market conditions.
In this High Alignment representation:
- The scope of Strategic Intent is expressed in terms of a defined market space
- Capability, Demand and Opportunity are in high alignment and cover the scope of the Strategic Intent
- Both Opportunity and Demand can be met by a matching Capability
- Over-servicing or under-servicing is minimised
- IT Services support the Strategic Intent
Achieving High Alignment
High alignment happens when all parts of an organisation work together clearly and effectively. Key elements include:
- There is clear and active corporate governance at all levels (business, IT, service management)
- Market conditions and market space changes are used to inform and evolve business strategy
- Business vision and strategy are clear and communicated at all levels
- Expected business behaviours are defined, encouraged, and monitored
- Service provider(s) are selected on the basis of ability to support the strategic intent
- Service provider(s) have the skills and resources to engage and deliver relevant and valuable services even whilst the service and business landscape evolves
Applying the Concept – Low Service Provider Alignment
Low service provider alignment is a situation neither the business nor the service provider should accept. In reality, it sometimes gets overlooked. This could be because the misalignment isn’t recognised, there’s a reluctance to change due to sunk costs, contract constraints or simply no strong reason to act.
In the extreme example depicted below, multiple sources of lost value are identified:
- Wasted or under-utilised capacity
- Lack of recognition or qualification of demand for which a matching capability exists
- Unsatisfied and potentially uncaptured demand
- Lack of capability to meet known and quantified demand
- Sets of opportunities to add value, but without any corresponding demand or capability (this is a particularly odd situation, where the provider is offering things that it can’t do, to a disinterested audience…).
- There is excess capability and opportunity to offer services, but no corresponding demand (no longer interested, too new and unusual, irrelevant to consumer organisation needs)
Potential Causes of Low Alignment
Multiple possible causes across both business and service providers. Examples include:
- Lack of clear business strategy due to poor leadership, governance or unfit business processes
- Lack of clear business strategy due to overwork dragging focus to immediate operational issues
- Missing a significant shift in the size or shape of the marketspace, competition, or customer expectations
- Failure to treat IT as a strategic enabler – the last to know about business intentions but then criticised for inability to respond
Yes, great diagrams, but so what?
This conceptualisation may be useful for generating discussions in your organisation around your current state of alignment:
- Are we sufficiently mature to have conversations about value and strategic alignment? What are the barriers to achieving this?
- What is the consumer and service provider’s perceptions of the current state of alignment?
- Does anybody have the ability to measure alignment or misalignment? What metrics would be the indicators for this?
- Are we capturing and using any of this information?
- What are the effects of any known misalignments?
- What action is being taken to reduce or halt misalignment?
- Do we know why the misalignment has occurred? Could we have detected it earlier?
Want to Know More?
Contact us to discuss further – have a chat, identify education and certification options, or maybe seek assistance to detect and correct misalignment.
Discover our training courses and customised workshops designed to help professionals bridge the gap between strategy and delivery.
FAQs:
Can IT Service Management alignment be measured?
While alignment is not always easy to quantify, it can be monitored through indicators such as service performance against business outcomes, demand fulfilment, customer satisfaction and levels of unused or overstretched capability. These measures provide insight into whether alignment is improving or deteriorating over time.
Is ITSM alignment a one-off activity?
No. Alignment is a continuous process rather than a fixed state. Changes in business strategy, market conditions, technology and organisational structure all affect alignment. Effective IT Service Management includes regular review and adjustment to maintain relevance and value.
How can training help improve IT Service Management alignment?
Training helps build a shared understanding of value, governance, demand and capability across business and IT teams. Courses in IT Service Management, ITIL® 4, integrated ITSM, IT Leadership and SIAM™ provide practical frameworks and language for improving alignment in real-world environments.
