Business–Provider Alignment Model
The purpose of the (IT) Service Provider is to serve the needs of the business. This is carried out by providing services to the business which are then engaged to provide some form of value to both the business and the Service Provider. Often the value delivered is less than optimal because the Service Provider and the business have different perspectives, culture goals, objectives, and incentives.
The Business-Provider Alignment Model (BPAM) provides a framework for being able to analyze and understand these differences between the provider and its business partners. By engaging the BPAM we can begin to surface dialog about the relationship between the provider and the business and begin constructive discussions about the partnership that needs to be created. It does this by allowing each party to exam the four key elements of alignment – business environment within which the business operates, strategic context for the business, provider strategy and the provider portfolio of investments, assets, and capabilities. It also identifies the barriers that typically exist between these elements inhibiting alignment or convergence. These barriers are identified as the Expression Barrier, Specification Barrier, Contextual Barrier and the Implementation Barrier.
Let’s first examine the four elements to alignment:
Environment – these are the boundaries within which the business operates. It helps to define opportunities, threats, and constraints. These factors can have an impact on the Strategic Context and the IT Provider Portfolio.
Strategic Context – relates to the businesses products, markets, investments, and customers. Also with in the strategic context are the elements of strategic intent, core competency, business governance and the current strategy. The Strategic Context will drive the overall IT Strategy.
IT Strategy – The components of the IT Strategy are roles of IT, deliver IT services and architecture. These articulate how the provider will enable the business partners to achieve their goals and objectives. The IT Strategy and the IT Portfolio must align.
IT Portfolio – This describes the total investment in IT. Within the portfolio, we have four types of investments. Informational which provide better information for the business, strategic which help the business to gain a strategic advantage in the market space, transactional which helps to reduce the cost of doing business and finally infrastructure which helps to provide a base capability.
Let’s now examine the four barriers to alignment:
Contextual Barrier – What drives our behaviors? Culture can be deeply ingrained in an organization especially one that has been around for any length of time and can include such factors as the culture of accountability, clarity of roles, rules of engagement, the degree to which an organization is relationship driven versus rules and roles driven and the organizations over all resilience and resistance to change.
Expression Barrier - Strategic Context can be hard to define in any specific terms. There can be a lack of clarity because of this ambiguity. There is usually some form of articulated business strategy, but sometimes it is vague and unclear as to what is actually meant by the strategy. Often there is this disconnect between articulated strategy (Strategic Intent) and the actual strategy in action. Talking to the most senior executives will often give you a reasonable sense of Strategic Intent, but talking to line business managers reflects something quite different—often driven by performance management systems and prior strategies that have supposedly been replaced.
Specification Barrier - This relates to the difficulty of determining just what the Business Partner wants the IT Service Provider to do. The business Strategic Context can be ambiguous due to the Expression Barrier that surrounds it. The Provider strategy can be equally unclear due to the Specification Barrier that surrounds it, too. Getting clear on the Role of the Provider in the enterprise can be challenging. Is it an enabler or a strategic driver? Should it respond to the business strategy or inform it? Reaching consensus on this across key stakeholders can be very difficult. Once the Provider role is clarified, figuring out what Provider capabilities are needed, and how they should be best sourced can be extremely challenging. Finally, governing the Provider as a strategic business capability is a constant challenge for most organizations. Getting business executives to understand and agree to the necessary priorities for IT investments demanded by the business strategy is complex and difficult. They would much rather let the Provider organization figure out how to meet that demand. The Business Relationship Manager (BRM) plays a key role in overcoming the Specification barrier.
Implementation Barrier – This refers to the things that prevent the development of an IT Portfolio that support the Business Strategy. There are many things that work together to form a barrier to implementing a portfolio that properly enables the business Strategic Context and aligns with the Provider strategy. A poorly integrated Provider infrastructure in part due to both the Expression and Specification barriers where years of unrelated acquisitions of technology and infrastructure drove up the cost of that infrastructure, restricted its flexibility, and then starved investments from Utility transaction processing, IT capabilities that Enhance business capability and new leading edge capabilities that could drive growth and business innovation.
By engaging the Business/Provider model, these elements of alignment and barriers to preventing alignment become more visible and easier to identify and overcome.