SAP IT convergence

My last post on SAP IT Convergence is About Business Focused Integration provided an overview of Business – IT Convergence and why it is important. This week, we look at some of the key principles around creating SAP IT Convergence, including some steps on the path to convergence.

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What Is the Difference between Business to IT Alignment and Business – IT Convergence?

Convergence and alignment have an important distinction. Business to IT alignment works to mature the IT organization for synergy in applying technology to business goals. On the other hand, convergence seeks to blur the lines between IT and business– IT becomes a key component of the business itself. The alignment seeks to have IT and the business work together, while convergence seeks to fully integrate the IT organization into the business. Alignment is more like transactional processing and is focused on operations, whereas convergence seeks to integrate IT functions so they have a direct impact on customers and markets.

Business & IT Alignment is the degree to which the IT applications, infrastructure and organization, the business strategy and processes enables and shapes, as well as the process to realize this (Silvius and Smit, pg. 2, 2011 citing Silvius, 2007).

In the last several years, Business to IT Alignment has seen progress as it has employed the “SAM” (Strategic Alignment Model) (Silvius and Smit, pg. 2, 2011 citing Luftman, 2000), but the concept still has much further to go. Rather than alignment, the real domain of IT Convergence is around business value. One widely accepted academic definition around this is “[b]usiness value can only be derived from the efficient and effective utilization of information” (Hedman pg. 2, 2010 citing research from 2000).

What is Wrong with Business to IT Alignment?

As I continue to explore these topics, a consistent theme continues to emerge: SAP, IT, or the technology organization are supposed to work with the business toward alignment. So what’s wrong with that? This approach allows your technology organization to stay separate from the business, so true integration or convergence never really occurs.

IT Convergence occurs where business and technology grow together, causing business opportunities to expand.

Business to IT Alignment creates a focus on operations (which is important), but too many information silos continue to exist. Convergence, on the other hand, efficiently and effectively utilizes information to affect business outcomes, not just measure business activity.

Business to IT Alignment is focused on business activity (transactions), while Business to IT Convergence is focused on business outcomes (results).

Because of the lack of IT Convergence, the technology organization separates from the business, so they must specialize in providing information. As a result, they leave the business portion of the “utilization” of the information up to the business. Some of the symptoms of this are when IT waits for the business to tell them “we need x report in y format” or “we need to do z type of processing.”

SAP IT Convergence Integrates the Technology Organization and Business

During your SAP project one of the key benefits to the business is the process oriented integration of all departments. The whole business comes into a single database with opportunities for both improvement and standardization. Organizational silos are broken down and dependence across the entire process chain is created. Throughout this difficult transition (and after the SAP go-live) the SAP or IT organization remains separated. Beyond reactive support (help desk, enhancement requests, bug fixes, etc.) there is little done to create IT Convergence between the business and IT functions.

SAP IT Convergence is Focused on Business Integration and IT Innovation

Stop and think about this recent quote by Mark Dean, Engineer of the original IBM PC:

Innovation flourishes best, not in applications or hardware but, in social places where people and ideas meet and interact…

This is what SAP IT Convergence is about. How does this apply to your SAP or IT organization? This whole idea goes beyond technology and integrates the interaction of business and IT to converge the organizations.

A converged SAP organization uses technology as a change lever for business competitive advantage. The primary focus is on innovation and customers by leveraging SAP, IT support staff, and other technology investments to achieve measurable business outcomes.

SAP IT Convergence occurs when IT is part of the business and not just SAP, IT support, or the IT organization. A few characteristics of an SAP IT Converged organization include the following:

  • SAP and IT staff communications, internally and externally, are more in business language rather than technology jargon.
  • The organization proactively seeks out new business opportunities.
  • The business can interpret, and then implement, business marketplace requirements by turning them into technology solutions.
  • The organization adapts to business market conditions.
  • The organization is not worried about the latest “techie buzz,” unless there is a direct business marketplace connection.

I describe this full SAP IT Convergence as an SAP Center of Excellence. If you would like more understanding around the SAP Center of Excellence concept, please see this SAP ASUG presentation on SAP & Business Convergence.

Conclusion on Steps to Achieve SAP IT Convergence

As time goes on, I will address many of the items below in more detail. Here are some of the key things to consider for creating IT Convergence within your SAP organization:

  • KPI full court press
  • Steering Committee Engagement
  • MBA in the organization
  • Mobile BYOD
  • Internal consulting on business direct buy technology solutions
  • “Exchange staff program” to integrate the IT organization into the business
  • Invest in technical and NON-TECHNICAL IT training
    • Facilitation skills
    • Questioning and Negotiation
    • Meeting skills
    • Conflict management and resolution
    • Managerial skills

This approach helps your organization develop business skills and business understanding, which naturally leads to the better utilization of technology and information. SAP IT Convergence is impossible if you can’t both speak the same language and have a similar cultural understanding. Since the business is unlikely to learn ABAP, Java, SQL, or settings in the IMG, it is up to you to be the Business IT ambassador to bridge the gap.

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For more information and background on the concept of IT Convergence in the SAP enterprise, you might want to consider the following posts:

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Hedman, J. (2010), ‘ERP Systems: Critical Factors in Theory and Practice’, Center for Applied ICT, Copenhagen Business School.

Luftman, J. (2000), ‘Assessing Business-IT Alignment Maturity’, Communications of the Association for Information Systems, Vol 4, Article 14.

Silvius, A. (2007), ‘Business & IT Alignment in Theory and Practice’, 40th Hawaii International Conference on Systems Sciences (HICSS-40).

Silvius, A. and Smit, J. (2011), ‘Maturing Business and IT Alignment Capability; the Practitioner’s View’, 44th Hawaii International Conference on System Sciences (HICSS-44).

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