BUSINESS ALIGNMENT IN THE OIL AND GAS INDUSTRY: ON THE ROAD TO SUCCESS WITH THE RIGHT SOFTWARE AND INFORMATION STRATEGY
Alignment issue: Software-intensive systems and services are becoming increasingly important in today’s information society and thus constitute a central driver for innovation and growth in an organization. One of the consequences is that business success depends on IT and software strategies and that it is extremely important for an organization to look at these strategies in the context of the business goals pursued and to align them accordingly across the entire organization. This comprises the systematic derivation of IT and software strategies from business goals on the one hand and the ability to clearly demonstrate the contributions made by IT and software development to the business goals on the other hand.
In order to address these issues and to provide systematic support for “Business Alignment“, the GQM+Strategies® approach has been developed in recent years. This approach uses goal-oriented measurement processes to support the explicit alignment of goals and strategies across all levels of an organization. Goals, strategies, and measurement data are systematically aligned with each other, gaps and inconsistencies are shown, and the derivation of action recommendations is facilitated by means of a decision model.
Actions and results: In the year 2010, ECOPETROL, one of the worldwide leading companies in the oil and gas industry, launched an initiative for better aligning its IT- and software-related activities with its business goals. This initiative changed the traditional role of IT from a classical service provider and replaceable cost factor to a central information provider that contributes to the company’s success by providing high-quality information when critical management decisions must be made. To achieve this, the goals and strategies of the IT department had to be mapped to the business goals of ECOPETROL and their value had to be made more transparent in terms of the overall organization. In addition, a KPI system was developed to enable the objective assessment of the success/failure of a strategy and its optimization over time.
The application of GQM+Strategies® has shown that its use can noticeably improve the transparency and traceability of strategies and goals:
- Transparent description and harmonization of goals, strategies, and measurement data across all organizational levels.
- Clarification of the value contributed by IT and software development in terms of the organization’s business goals.
- More consistent communication of goals and strategies across all organizational levels.
- More objective decision making by measuring the achievement of goals and the success/failure of strategies.
- Clear rationale why goals and strategies are pursued.