Whose Job is Governance? The Reason Only Management Can Do It

Introduction

In many companies, it is often assumed that “business strategy” and “IT strategy” exist in parallel. On the surface, business strategy appears to set the direction for the business, while IT strategy supports it. However, the moment these two are placed side-by-side, a structural divide between business and IT is effectively cemented. This article examines the state where business and IT strategies become parallel and why it is problematic, framing it as an issue of strategic decision-making structure.

There Is Only One Strategy

Strategy is the act of deciding where to allocate limited resources, what to pursue, and what to abandon. From this definition, it is impossible for business strategy and IT strategy to exist independently and simultaneously. Decisions about which businesses to bet on, which capabilities to build in-house, and what pace to choose are deeply intertwined with IT. Therefore, IT should be an integral part of the strategy, not a separate, siloed strategy.

Parallelization is a Sign of “Decoupling”

Nevertheless, when companies start using the term “IT strategy,” it reveals a certain underlying assumption: the fact that they could not discuss IT within the context of business strategy. IT is not incorporated into business strategy discussions, business is not designed with IT as a premise, or conversations stall when technical topics arise. As a result, IT is separated from business strategy and is later organized as an “IT strategy.”

The Typical Process of IT Strategy Emergence

The process by which IT strategy becomes parallelized is remarkably similar across many companies.

• Business strategy is formulated.
• IT-related issues surface during execution.
• Existing decision-making processes become inadequate.
• Responsibility is delegated to the IT department.
• An “IT strategy” is created as a reactive measure.

At this point, IT is no longer a prerequisite for realizing the strategy but has become an object of cleanup.

The Dual Optimization Created by Parallelization

When business strategy and IT strategy become parallel, two separate optimizations occur within the organization. Business strategy prioritizes the market, revenue, and growth, while IT strategy prioritizes stability, efficiency, and risk avoidance. Both seem correct, but they are incompatible as strategies for the same company. The result is a fixed state where “the business moves fast, but IT can’t keep up” or “IT is defensive while the business runs wild,” leaving no entity responsible for overall optimization.

Why IT is Absent from Strategy Meetings

When business strategy and IT strategy are separated, the structure of strategy meetings also changes. Business strategy meetings proceed without IT, while IT strategy meetings focus on reactive measures. In this structure, IT is constantly relegated to the position of “how to support the decided strategy.” However, in today’s world where IT defines business structures, this premise itself is flawed.

Parallelization Leads to Diffusion of Responsibility

When strategy splits in two, responsibility also diffuses. In a structure where “business failures are blamed on IT” and “IT’s inability to keep up is blamed on the business,” failures are never truly owned by either side. As a result, strategies are not updated, and only failures accumulate.

Why Parallelization is Repeated

Once business and IT strategies become parallel, the pattern repeats. This is because the fundamental premises do not change: “Business cannot discuss IT in strategic terms,” “IT cannot step into business decision-making,” and “There is no entity to integrate the two.”

The Necessary Perspective Moving Forward

There is no need to forcibly “align” business and IT strategies. What is needed is to not separate them from the start. Specifically, this means including IT when considering business strategy, treating IT not as a cost or a tool but as a prerequisite, and owning strategy as a single, unified decision. The next article will examine how overseas companies differ and compare the structures where this parallelization did not occur.