Gartner, one of the world’s most influential information technology research and consulting companies, makes its living dispensing advice on technology, strategy and business-IT alignment. So it is profoundly ironic that the company recently faced its own misalignment woes. During the late 1990s, the Stamford, Conn.-based consultancy suffered from a chronic lack of communication between its IT department and its far-flung business units. That disconnect cost the company millions of dollars every year, in the estimation of its own CIO and other observers.

These troubles were exacerbated by a no-holds-barred acquisition strategy that went awry in the dust of the dotcom bust last spring. Like some of its clients, Gartner saw its market valuation and share price drop, and it had to sell off and take a loss on some of what it swallowed during the boom-time feeding frenzy. The company is now applying its own advice internally and using the lessons it learned in restoring alignment between its own IT department and its business side to meet the recession-time challenges of restoring investor confidence and bolstering its bread-andbutter research revenue.

Here is the story of how Gartner dug itself into a hole and how it is digging out.

Digging the Hole: Who’s in Charge Here?

Gartner CIO Bart Stanco took the job in the spring of 1999 at the height of the dotcom boom. At that point, the IT department had no system to determine which projects would best support the company’s strategy. "There were multiple projects for the same function, projects at cross-purposes," Stanco says. "We found that we were working on too many of the wrong things."

For example, when Stanco took the reins, Gartner had two teams working on two projects, both intended to support pricing structures for research services. One group was developing a software tool to customize research and prices for individual clients’ needs. The other group was working on systems to streamline pricing by offering the entire array of research on a per-user basis.

Stanco worked with Gartner executives to pull the plug on the project to tailor individual offerings and adopt a new community-based pricing scheme. This method took the latter approach?providing a client with the complete menu of Gartner research services. However, those changes were made only after Gartner had wasted months working on both projects with approximately 50 staff members and consultants, Stanco says. With costs of around $1,500 per day for each outside IT consultant, that kind of effort easily added up to $1 million a month.