Best Practices for IT Business Alignment and a Quiz

CIO — You’ll save money when you align IT with business. And that starts with your reporting structure. Companies in which the CIO reports to the CEO show greater business alignment than those that have a different reporting structure. These companies lower their user costs by 17 percent compared with companies whose IT is not aligned with business, according to Hackett Best Practices.

Who Do You Report To? Alignment begins with the right relationship.

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Best Practices

Align the CIO-CEO reporting structure. There is a direct correlation between closer business and IT alignment and reporting structure. When the CIO reports to the CEO, the CIO has direct interaction and knows what the CEO’s objectives are. The CIO has clear direction on what the IT priorities need to be.

Align IT projects with business priorities. Link IT and business priorities to reduce waste and achieve higher IT project success rates.

Encourage your CEO to think long term. Companies that centralize or consolidate their IT operations had 24 percent lower operational support costs per end user. Additionally, the consistent use of IT standards lowered companies’ application development costs per user by 41 percent, according to Hackett Best Practices.

When IT Aligns with Business We All Save and Work Better

Aligned companies save on their IT costs at a rate of 17 percent as compared with nonaligned units, and they also finish the projects they start.

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Source: "The 2002 Book of Numbers?Information Technology," a Hackett Best Practices benchmarking study of 2,000 global companies

Check Your IT Alignment

1 The largest IT initiatives, in terms of budget and resources, can be directly linked to business goals and objectives.

mTrue mFALSE

2 Business managers drive major IT initiatives in conjunction with IT managers.

mTrue mFALSE

3 Your IT strategy and planning is directly linked to your company’s strategy and planning processes.

mTrue mFALSE

4 IT is generally managed as an investment rather than an expense.

mTrue mFALSE

5 IT is an equal agenda item in the company’s strategy and planning sessions.

mTrue mFALSE

If you answered true for every question, you’re aligned. For a complete alignment assessment, see the 25-question CIO Alignment Index online, codeveloped by CIO and Boston-based consultancy ICEX. Go to www.cio.com/printlinks.