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Sound Off - Why Is Business-IT Alignment So Difficult?

By Art Jahnke

June 01, 2004 — CIO — Ask any CIO to name the Holy Grail of the IT executive, and he is likely to say "alignment." In fact, last spring, our "State of the CIO 2003" survey found that CIOs cited aligning IT with business goals?along with prioritizing the demands of various business units?as their greatest challenge for the coming year. And we do mean challenge. Alignment, apparently, is a rare thing.

Just how rare it is became evident when CFO Publishing, publisher of CFO magazine, released results of a survey that looked at alignment from the other side of the great divide?the financial side. The survey, sponsored by Novell, asked CFOs to rate the alignment between IT and business goals in their companies. According to the survey, almost half of the CFOs say that alignment, like the Holy Grail, has yet to be found. The study found that 44 percent of CFOs described the alignment of business and IT as weak, and 4 percent said alignment of IT and business did not exist.

Why is alignment so hard to achieve? Who, or what, is to blame? What has to happen to achieve the perfect alignment of IT and business goals? Tell us what you think.

Sound Off is a weekly online column about current IT-related issues. Web Editorial Director Art Jahnke (ajahnke@cio.com) always welcomes feedback.


THE TROUBLE WITH MOST PLANS IS THAT THEY DO NOT indicate what the business value is, and what strategic or tactical business benefit the organization is planning to achieve. The simple matter is that your IT plan needs to have the business metric?not an IT metric of delivery of application.

The CIO needs to be on the hook to report the value, and guide the other business executives on achieving and reporting the contribution of the investment on the other executives’ goals. If the other executives can’t quantify the business benefits and strategic goals, you probably shouldn’t do the project?with the exception of infrastructural upgrades.

IT investments fit into three simple categories: 1. Keeping the lights on. 2. Providing incremental improvements toward business goals. 3. Radically changing business processes and their subsequent metrics through transformational investments.
Peter Courtway
CIO
Danbury Health Systems


THE PROBLEM EXISTS IN ONE OR ALL OF THREE AREAS.

First, many IT decisions are driven by business executives who know little about technology?except what they read in magazines or have been told by salespeople. This group includes CEOs, CFOs and COOs. They look to technology to drive the company. They believe that ERP, SCM, KM, data mining and a variety of software solutions will enhance revenue through efficiency gains or new customer sources. In some cases they do, but in most, the costs offset the gains. The company is structurally stronger, but on paper it looks the same or worse.

 

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