IT Value Is Dead. Long Live Business Value.

Business outcomes from technology investments are all that really matter. The CIO’s challenge is finding new ways to prove IT’s worth.

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The end of IT-business alignment is nigh. And no one is happier about it than the business-focused CIO.

“If you stand in front of an audience of CIOs and start talking about IT-business alignment, at best you get eye rolls, and at worst you get people walking out of the room,” says Shawn Banerji, a New York-based CIO recruiter with Russell Reynolds Associates. “Alignment has been a big trend for quite some time and—as with most trends—it has gotten a lot of lip service. But the ability to move beyond that into the practical manifestation of IT and the business being one is a progressive reality for a lot of organizations today.”

The strategies IT leaders have employed to more closely connect the technology organization to the larger enterprise—embedding IT staff within business units, understanding business processes, communicating with end users—have been all well and good. But alignment, it turns out, is not the ultimate end for corporate IT. In fact, says Dave Aron, vice president and fellow in Gartner’s CIO Research group, the language of IT-business alignment—encouraged and endorsed for more than a decade by industry analysts, consultants and, for a time, this magazine—is now dangerously counterproductive, setting IT apart from the enterprise even as technology itself becomes more inextricably entrenched in it.

CIOs must change the conversation. IT value is dead. Business outcomes are the real and only measure of IT worth.

“Today it’s less about, ‘I don’t understand your cost structure. I don’t understand what you’re delivering,’ and more about, ‘How can I leverage technology to deliver new products and services?’” says Dave Codack, vice president of employee technology and network services for TD Bank. “That’s forced us to look at the ways in which we measure technology. We’ve been inadequate in our ability to define technology value in concert with the values of the business. It’s difficult.”

But IT leaders who want to remain relevant—and employed—have no choice. “The next step on the journey is to move from alignment to engagement,” says Aron, “treating the rest of the business as partners, creating business value together.” According to Gartner, by 2015, the primary factor determining incentive compensation for the CIO will be the amount of new revenue generated from IT initiatives.

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