Better Strategic Planning, Business Alignment and Governance Keys to CIO Success

Right now, CIOs are stuck between a rock and a hard place. On one side, there is growing demand for new IT capabilities and high expectations for payoff. On the other, there are greatly constrained resources. This will pose the single greatest threat to CIO effectiveness in the next year and a half, and there’s only one way out: better strategic planning and business alignment.

In a recent CIO.com poll, we asked visitors if they were experiencing an increase in IT requests from the business side. Of 405 respondents, 78 percent said the number of requests is increasing. And 32 percent said the quality of the requests is improving (better spec’ed out, higher-value projects).

If IT budgets were increasing by double digits, as was common in the late ’90s, that might not be a problem. When money flowed freely, as long as the IT organization was aligned with what the business needed and delivered it well, the CIO was considered successful.

That type of alignment is a recipe for disaster for CIOs today. When IT tries to please each and every business unit leader, each and every function head, and those people have competing priorities, there’s no way to win. With resources as limited as they are today, you wind up with a scene from Gladiator, with the CIO stuck in the middle of a very bloody battle.

I recently asked members of CIO’s Best Practice Exchange to describe the most effective thing they were doing to manage this problem. To a person, the answer was better strategic planning and alignment in the business, and better governance of IT.

The only way to be successful when the number of high-value business initiatives (IT enabled or otherwise) greatly exceeds the resources available to deliver them is to get all the business stakeholders to agree on what is most important, and then to agree on how things should be prioritized. That takes a cohesive executive group and some very sophisticated, well-running governance mechanisms.

The challenge in this for CIOs is that, in most companies, this isn’t happening, and the CIO who identifies the problem/solution ends up in a new high-profile role of leading the business to prioritize, define and communicate goals for the entire enterprise—not just for any one business unit or function, and not just for IT. Second only to the CEO, CIOs are uniquely positioned to view the business in this cross-functional, process-oriented, holistic way. Second to no one, they are uniquely positioned to think about and lead discussions on IT-enabled strategy and process change. Think this is a stretch? I’ve talked with two CIOs in the past month who are writing their companies’ five-year strategic plans.

Do you agree that this growing imbalance between demand and resources poses the greatest threat to your effectiveness? What about this new alignment? Drop me a line and let me know.