IT-Business Alignment: Are You Focused on Adding to the Bottom Line?

Are you a “core” person or are you a “context” one? That’s the question tech guru Geoffrey Moore posed to hundreds of attendees at a recent CIO executive programs event. Moore defines core as business processes that create new business opportunities. Context is everything else. In Moore’s view, CIOs spend way too much time on context and way too little time on core.

Core IT projects help grow revenues, satisfy customers, reduce costs, increase market share, or all of the above. They are the pillars of what Moore calls the “factory of creating shareholder value.” Core projects excite and motivate CIOs. Context projects?such as putting a new Web interface on a nonmission-critical business process?waste time, money and careers.

After listening to Moore, I traveled to a major vendor’s CIO summit where I presented the results of the latest CIO Magazine/Deutsche Banc Alex Brown monthly IT spending survey. During the past 15 months, the surveys have mapped a steady decline in planned IT expenditures. (For survey results, visit www.yardeni.com/polls.)

Before I took the podium, I decided to combine Moore’s comments about core versus context with my reasoning as to why corporations across the country reduced their IT expenditures in 2001. After I shared the drop-off in spending with the audience, I asked the CIOs in the room if they really thought CEOs were convinced their IT expenditures were indeed the “factory of creating shareholder value.” If they thought so, why then did CEOs cut their budgets so dramatically in the past year?

The room went silent. I could see in the eyes of the attendees that they were spending too much time on context projects.

Many of you are now in the final stages of your 2002 budget approvals. Don’t forget that the more you are able to frame those wanted investments as core projects, the more dollars you will get in 2002. It’s as simple as that.