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 (firstname.lastname@example.org) 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.
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.
Second, many companies are directed by IT organizations that are technology-driven but don’t understand the real needs of the business. They cannot translate business needs into technology solutions. Many IT executives cannot present a business case for or against a particular technology. Their condemnation or approval is based entirely on the performance of the technology. (Is it full of bugs or is it stable? Fast or slow? Easy to implement or hard? Can the vendor support it?) They present factors that should be considered during the technology evaluation stage but not at a strategic alignment level.
Third, those who run the business and those who run technology cannot agree on what alignment is. In reality, it is all perception based on expectations. There are companies that could be greatly enhanced through the use of technology but believe that they are perfectly aligned already. There are others that have the most beneficial technology available and don’t know it.
In most cases, the solution is a strong CIO who knows both business and technology. An individual who performs a cost-benefit analysis first but also intimately understands the requirements of the technology. Someone who also has the authority to say no when other business units attempt to implement technology without the guidance or assistance of the IT organization.
They are few and far between.
CEO (former CIO)
I AM ALWAYS STRUCK BY THE INTEREST IN ALIGNMENT that I read in articles and see in surveys. I contrast that with the lack of initiatives that I see in so many places. Oh, yes, there is interest. But little forward movement. What happens to alignment? Well, the road to alignment is like another road?paved with good intentions.
I could understand this much better if governance techniques and methods were unproven. Enough “snake oil” has been sold to unsuspecting organizations to solve their IT problems.
But portfolio management, balanced scorecard, business metrics? These are well established now, very much proven; and while not easy to implement, they can be done. So the problem is inaction, but one cannot lay the blame totally on IT. Those of us who work in this area know that IT can deliver only capabilities. Turning those capabilities into business benefits can be done only with the full participation and engagement of the business. Without that engagement, any attempt to “align” IT and the business will underachieve or simply fail.
The crime? Those who are concerned about this issue are right. Lack of alignment is a waste. Waste of money. Waste of effort from well-intentioned, hard-working employees. And wasted opportunity for the company and its shareholders.
Let’s stop “admiring the problem” and get on with the job!
True North Systems Consulting
I.T. IS SO BIG AND EXPENSIVE AND FEELS SO COMPLEX IN most corporations that IT has had to invent complex management frameworks to manage itself. These frameworks (such as ITIL for IT Service Management and Cobit for IT management audit) are seen by senior IT managers as the Holy Grail of business-IT alignment.
They are not bad in themselves, just in the fact that they are “IT management frameworks” and not “business management frameworks,” with IT in the middle and the business on the outside. As long as information technology runs with IT management frameworks and not with business management frameworks that are shared across the business (including IT), then there is poor chance of alignment and no chance of integration. The result is bad news for the business when it comes to agility and value for money.
So where are the business management frameworks that meet the needs of business and IT where IT is aligned with the business? Fair question to ask of the CFO and CEO?