Leadership

Defining the ideal IT organization

Aligning IT with the business tops the list of goals for most CIOs. Here are the top IT issues and challenges facing CIOs in achieving that goal.

By Harris Kern

The experience I’ve gleaned from workshops, assessments, and consulting activities with hundreds of major IT organizations bears out one fact: IT is still considered a cost center by its business counterparts in 70 percent of the Global 2000 companies. IT executives need to change this perception. CIOs must address infrastructure issues and market the IT organization to raise the enterprise’s recognition of IT as a business partner.

I’ve compiled this list of the top issues facing CIOs that must be resolved before IT can be leveraged for business value and growth. It’s no surprise to me and probably will be no surprise to you that almost half of the issues are directed toward the infrastructure. No wonder IT is still considered a cost center.
  • How do CIOs lead, educate, and partner with CEOs and the executive management team?
  • How can IT ask the right questions and jointly specify project requirements?
  • How do IT executives market and enhance their value to the enterprise?
  • How does IT prevent business units from throwing project requirements over the transom (often as solutions masquerading as requirements)?
  • How does IT stop purchasing technology for technology’s sake and align itself with business objectives?
  • How can IT stop mistrust and develop credibility?
  • How can IT change the mindset that IT is for IT’s sake into a customer-centric culture?
  • How does IT jointly develop business cases used to determine priority?
  • How does IT continue to do a good job of following orders and begin to change the culture to one that also has creative solutions?
  • How can IT get its business partners to communicate IT’s value to the enterprise?
  • Traditional IT strategic planning is a yearly, typically static, and discrete process. It takes considerable time (often four to six months) to produce a large, static document that details projects and timetables from a technology vs. business viewpoint. How does IT change this process into one that is more tightly integrated with the business?
  • How can IT do a better job of aligning with the business?
  • How can IT nurture the staff to achieve exceptional productivity and job satisfaction?
  • How can IT do a better job of thinking strategically and being more proactive instead of being in a reactive mode in its production environment?
  • What are the minimum processes required to build the ideal IT organization?
  • How can IT maintain centralized control for standards, processes, and architectures?
  • How can IT improve communication, such as between applications development and infrastructure support?
  • When systems are being slam-dunked into production, how can IT ensure a smooth transition from development to production?
  • How can IT become more cost-efficient?
  • How does IT design an infrastructure that’s a competitive advantage? What are the top issues/obstacles to overcome when building the proper infrastructure?
  • How does IT stop working in silos and start becoming a team with synergy?
  • How can IT change the perception that centralized IT is bureaucratic to a perception that it is adaptable?
  • How can IT change from related communication (isolated) to develop key relationships?
  • How does IT gain direct management of its own vendors, and not continue to have other customers of IT services manage its vendors?
  • How can IT build for efficiency and effectiveness and architect for growth and business alignment?

Pursuing the ideal IT environment
What is the definition of the ideal IT environment? These are a few of the characteristics:
  • A culture where honesty, mutual respect, and job satisfaction flourish
  • Executive managers educated and committed to the enterprise
  • Business goals and objectives completely aligned for success
  • Strategic decisions that accommodate a rapidly changing dynamic business environment
  • Cost-effectiveness
  • Common architecture (tools, standards, etc.)
  • Nurturing individuals instead of drowning individuals in a bureaucratic environment

To build a world-class IT organization, your organization has to be designed to exceed the enterprise’s strategic goals while still nurturing individuals to achieve exceptional productivity and job satisfaction. This provides the enterprise with a vision that is meaningful to every individual. The more meaningful it becomes to the people involved, the harder they’ll work to bring about success.

According to the CIO desk referenceMeta Group  2001 (subscription required), most IT organizations “have a cost center, ‘just-keep-the-lights-on’, service-utility mentality that maintains IT should be mostly transparent to the rest of the business. If things are going well, no one knows the IT organization is there. If things are going badly, it gets noticed.”

Organizations in which IT is viewed as extremely critical to the business, according to the CIO desk reference, are those in which the CIO has realized that marketing the IT organization furthers the awareness of the value that IT adds to the business and helps ensure the CIO is a business partner.

The best way to achieve this partnership is by organizing IT to respond to the needs of individual business groups. This can only be done by establishing working relationships at individual and group levels with all business partners in which business teams, including IT as a “business,” can work together. Enterprise infrastructure is the only IT project. Whether responsible for 10 percent or 90 percent of the tasks, IT is a member of a business team led by a business project champion. All projects require business unit champions and business project champions.

What makes a successful partnership
Remember that relationships, while strongly encouraged on an individual level, need to be understood on a group level. For example, if a particularly difficult partner has been unable to form a relationship with the technology staff, the technology department must recognize this and take steps to forge the right relationships. This requires senior technology managers to identify the sources of the relationship problem and actively work to correct them. Successful partnerships are based on:
  • Relationships that are continuously nurtured.
  • Relationships that are institutionalized.
  • Relationships that grow beyond individuals to departments.
  • Relationships that are viewed as value-add.
  • A partner’s perspective that is anticipated at all times.
  • A partner that can answer a question before it is asked.

Success is based on:
  • Managing technology as a strategic asset rather than managing technology as a cost center by:
    --Managing risks
    --Managing expectations
    --Business alignment
    --Vision
    --Planning strategy vs. tactics
  • Partnering with the business and becoming part of the business rather than staying apart from the business by:
    --Building relationships
    --Creating business teams
    --Presenting business cases
    --Acknowledging business unit champions
    --Building a track record
  • Building a culture based on shared values such as:
    --Guiding principles
    --Common culture
    --Quality of life
  • Recognizing and communicating value to the enterprise by:
    --Expressing IT’s value to the enterprise
    --Recognizing value
    --Measuring value
    --Communicating value

IT organizations need to sell to their business colleagues the idea that IT can and should be leveraged for business value and growth. Dedication requires an educated understanding. It’s the CIO’s responsibility to demonstrate the relationship between understanding strategic technology initiatives and the long-term success of the firm.

The Harris Kern Enterprise Computing Institute is a consortium of publications—books, reference guides, tools, articles—developed through a unique conglomerate of leading industry experts responsible for the design and implementation of world-class IT organizations. For more information on the Harris Kern Enterprise Computing Institute, visit http://www.harriskern.com/.

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