Leadership

Sanity check: If you're working on IT-business alignment, you've already lost

It's one of the most popular buzz phrases in the tech world right now -- IT/business alignment -- but the concept itself is completely flawed. Find out why and what you should be doing to transform your IT strategy instead.

Last October, at a conference for IT managers and executives, I was chatting with George Spalding -- an ITIL expert from Pink Elephant -- about the popular concept of IT/business alignment. The fact that so many people in the IT field even talk about the need to align IT and business is evidence that IT is not very well aligned in far too many businesses. At least that was the conclusion that George and I came to.

"Do you ever hear companies talking about marketing/business alignment or HR/business alignment?" George asked.

"The glass wall between IT and the rest of a company has to be shattered."

Of course we don't. If there was a rift inside the company with the marketing department or the HR department, it would mean that there was a fundamental problem, and any good company would seek to root out the issue and fix it as quickly as possible. However, with IT departments, this type of schism has been tolerated for far too long in far too many companies.

The result is that many CEOs simply look at IT as a utility cost that needs to be controlled rather than an innovation driver for growth and expansion. The ones who do that are obviously missing a huge opportunity, and they are also driving many U.S. companies to outsource their IT departments and in some cases to send nearly the entire IT operation to overseas contractors.

For some leaders, the answer to this problem is better IT/business alignment. However, "alignment" still implies separation and that, ultimately, will not solve the problem. What's actually needed instead is a thorough integration of IT into the core business.

I've found some support for this idea in recent reports from the MIT Sloan School of Management and The Wall Street Journal. This week, I'm going to cover The Wall Street Journal's take on this issue. Next week, I'll evaluate an article on this topic from the MIT Sloan Management Review.

A diagnosis and prescription

The Wall Street Journal published the article How to Tap IT's Hidden Potential on March 10, with the summary, "Too often, there's a wall between a company's information-technology department and everything else. That wall has to go."

The general thrust of the article can be summed up by this line: "Success in the digital economy of the 21st century demands a strategic role for IT. And for that to happen, the glass wall between IT and the rest of a company has to be shattered."

The article put forth five factors that are keeping many IT departments disconnected from the business:

  1. Mind-set differences between management staff and IT staff
  2. Language differences
  3. Social influences
  4. Flaws in IT governance (defined as the specification and control of IT decision rights)
  5. The difficulty of managing rapidly changing technology.

Then the Journal put together a set of six recommendations for overcoming this rift:

  1. Begin with IT literacy -- and commitment -- at the top
  2. Hire an IT leader who sees the big picture
  3. Create demand for IT solutions
  4. Make sure nothing gets lost in translation
  5. Rationalize IT spending
  6. Create an IT portfolio by evaluating risks and returns

And here is a quick collection of some of the more poignant quotes from the article:

  • "Unfortunately, the chief information officer often reinforces this separation. That's because he or she usually is an IT professional chosen to be a director of technology, rather than an executive who is expected to fully integrate IT into the company."
  • "Another divisive factor is the persistent perception of those who are oriented toward science and technology as 'nerds.' The recent boom in IT outsourcing has worsened this estrangement. Now, IT professionals are almost pitied as dinosaurs whose jobs will soon be sent offshore."
  • "Analysts estimate that hundreds of billions of dollars are blown every year on IT projects that fail to achieve the desired goals."
  • "Many CEOs find the financial and business returns on their IT investments obscure and difficult to quantify, and feel that no matter how much money they spend on IT, there is always pressure for more applications, the latest hardware and software, more people and faster networks. So they focus more on containing the costs of IT than on tapping its potential."

Sanity check

I have not always been impressed with the Journal's coverage of IT issues. As you may remember, last year I blasted the Journal for its article that showed business users how to circumvent IT. At the time, I argued that users should always try to first go through the proper IT channels when they want to implement a new technology. I also noted that IT needed to do a better job of partnering with users to find new solutions that could drive the business forward.

These same issues are also part of this larger discussion of the role of IT in the business. Only this time, the Journal has gotten it right. Part of the reason is that the Journal didn't rely on internal writers for this piece but relied on a couple professionals who are much closer to the action in IT (for the record, that's the approach TechRepublic has always taken for the vast majority of its articles). In this case, the Journal used Dr. Amit Basu, a professor of information systems, and Chip Jarnagin, founder of a management-consulting firm.

My only complaint with the article is that I think you can break down the solution to this problem in three basic steps:

  1. Hire a CIO who has business savvy but can also gain the respect of the techies in the IT department
  2. Improve IT awareness/training among executives and team leaders throughout the business
  3. Improve business awareness/training among the company's IT managers

All of the other activities -- better explaining IT spending, getting other leaders to think of technology as a business enabler, translating between IT and the rest of the staff -- can all fall somewhere under one of these three. As you can see, this is not about IT/business alignment. It's about IT/business integration.

How well has your company integrated IT into the business? What do you think about starting with these three steps? Join the discussion.

Remember to check back next week when I'll revisit this issue by delving into a separate article on the subject of IT/business alignment from the MIT Sloan Management Review.

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

88 comments
GaryChernipeski
GaryChernipeski

Oh my topic. In my experience IT does have a utility aspect to it. In fact. Also, IT has a massive potential to reduce costs in all areas of a business, and in fact enables new business products that would not even be possible otherwise. Eventually my paper will be available "The Rise of Stupid IT". Here is the summary; * IT infrustructure; has fixed budgets, and reports to an executive responsible for infrustructure * IT services; reports to CIO formally and the business leaders for which they provide specific services on a day to day business functionally. This group shrinks or grows on demand for internal facing services such as application development and support. And most importantly is accounted for ENTIRELY against the business units that employ them. I came at this from the angle were I have seen extremely bright technologists -- hackers even -- losing their former safe havens in rooms full of parts and cables and computers with exposed internals who general dislike meetings, formal projects, and interacting with "the masses". The usual mistake is giving these folks too much power over business applications and too little power over their own activities. On the other hand there are the many new graduates of formal eduction, and the need for organised IT services that business units rely on. The mistake here is leaning too heavily on this group for essential IT functions and managing this group with the same management from the first group. These two groups have a different mind-set, are different types of asset to the company, and should be paid, incentivised, and be managed differently. The first group should be incentivised to use innovation to keep costs relatively free of time lines. The second group should be incentivised to match their output to business time-lines -- entirely. If I can be entirely casual, one group wears dirty t-shirts and jeans, and the other button-up shirts and slacks. One group is rarely seen other than maybe to meet with someone from their counterpart group. The other group meets, works, and functions right along side and with the business units that they serve. ITI - IT Infrustructure ITS - IT Services To resolve which servers and services belong to which group is simple. ITI serves ITS. ITS serves individual business units. ITI is essential services that are required no matter the current business environment. ITS grows and shrinks with demand. If ITS needs a special server or some other service ITI doesn't provide, they must buy and deploy it themselves using budgets from the business unit that benefits from the investment. If a particular service becomes ubiqitous over time -- widely used throughout a company -- it is eventually turned over to ITI for adding to the on-going infrustructure, and most likely some personnel move with it. For example: telephone. The longer ITI can serve the business using existing processes and equipement, the larger the potential savings. Thus, the incentive to "keep it running" and all the skills hacking and otherwise that go into that are the domain of an ITI employee. This is the long play. ITS provided business value on much shorter time-lines. These go well with formal project management and appropriately respond to management pressure from the business units served. Comments welcome. Be sure to say which group you currently belong to and which group you would rather belong to!

aaron
aaron

Companies have an architecture, but usually not the right architecture. Inside every company is a core set of systems and processes that executes the thousands of daily transactions that keep a firm in business taking orders, purchasing supplies, delivering products, and paying employees, for example. The way these systems and processes are structured the company's enterprise architecture can help or hinder its efforts to execute its strategy. To get the right architecture, companies should focus on enterprise architecture, not IT architecture. The key to success is to focus on the higher level enterprise architecture the organizing logic for core business processes and IT infrastructure. Top performing companies design their enterprise architecture, use it to guide the evolution of their systems and processes, and leverage this capability for profitable growth. Top performing companies define how they will do business (an operating model), and design the architecture of the processes and systems critical to their current and future operations. They use this architecture to guide the evolution of their core foundation of systems and processes. Then these smart companies exploit their foundation, embedding new initiatives to make it stronger, and using the foundation as a competitive weapon to seize new business opportunities. Using the architecture to build a stable foundation gives a company greater agility, faster time to market, lower risk, and lower costs. In a business world that is changing faster than ever before, the top performing firms have a stable core they digitize their core processes and embed them in a stable foundation. This foundation makes these companies both more efficient and more agile than their competitors. With global supply chains, pressure for ever faster time to market, more complex regulation, and huge shifts in customer demographics and desires, companies cannot predict the future. But they can decide what makes them great. And then they can create a low cost, high quality core of stability and constancy in a turbulent world. With a strong digitized core great companies slide smoothly into the next opportunity while their competitors stumble. http://www.architectureasstrategy.com/book/eas/index.cfm

jluftman
jluftman

STOP PLAYING SEMANTICS. Whether it is alignment or convergence or integration or fusion or harmony or linked...the problem persists; and will persist longer if we continue to "argue" about what we call it and not focus on the pervaisive problem and approaches to address it. There is still a strong need to have IT and business organizations working more effectively/efficiently together, just as there is a need to have all organizations working well together. One major difference with IT (as opposed to other organizations) is that the amount of money spent is significantly larger, and it is not always apparent what the contribution has been. Additionally, the value of IT is but one factor that must be addressed if mature alignment will be attained. Other areas such as effective communications, governance (strategic, tactical & operational), partnership, technology scope, and HR/skills ALL must be addressed.

reisen55
reisen55

American Management does not give a damn about IT alignment. They do not care, not a one. Every company is convinced that gutting IT (it is an expense) for cheaper, faster, better in Bangalore at 1/5 salary is THE WAY TO GO. PERIOD. Increases Shareholder Value, makes management look good by creating IMPRESSION they are cutting expenses. IT ALIGNMENT does not exist anymore. Period. That is why Americans are leaving the IT field as a career choice. Why get a degree when CSC or ACS or ACN is going to come in and fire you after one year. ACS Chairman Lynn Blodgett has said that no matter how smart an American may be, the savings are just too great to ignore. HOW can you have alignment under such conditions???????????? IT techs - unite, let's have a coast to coast job action and TURN THE SERVERS OFF FOR 24 HOURS......

drnz_54
drnz_54

Yes, you need IT to be elevated to the stategic level...yes you need leadership in IT that understands business...yes awareness needs to be propogated from the top down...but the best thing IT can do is to implement technology to enable them to measure their own performance in support and service delivery and tie their efficiencies to revenue. For example: automating and measuring a new hire process might show the on boarding time of new sales professionals to be shortened from 2 weeks to 1 day...that puts the sales guy/gal in the saddle producing income for the company 9 days sooner than current performance...if he/she produces an average of $15000 per day in sales then the company has just recaptured $135K in revenue for the company...successes like THAT will get the CEO's attention...its all about the money.

john_37
john_37

These ideas are at least 15 years old.

I'd rather be drumming...
I'd rather be drumming...

Nice concepts but not very realistic in our organization. (a) the CIO is already in place, been with the company for 20 years in other roles, knows a bit about the business and almost nothing about technology. Measures everything in terms of 'value add' and approves projects based on 'fantabulous' ROI numbers that are rarely base-lined and never measured after implementation. (b) IT awareness among executives? Right, they are aware that they spend a lot of money and get very little value in return after waiting for an interminable amount of time. Opportunity - LOST. Most don't like computers, or even have one in their office. That's why they have admins. The handful of exec's that actually get their hands dirty love the system, and get a lot of attention from IT! (c) Who has time for training? I should note that we do have enterprise architects and development engineers working hard to define the future direction and a roadmap to get there from here. In spite of the half-hearted commitment from our top execs, we will continue to achieve heroic results!

mike.wolff
mike.wolff

Anyone who's been around for the great Y2K scam has seen billions of corporate IT "investements" squandered should understand why there is such a divide now. Business leaders have been severely burnt by trusting the techie prophets and their expertise in global meltdowns and the new economy.

No User
No User

But once again IT gets blamed for the failure of business. Jason you had my hopes up when I started reading this article but you showed your true colors and slapped IT in the face yet again. Perhaps one day you shall actually "get it" I certainly hope so. I can't speak for anyone else however I can speak volumes on my experience. I have always looked at IT as being beyond the computer room. The problem is that when you suggest new ideas and innovative procedures and solutions you are quickly shot down and told to focus on IT and well just shut up and go back into the computer room if we need you will call you and you just come a running, that is how it works kid. The bottom line is the rest of the business doesn't want you out of the computer room unless you go into serf mode and serve them by fixing their problems most of which are caused by them. I have been saying for quite some time that IT belongs in the board room and at the big table in a power position. I see IT eventually getting there by sheer necessity forcing the hand of business. It's forbidden for me to hack a program and rewrite the code so that is does something that is desired and because I wont that makes me a law abiding professional not an incompetent idiot and a failure that has no value. I can analyze your situation and help you find your actual needs and then find a solution which would give a good example of both my intuitiveness (value) and in general a greater example of the true value that IT brings to business. That would be just the beginning. My mind races with both the potential and the challenge. The problem is getting the pointy headed business types to understand that or at least just remove the wall and stay out of the way and let it happen. Just stop and ponder this for a while. Every aspect of business uses IT in some way and often in a very big way. So why would business hog tie and hand cuff the greatest asset business has which would be IT getting into every aspect where IT is being used and or can be used? That would require all the folks to co-operate with IT and provide a great deal of information along the lines of what they do and how they do it and how they would like to be able to do it in other words they would have to partner with IT and in doing so empower IT to change the way they do their very jobs and business it's self. Naaaa just go back in your closet you IT punk, will decide what we want and tell you to go fetch boy. If you do a good job will pat you on the head and toss you a biscuit. If you don't do that then we will out source your job. Is it then any wonder why the typical response from IT is PHUQ YOU very much!!!! Perhaps it is their arrogance along with their clouded predetermined little minds that prevents them from understanding why we keep saying to them PHUQ YOU very much and not that we get bent out of shape if we are asked to stop spanking our Monkeys while we play with our toys in the computer room and of course often ask for new toys. The true value of IT remains untapped. I do believe that the pointy headed business types will one day open their eyes (even if it's thrust upon them) and see that. What a glorious day that shall be. One last note. How many folks in the top IT positions are business people and distinctly not IT professionals? The practice of having a non IT person over the IT department is quite common. The companies that do that generally insist that they need someone who understands business to steer IT. Which makes your point moot that IT doesn't meet business needs since IT is not being directed by IT. That also explains why from your perspective that IT is not stepping up to the plate with practical IT solutions that deliver. The reason usually is do to a non IT person at the helm of IT causing the problems and instead of placing the blame where it belongs on the folks that put a non IT person at the helm of IT and that person at the helm you blame IT. Nice job Jason (and your PINK buddy) a little disconnected with reality but nice hatchet job on IT. This also gives credence to my perspective that IT is being held at bay instead of being brought into the fold and taking a chair at the big table. They just wont give up the reigns of power and let IT step up to the plate and take charge.

rsculthorpe
rsculthorpe

This is exactly why Enterprise Architecture is growing as a discipline.

altadel
altadel

Your comment about marketing or HR is a bad misstep. Other than Google, I've yet to see a decent HR department that was aligned with the business. HR is nearly always a petty fiefdom unto themselves, generating rules for position evaluation required by neither the business trying to hire the right people for the position or legislation.

RknRlKid
RknRlKid

From the original article: "Technology changes rapidly and is subject to fads, which can be confusing even to IT professionals." and "...no matter how much money they spend on IT, there is always pressure for more applications, the latest hardware and software, more people and faster networks. So they focus more on containing the costs of IT than on tapping its potential.??? and ???Analysts estimate that hundreds of billions of dollars are blown every year on IT projects that fail to achieve the desired goals.??? The real problem to me is one that is only seen when looking at the broader picture. And to be honest, its the IT industry's own fault. The constant change in hardware and software is the biggest flaw in this whole thing. Software makers expect you to "upgrade" every two to three years, or, like Microsoft keeps doing, to completely replace everything (hardware and software, to include applications) every two to three years. I have an article in my files where a MS salesperson told some executives they expected upgrades every 18 months. From a business perspective, this is insane. Unless this upgrade/replace cycle is constrained, IT is a money pit to a corporation. While upgrades and replacements are a good idea for the software and hardware manufacturer, it is craziness to someone running a business. After adding retraining costs to the expense of new systems and software, no wonder IT is seen in a negative light. The "geek" factor is here too. Its like the thread about wireless taking over from wired networks. Wireless is just another fad. There is no reason for a company to change everything over to wireless if the wired network meets the business needs. But I guarantee that there are companies out there going wireless because it's IT department is insisting its the "latest thing," and the IT department will end up with egg on its face because the stuff just doesn't work as promised. The Windows 98, wireless, portable devices and some other threads when combined give a more accurate picture. IT is expensive. Instead of what is "new" or "latest technology," the IT leaders should be focusing on what works for the organization. Loyalty must be to the organization, not to the technology. IT policies should be explained as what's best for the corporation, and what makes it corporation more profitable. I think that alone would do a lot toward breaking down the "glass wall," and removing many of the misunderstandings.

Canuckster
Canuckster

who is disturbed by the CIO-is-a-techie-and-therefore-incompetent-as-an-executive attitude? I mean, do the bluesuits who drink their vanilla toffee frappacino on the way to the gym type of MBA's the only source for corporate leadership? Lets see, Bill Gates and Steve Jobs...not even the bluesuit, nevermind the Harvard MBA status with either. Guess they must be, by definition, problems and not solutions in their corporate organization. That doesn't sound right to me. I think the solution proposed needs to be tweeked a bit so that it isn't another piece of tripe looking for a cut of the profits type of consulting. Just my 2 cents worth of venting.

reisen55
reisen55

Business does not want to align with IT. All management sees of IT these days is that it is an expense item, possibly a profit center (entirely wrong) and after all the servers stay up all of the time and all those IT guys do is play games and browse the internet. So, OUTSOURCE THE LOT TO BANGALORE for cheaper, faster, better at 1/5 the salary without any health care benefits and BOY HAVE WE CUT COSTS..... No business alignment at all with Outsourcing deals. It is a game of Service Level Agreements with third rate staff and invoices to the client. Alignment is out of the door if it was ever there in the first place. 18 months later: the project has gone to hell but the client has the outsourcing company and it's policies totally bound into their structure that they cannot fire them and if they do - meet the lawyers. I'd like to see more alignment, but American Management is hell bent on third world results, which is why we are going there.

htmapes
htmapes

The largest challenge for IT within most organizations is its people. Go into most IT shops and you'll meet, for the most part, poorly-dressed, quasi-professional people who are intrigued with machines and communicate poorly. They are perceived within the organization as people who keep the lights blinking and consume lots of capital to do something that's mostly invisible. Here is how you get beyond that. Accept outsourcing, but on your own terms. Outsource the mundane systems and activities -- email, data center, basic server management, etc. The people up at two in the morning changing backup tapes and swapping disk drives are of no consequence to your organization; they contribute nothing unique or high-value to your business. And if you're depending on these types of activities to build your career, it's already dead and you don't know it yet. If you don't outsource at the bottom of the stack, the CxO will force outsourcing at the top. So all of the good projects, all of the visibility, and all of the career opportunities will go to the consultants or to the outsourcing firm. Both you and the business will lose in this scenario. Perception is reality. If the IT org's mission is perceived as "keep the lights blinking," then it will only be treated as a cost center. By getting rid of the mundane and turning it into a monthly service cost, the IT staff is seen as contributing to higher-value processes. And, as a byproduct, the types of people hired for these roles will be more professional, better communicators, easier to manage and retain, and invited into the executive suite.

bus66vw
bus66vw

How do they do this? Just need to see if anybody has a clue.

jagadish.rao
jagadish.rao

Business Alignment or Integration - The intent is the same or say that it goes hand in hand. Using IT as an Innovation enabler is always the goal of Business & IT Strategy, dovetailing or call it integration. Business Alignment is needed for business applications and/or data support so as to understand the impact and deliver services when needed, where needed. For example, the support needs of Online Banking and Retail Banking are different.

mail.dave
mail.dave

Probably the most troubling aspect of all of this, is that IT is constantly battered about in an impossible quest that it (IT) be all things to all people, all of the time. If there is a wall between IT and the rest of the company, I often see that the wall has often been built up by the rest of the company as well - often deliberately. And those outside IT categorically "don't want to know" - they want magic, not understanding. Including (for example) when they expect cutting-edge technological abilities out of 3- 5 year old hardware. Ask yourself why it's considered appropriate to saddle IT with addressing the inadequate (technological) literacy of other departments ? Is marketing expected to educate accounting ?

ido
ido

as an IT Manager/IT Pro I'm telling you that the buisness allways not treating IT as a part of the machemizm for success I work now in a company that does know that as an IT manager I can contribute to the effort .. and its great. thanks

bopapem
bopapem

1 of the recommendations is to "Create an IT portfolio by evaluating risks and returns" - who sits in this "portfolio office" to evaluate risks and returns? Is it IT ensuring that the investments are aligned with business or Business ?

pattischreiner
pattischreiner

George Santayana said "Those who cannot remember the past are condemned to repeat it." These may be old ideas but it is obvious from all of the responses that no one was listening. Many businesses haven't figured out that EVERYONE needs to be aligned (in sync, onboard, whatever you want to call it) to the mission of the company...HR, Finance, and IT, AND understand how their job supports that mission. It takes a leader who understands that success is driven by communication and that communication is two-way. IT needs to listen, ask questions, understand, and then communicate how they can best support the mission. Same goes for the CEO.

No User
No User

I'm happy to find that I'm not the only one who isn't blind.

Locrian_Lyric
Locrian_Lyric

Especially with the financial programs. Oh, and 9/9/99 caused havoc too, btw.

nick
nick

Good comments RknRlKid. What I see now is that a number of firms, and government departments, set a hardware and software SOE and don't change it for 3-4 years. Often you can skip a whole generation of MS upgrades. It also makes it cheaper from a licencing cost.

CG IT
CG IT

IT Administrators are also to blame. The "Geek" factor as you put it, places them in the position of "wanting" the latest and greatest without regard to whether there is a need for it. God forbid they don't learn the latest and greatest and fall behind the competition of who is at the cutting edge of technology. So to learn, they have to acquire the software and hardware thus trying to budget these items. I personally think IT departments, especially CIOs should have business plan just like the business which spans 5 years, and even 10 years. If all large businesses move to a 5 year and 10 year plan in IT, it would force mfgs [hardware and software] to change their strategy and development plans to work within ITs 5 and 10 year plans. It would relieve the burden of II departments continual request for capital expenditures every 2 or 3 years thus appearing to be a $$ pit. The other mentality that has to change it the "latest and greatest" belief. In gaming, which most IT people do, having the latest and greatest equates to winning at gaming. This "winning" with the latest and greatest is brought to the business environment.

mthompson
mthompson

You're right on track. I think the problem has less to do with computers than how information itself is used and managed. If the focus from IT and the rest of business was on information and how people use it, rather than the next "toy to play with", IT's role would prove more successful, making it an integral part of business instead of something seemingly added on to operations. In today's information society, where information is often touted as one of the "most important assets", it is often not treated as such. How the two other often-mentioned big assets, people and money, are managed is usually much better understood. Information is left to ad-hoc processes resulting wasted time searching for existing information and duplication when it's not found. After reading Davenport and Prusak's Information Ecology, I'm surprised why more of the ecological views of information have not been taken into the mainstream. I think it's partly because we'd rather stay with the status quo instead of taken a long, hard look at the messy bits between people and information. Along the same lines, we often implement technology for technology's sake in the belief that it's inevitable, rather than question why we're doing it and for whom. Alan Cooper's the Inmates Are Running the Asylum calls out a lot of the ills we've brought upon ourselves. I think more and more, we're learning that "blinking lights" are not enough, but it's happening slowly.

mafos100
mafos100

RknRlKid- I agree with a lot of what you said relating to the constant change in hardware and software. Although I do see a flaw in the geek factor comment. There are a lot of times the IT department is not ready to support or implement the latest fad, but are forced to because of someone in the business buying the latest fad for personal use and then wants it implemented into the organization, without really understanding what is involved or how useful it would really be to everyone in the organization.

Imprecator
Imprecator

Upper Management doesn't give a hoot about IT (and frankly it's probably better this way). in the last company I worked for the CIO WAS in the board but had the same status as the doorman AND was twice as spineless. Middle Management were composed of people who thought that the more complex the requirement the better the results. IT Architects designed un-wieldly complex solutions, usually with arcanely expensive products to comply with the complex wish list set out by the Middle Managers, seldom bothering to check how feasible was the implementation or how scalable was the solution. And capacity planning was unheard of, sometimes the solutions were designed and nobody even bothered to inform the infrastructure people of the requirements till the last minute. Projects were set up with the ending date written in stone by upper management. The same people who were responsible for the day-to-day operation of applications AND Infrastructure also were full time resources in projects. Infrastructure OPEX was cut regularly and as a consequence became rigid and unresponsive. I remember waiting for 3 years for a couple of servers, because the CRM system kept hogging them all. Change Control usually had close to 20-50 changes to execute a week, 99% of them dealing with applications, there was no slots for server maintenance or security patches. I had to fight for months to get approval on a change control request to update the software in the corporate firewall and in the end it was granted because it started to crash and the supplier refused to give support on a version of the software that was already been discontinued 2 years before. Of course the spectre of outsourcing reared its head every six months or so. And despite that IT was the most despised department of the company (except for HR :) ) That is in my opinion how a 'Business Aligned IT department' behaves. And after that experience I think that owning a liquor store in the middle of a criminal infested red-light district is a more relaxed and safe occupation, than working on an IT department that is 'Aligned' with Business

four-eyes_z
four-eyes_z

Good article. :) It appears though that this article is more applicable to businesses that can afford to have an "I.T. department" (tech support / helpdesk, applications development, data-processing, etc.) as opposed to a "Tech-support staff" (just PC/network/software support). The former having a formal command heirarchy while the latter having a few I.T. staff reporting to a (usually) non I.T. department head. Anyway, just to share my experience regading "integrating" I.T. into the business, regardless of the size of the I.T. group, the I.T. leader (CIO, IT Manager, etc.) ultimately has the responsibility of effectively "selling" his teams' services and convincing the heads of other departments that it is in their best interest that they work together to achieve common goals (improve productivity, increase profits). If the I.T. leader cannot effectively communicate with non-I.T. leaders, then things will likely go the way of "lets cut spending on I.T. to increase profits". The I.T. leader cannot afford to simply sit back and react to problems as they arise, he has to be pro-active in proposing things that will help the business avoid the problems in the first place. This is definitely no easy task! You not only have to be tech-savvy, you also have to be people-savvy as well. You have to build good working relationships with the deparment heads / decision-makers (office politics cannot be avoided no matter how hard you try) so it is a MUST that you have to be a very good communicator otherwise you run the risk of being treated as a business overhead that can be either reduced, eliminated or outsourced. The success or failure of this so-called I.T. "integration" rests with the I.T. Leadership.

Kevj
Kevj

Finding IT professionals with an understanding of business is the most difficult part which seems to be the area where many companies struggle. At a meeting of senior level IT folks held by my former employer (association of manufacturing companies),one of the presentations described the problem of finding IT professionals with business acumen, and asked recommendations on how to overcome this obstacle. A discussion ensued, but no good recommendations were offered. The cause of this issue may be that many in IT do not want management responsibility, and most in management do not have any knowledge of IT. I suspect the best way to overcome this problem is for companies to train IT employees in management, and increase salary accordingly as the employee progresses. Most companies look for needed skill outside the organization when it is easier and cheaper to find it within.

dryflies
dryflies

The problem with many in the development side of IT is that they are too busy thinking about patterns and scaling to listen to the needs of the customer. Your customer is your job, without then you don't have one. I have been on both sides of the equation and I find it is far easier to listen to your customer, mirror what they say back to them and repeat until you are both in tune than it is to nod your head and go back to your desk and give them the wrong solution. My G'pa said it best. if you do not have the time to figure out how to do it the right way, how are you going to find the time to do it over. That is "aligning with business" pure and simple. make the software/hardware act like what they had before the tried to automate the process and then slowly but surely remove the manual processes. but hwatever you do, do not change the appearance of the end product unless the customer suggests the change.

Steve Romero
Steve Romero

I responded to the Wall Street Journal (WSJ) article and was glad to see you continue the conversation in your blog. I was surprised to see the WSJ treating the "wall between IT and the rest of the business" as news. I was also surprised to see them characterize the potential of IT as "hidden." The wall has been there for years, if not forever, and you have to be blind if IT's potential is hidden from you. (Sorry, but my patience is at its end for business leaders who don't understand the strategic value of information technology.) Setting my surprise aside, I believe both of these issues are due to the lack of alignment between IT and the business. (If you're aligned, then you're integrated and you can't integrate IT with the business if you are not aligned. We could probably go round and round on this semantic discussion so I will leave it at that. Let's just say we are in violent agreement.) I agree with one of your respondents that takes exception with your HR Department analogy. I have personally experienced few HR departments I would consider appropriately aligned with the business. I also can't accept your characterization of the problem as being a "rift." The problem is pervasive, far-reaching and multi-dimensional (as evidenced by the huge variation in responses to your blog). It is so much more than a rift. The problem is a lack of good IT Governance - and not the WSJ's narrow view of IT Governance (the need to rationalize IT investments). It is one of my mission's in life to dispel the notion that IT Governance is synonymous with IT Investment decision-making. It is much more than that. After reading the responses to your posting I continue to believe that IT Governance is the answer - if you accept the following: The goal of IT Governance is to ensure: - IT is aligned with the business - IT delivers value to the business - IT appropriately manages risk - IT appropriately manages resources - IT appropriately manages performance To do so, the business must sponsor, advocate, and participate in the following IT Governance processes: - Integrated Business & IT Planning - IT Investment Assessment, Prioritization, Funding & Benefits Realization Accountability - IT Financial & Resource Allocation - Project Prioritization & Decision-making - Emerging Technology Evaluation & Adoption - Client Relationship Management - Building & Maintaining Applications & Infrastructure - Provisioning of IT Services - Outsourcing Services - Audit & Risk Management - Architecture Management - Standards & Review When the appropriate decision-making accountability is assigned and the appropriate decisions are fed into these IT Governance processes, every problem raised by your readers can ultimately be addressed. Unfortunately, few enterprises understand this and even fewer have the audacity, fortitude and resiliency to complete the long and difficult journey. And finally, yes, I need a CIO who understands business, business leaders (and users) who understand IT, and IT personnel (not just Managers) who understand the business. I look forward to your posting on MIT's take. I expect to see your comments on the great Peter Weill's theory on "IT Savvy." Good stuff. Steven Romero, IT Governance Evangelist Read my IT Governance Evangelist Blog at http://community.ca.com/blogs/theitgovernanceevangelist/

Locrian_Lyric
Locrian_Lyric

fortunately for us, we have a financial officer on *our side* helping us to do just that. Half of our problem is that we still fancy ourselves as sorcerers conjuring up magic and that all the masses should just stand in open-mouthed awe of us. Now that any idiot can(and does) own a computer or an iphone or some other fancy gadget, the magic is gone. Because of that, non-tech types see IT as they see their gadgets; nice to have, but not necessary. The way to adress the problem is to demonstrate the 'value added' nature of IT today. If you can walk into a meeting with accounting/finance and demonstrate the *value* you have to the company, you no longer present yourself as a cost center, but as a profit center. Q: "What is the value of what you do?" A: "Well, we've automated several systems which enables us to:(hire fewer low-level employees to do gruntwork) | (focus on gaining an edge over our competitors by...) | (raise customer satisfaction and loyalty, as demonstrated that customer rollover has dropped by x% from the last quarter) We don't exist but for the value that business sees in us. It's time for us to start tooting our own horns a bit.

wild0104
wild0104

I don't know if other IT departments face the same challenge, but our CIO has what can best be described as "shiny toy snydrome". He finds a new technology, software, etc that he wants to impliment and gets the ball rolling, well next week rolls around and there's a new shiny toy on his mind. He usually keeps his ideas to himself, as well as his plans for rolling it out and implimentation, until the last possible second when he needs something done by a member of the IT department. One of our Engineers got a set of Jenga blocks one year as he felt like his job was a constant game of Jenga, with a new block (i.e. project/task) being placed on top every week. So while we are implimenting a lot of cool new technology it is rarely planned well, and the impimentation is usually a fly from the seat of your pants/shoot from the hip. Testing is virtually non-existant, we usually end up having a field test/rollout out all-in-one, where we're fixing problems in a production environment. Keeps the job from being dull, but also makes one want to hit their head against their desks some days.

Aneita
Aneita

Well I'm surprised that Faisal Hoque, well known for his thoughts on IT/business convergence isn't mentioned in this article. His 2005 book "Winning the three-legged race" rejected the concept of "alignment" as a continuation of IT and business separation. Convergence describes the blending, acknowledgement and working in concert that is required to have the successful relationship that will move business into IT and IT into business. His book outlines many of the issues and proposes solutions. "Sustained Innovation - Converging Business and Technology to Achieve Enduring Performance" is also a good read. Check it out at: http://www.faisalhoque.com/

al
al

Have you not seen HR bringing in the wrong type of people to an organization or a new marketing approach that does not resonate with the target market? Is this not misalignment with the business. It is that IT is not understood that the failures of IT stand out. The business looks at the IT manager as a butler. 'Alfred get me X and Y by Z'. Has the business objective been communicated to IT? Has IT management explained the corporate goals to the staff so that they can make informed decisions? Who decides that the CIO candidate is a person 'who has business savvy but can also gain the respect of the techies in the IT department'? Recently I have seen organizations who believe that they are bringing in this type of IT management. What they have done is bring in professional managers who have only a superficial understanding of the business and IT. They have project plans and meetings. As more IT managers are hired, they tend to be people from within the industry but with less hands on IT experience. A new island is created within the organization. Traditional IT is now separated from the business by the new management team. There is more management of plans, yet less and less is delivered to the organization. The IT staff may be working hard but not effectively for the organization. All parties become frustrated. ROI suffers. Morale suffers. One obvious indicator of a misunderstanding of software is when a manager believes that there is a lightened work load because there are fewer instances of something. In fact it is generally more challenging to develop software to support a transaction that may only occur once a year, because, it is generally less understood by the typical subject matter experts available to IT. It is important to have a mix of strong technologists and business knowledge within IT decision making.

michael.myers
michael.myers

Jason - I like your article. My PhD dissertation covers this aspect of IT and business alignement. It's a very complex and fragmented issue within the industries, primarily the vertical industries. But I have come to conclusion that maybe the view is not alignment but rather morphism. IT is not being aligned it has always been there. What is happening is the business processes and services are just being automated. That puts an easy picture on it. An organization needs to look at what its doing today and how can it automate their specific functions, processes and business goals. In the end its not IT alignment but rather full IT takeover, which would then change the context of IT from a support organization to structure of the business itself. In essence a firm should not view technology as a tool but rather they should view their entire business as technology. Mike Dallas

vohalloran
vohalloran

Jason, I don't think any IT department is really well aligned with the business since this is a relatively new idea. However, I also work in the construction industry, where IT is just as disjointed as the industry, so I may be biased. Regarding your three steps: I think you should switch #s 2 and 3 (if they are listed by importance) because if you can first teach your IT people about the business, then it should follow that business people will realize the benefits of IT. Training in the use of IT is a very important consideration. At my company, I'm finding that the more business process reengineering that I do, the more IT the business employees want. They are responding well to small projects that simply make their lives easier. I am aware of the importance of communication and keep ongoing, open communications between myself and the business staff. The lack of communication coming from the IT department is a major detriment to business/IT alignment. These employees must be taught the importance of letting their users know what is going on with the system instead of waiting for phone calls when there is a problem. Since I recently obtained a master's degree in information systems, I am aware of the importance of the users and communication with them in the workplace. However, one of our IT employees, who happens to have control over the network, believes in communicating only when absolutely necessary. It is frustrating for the other IT staff members since we are also excluded from knowing what is going on and because we are more approachable, we get the brunt of the user's questions, which we can't always answer. I think communication skills and business knowledge should be taught starting with the IT staff, followed by teaching the business staff some basic IT skills and what IT can do for them. At all times, the alignment of Business and IT should be considered in the context of the organization's overall goals and strategy to keep IT projects from getting out of hand. In my opinion, integration of IT is the fact that there is a computer on every person's desk and that if the computer system were not working, the employees would not be able to perform their jobs. Alignment is the idea that IT agrees with the goals and strategies of the business. I think integration has already been achieved and alignment has not. Vicki

Craig_B
Craig_B

It seems to be there are a few parts to IT. IT Day to Day - Maintaining systems and Networks, Helpdesk tickets, providing customer service, etc. and IT Projects - Planning, Designing, Improving, Moving the company forward. The problem is usually the same people are doing both jobs, departments are understaffed, so you end up in firefighting mode untill the end of time. Usually upper managment seems to want a Porche but on a Vespa budget. Then upper management looks to outsourcing because they really don't understand what's going on and they can just dump it off to someone who does. Exec Summary: Upper Management does not understand IT, so they do not invest in IT.

bigbigboss
bigbigboss

IT should not be the area that drives utilization/exploitation of IT in business operations. It is the role of business managers. If a VP of production doesn't know how to exploit the capability of new machinery, it is the VP's fault, not the mechanic, nor the purchasing agent, not even the engineer which recommended that piece of equipment. Improving IT literacy after a person is hired is not going to work. Hiring people with the right knowledge, especially about his/own field, with track record of creative use of all kinds of new technologies is the key. What you want from a CIO is, first of all, the ability of running an IT shop to deliver the services the company needs, effectively, adaptively, creatively, and lastly, efficiently. Secondly, ability to hire the right people, including those who can explain the technology, their pros and cons, when asked by the business people. CIO is a manager with all the managerial duties, but not one to transform the company. That is the CEO's job. Having business areas bearing and justifying for all of their business expenditures, including IT operating and investments. If department X wants gizmo Y, X better be making money with Y, or the X manager goes. It is just like any other piece of equipment, like a truck. Or, if X department wants 7/24 service for Y, X better be paying all the costs for such service, and be making money from it. In the good old days in the 60's and 70's, IT was new and needs marketing to internal clients. Therefor funding IT centrally to make the pain of experimentation with IT in line business was necessary. Now, line managers not knowing the value of IT should be fired. It is time for line departments to bear all the cost of IT services and goods they use, just like financial resources. Line departments should bear the cost of IT programs, even if they are corporate in nature, and can only be useful if all departments participate, like document management. That's the only way they won't waste the money, by doing it half heartedly. Make the success of these corporate programs part of the annual objectives of line managers, not the CIO, will make implementation much easier. The objective of the CIO should be delivery of the technology components - hardware, software, computer operations - to the line departments effectively and efficiently, and not the utilization rate of the service.

Locrian_Lyric
Locrian_Lyric

The article spoke to their own frustrations. They finally got rid of the CIO who was causing all the trouble, but it was too late for their IT dept, which was in ashes. There was a terrible tug-of-war when I was there. The business wanted things done yesterday, and the IT dept had an attitude of "Go pound sand, you'll fit your problems to our solutions". That attitude was not only fed, but enforced by the CIO. Then the outsourcing began, oh do I have some stories about how they handled THAT one!

brucebozza
brucebozza

Your argument is really a non argument about the difference in wording (alignment or integration). If you actual look at the theory, research etc that underpins alignment you would see that there really is no difference - its about IT becoming an enabler to business success. How you do that from one business to another will differ, and there are many approaches that can help (portfolio management, solid governance, benefits management, program mgt, process optimisation etc). Of course, it is also encumbent on us in IT to educate business, but we must do that in business terms and not expect them to become as technically literate/competent - that's our job and not theirs (and hence why alignment and not integration - it isn't an equal partnership - it serves the business and not the other way around).

nick
nick

Jason, I think that you are very close to the mark here. Integration rules. Unfortunately in my experience, the business rarely understands IT. The simple answer to that is that CIO's and Senior IT Managers need to get good at selling their benefits. However you can lead a horse to water but not make it drink. My experience is that many, not all, business managers and executive and boards are stuck in the mindset of IT being a service, fixing PCs on desks, buying printers, providing core applications. Nothing about enabling the business. I work in a firm that is quite enlightened, there are some true believers in IT. However these same people rvert to the "fix my computer" approach very quickly when subjected to a bit of stress or time constraint. Our problem is one of IT maturity. Accounting systems (as an example) have been around a long time, pre dating, computers. Double entry book keeping is the same done in a ledger or on a PC. People have grown up with these principles, they are part of culture. Computers and IT have not reached that stage yet. The IBM PC turns 24 this year. Windows Vista turns 1. Most of our decision makers still struggle with technology. Today I spent an entire day, writing a paper on why we need good security and cannot allow certain system functianlity when accessing our network from an Internet Cafe. No accountant has to explain basics like balancing a cheque book. Contrast organisations run by our new age entrepreneurs, they are agile, use IT as a weapon. I guess after all it is an age and experience thing.

trevorg
trevorg

Customer: What is the most amount of services I can get for the least amount of dollars? Vendor: What is the most amount of dollars I can get for the least amount of services? Once you understand the answer to these questions outsourcing is simple. The problem I see that most companies only think of the first question.

mark.duckett
mark.duckett

Unfortunately a lot of the problems trying to align IT with the business stem from political power struggles. In my experience everybody has an opinion on how IT should be run and how they could make it simpler. These comments often reverberate around board rooms with little opportunity to reply. Demand on IT departments is higher than ever with expectation of being able to deliver applications and services at lower cost, after all that?s what outsourcing gives you doesn?t it? Well the reality is far from that assumption, in my experience outsourcing does help to break up some of the institutionalised memory which exists in long standing IT departments (the geek factor if you like) but it seldom comes at lower cost and most certainly has a much higher management overhead. There is still a significant gap between CEO?s and their CIO?s and I have often heard I don?t want to know what is under the hood I just want to drive the car. Well if IT systems were produced in factories by robots and the only variances were colour and engine size then you could take that attitude, but in today?s world how you build your IT systems has a significant impact on how you do business, especially if you are a global player. My advice to CIO?s is to understand your business and don?t try to compete with the CEO or the CFO but instead try to coach them on the impact of good IT systems and practices, learn how to produce arguments on a financial and marketing basis and always be on the lookout for that marketing opportunity to sell your services as a positive contribution to the business.

Tony Hopkinson
Tony Hopkinson

It would have been a show stopper where I was as well. It was used to sneak one or two other bits in though. And some people, I have to admit, did take the urine.

Ishron
Ishron

IT is about providing services, right? Since when is FAD a service. IT Managers should be looking to the business to define the key business functions needed for the business then providing the services that are the solutions for these key functions. When IT is implementing technology to appease some knee-jerk ?gotta have that!? reaction to the latest technology seen at some trade fair then the battle is already lost. How does IT serve the business in this case? Where is the business benefit? Obviously there isn?t any but I think everyone here has been a part of some boondoggle implementation project that had no value to the business. Since when does some vendor drive business needs? They don?t! There is nothing wrong with using Windows 98, if it is part of the services needed for a key business function. The key to success is delivering services that provide these key business functions for the business. What?s in your Services Catalog? Are these things that the business needs? If these questions can?t be answered by everyone in IT then the battle is already lost. Forget business alignment, if IT can?t tell the business why it exists then why is there IT?

Locrian_Lyric
Locrian_Lyric

I've seen IT depts pulling their hair out because mgmt goes with the latest fad that nobody has any idea how to work. (and mgmt won't pay for the training) I've seen IT depts struggling with ancient equipment and programs(DOS on a 286 in 1998!) and other backwards stuff that would curl your hair.

No User
No User

You still are looking at IT as performing the role of a servant. Certainly we all need to get along and more importantly we need to work together using our different means towards common goals. That said we also have out own separate work to perform. That is why you have different occupations. We are not Uniworkers. By far the biggest obstacle to over come no matter what approach you take is the departments have a natural tendency to focus on their tasks as taking priority over department to department co-operation and in doing so they create problems for themselves. They then view those problems as being caused by the others. The irony is that the need for department to department co-operation was setup for the intended purpose to prevent the problems that are created by not doing so. Focusing on your own departments needs at the expense of the needs that other departments have for that cross over co-operation comes back on you not out of spite but because that which was needed went undone. There are always cross over points from one department to another just like from one group or person with in a department to another. You have checks and balances where no one person performs the entire routine for security and error checking sake alone. The process starts with Sallie then goes to Fred then to Bob and either goes back to Sallie or over to Nancy depending on certain factors. What also happens is that departments have a natural tendency to pander to their own people. Specifically pertaining to IT that is where you have users not wanting to do "X" because they don't want to and not doing so creates certain hard ships for them. They feel IT should just shut up and come a running to fix what ever "X" was designed to prevent. You will find that all the different departments no matter how much they interact with each other have an unequaled dependence with IT via the equipment they use. By that I mean dept A may send forms to Dept B but both tap on their keyboards all day long everyday. That is something they all have in common. Everyone of them have several recurring problems that can on one hand be prevented and the other self corrected with out the participation of IT folks. They have an overwhelming tendency to NOT want to do that and it is a great source of friction between them and IT. The company on the other hand with perhaps the rarest exceptions wont staff IT well enough to handle those problems. That leaves IT under staffed, under budgeted and over worked. All combined you have a lot of grief all the way around. That all to often leads to that vicious cycle where the other folks wont do things to both prevent problems and learn how to fix them, they bust on IT and IT is over whelmed and busts on them. More and more IT resources are drained while more and more is dreamed up for IT to do. You can be a Great communicator and a Slick Willey combined but the best politicking you can do over the long haul will be marginal at best with peaks and valleys. That said the standard business folks are determined to "TELL" IT and not have IT take control where it makes sense and they all work together where that makes sense. That said it has a tendency to force IT to play CYA and GOT YA politics which IT tends to have a natural ability to do. The fix is to view IT a simply another part of the business and not a service. It's all down hill from there. You then have IT working with the rest of the folks to find the best solutions for the business.

Locrian_Lyric
Locrian_Lyric

let the other idiots be the first to latch onto a new technology, then we'll poach their best people if it turns out to be more than a fad.

jbarbalace0
jbarbalace0

Yes and no, IT services must be paid for or justified in business practices, but just hiring knowledgeable managers is not enough, investment in continuing education for those managers is paramount for continued and future utilization of existing an emerging technologies. You can hire a manager knowledgeable in todays technologies but in a year or 2 it has changed, so educating those people MUST continue for this to work.

mikeb
mikeb

Your comment about wording is exactly what I thought when I initially read this. If business-IT alignment was called business-IT integration, this blog entry wouldn't exist. Even the action items that Jason suggested are right out of some of the most significant research on business-IT alignment. I went into more detail on my own blog - http://www.wecanhelpit.com/blog/.

michael.crocker
michael.crocker

Hi, I worked at a large global technology company that had been started and run by engineers. As the senior management backgrounds shifted toward finance and marketing, I saw the attitude about IT shift more toward viewing it as a cost center. This lead to IT support being off shored and other cost saving measures. At one point all of the departments were asked to cut their budgets to save money. The IT solution was to send all the contractors home for a month. This was implemented without consulting the business departments. While IT looked good by making their numbers, this added extra costs to the business groups when their projects were delayed. Mike Crocker

pedrop
pedrop

I believe this is just the tip of the iceberg. The belief that CEO' and top end exec's have is that by purchasing the latest and greatest version will solve their problems across the board. Reality is that the business is inefficient... No system or IT strategy can fix that without changing the internal processes. New upcoming companies have used new technology and software to model their business processes, while "older" companies are unable to turn the "ship" around. The excuses are too risky, too expensive, too much uncessary changes. Our company, a large retailer has been patching systems, business holes with quick fixes, until the next buy. unfortunately that buy never happens, and the patch is a permanent fixture of IT structure. Our leaders are forward thinking people, but that crucial alignment of business and IT is just not happening quick enough. We have good IT strategies internally, but the crux of system is far from ideal to the requirements of the business. We have lost good developers and system architects with this strategy, as frustration sets in when month after month new problems arise with the old patches. We get the feeling that the IT CEO has other priorities right now to worry about strategic matters.

nick
nick

I think that the feedback so far reinforces Jason's points, it isn't easy. Some one touched upon training. My training budget is shared by HR and we don't have enough to go around. Our senior staff won't go on IT training, they don't see it as necessary. People don't see the benefit of training on the expensive software tools that they use. We use MS Word extensively, competency in it is not a pre-requisite for recruitment. It should be. And yes I also fully agree with the people who have said I need to explain in their terms what the benefit is. At the end of the day though people need to listen to the message, no matter how well it is explained. I liked the comments from the "X-Box" generation. I think that you are spot on, when you live and breath information technology because you have had it since birth you will integrate it into your business practices. Also the comments about the mobile phone. It is a simple device to make and receive phone calls. How many people take it beyond that and use the Calendar (integrated with Outlook), contacts, calculator, notepad, camera, mp3 player etcereta. Some certainly, the majority? I suspect not, the reason being "it is too difficult to learn". Regards

jmarkovic32
jmarkovic32

It's basically a generation gap. The majority of companies are run by people who didn't grow up with computers so it never became part of their every day lives. These people probably don't have a computer in their homes and if they do it only sees limited use. My generation grew up with computers. We used it to learn, work and play. I go home, read TR, pay some bills online and then fire up my Xbox 360. I can't live without computers and if I ran a business it could not be run without IT being part of the DNA of the company. The baby boomers have lived most of their lives without computers. They've learned to get by. If they have to use IT, they use it sparingly. Notice I say "use"; it's a service not a tightly-woven business unit. My company sees IT as "Equipment Costs". It's an expense. When a business pigeon-holes IT in that way, it's easy for costs to get out of control. It's easy to not have an IT Strategy. It needs to be seen as an enabler like accounting and HR. But then again, this is coming from a guy with a Myspace profile who uses a computer more than his car and can't live a productive life without IT. It's easy to believe that IT should enable a business when IT enables my life.

Sporty1
Sporty1

I agree, much of the problem is lack of understanding of IT by business.

Golfloon
Golfloon

The problem many organisations have is IT reports into a CFO and having no Board level representation means that the message gets at best diluted or worst of all translated. My CFO translated "An e-mail vaulting solution will minimise risk by ensuring we capture every e-mail" to "The IT guys are going to implement a system that will file your e-mail for you" Until organisations realise that without technology representation at board level who can explain the relationship between people, process and technology then most organisations will never see the ROI for technology investments.

dfvidalo
dfvidalo

Hello, I think that IT must play a more active role in organizations. In a company that I worked, I bring change of users IT perception. At the beginning, they view it like a unavoidable problem. After some intense training for months that was focused in showing users IT advantages, the users start to change their views. For example, they realize they can do their job faster using IT applications. But in most other companies that I worked, I have only found sleepy IT bosses. They don't launch any IT initiative targeted for users. And the final result is that users complains led to budget reduction and outsourcing.

GoodOh
GoodOh

I don't think we can use the "IT is new" line to defend the bosses anymore. If the boss is 60 PCs/terminals appeared as normal business tools when they were in their 30s. Boss 50 - computers in their 20s Boss 40 - they have never worked in a world without computers as everyday objects. The excuse that 'it's all so new I am too old to learn' is just twaddle. They wander round using mobile phones all day everyday which are far newer without complaining that they are 'too new to understand'. Whatever the problem is, it isn't that.

GoodOh
GoodOh

"No accountant has to explain basics like balancing a cheque book." Fantastic summation of the key issues here! Belongs (in some altered form) on a Tshirt

martin.mannix
martin.mannix

My firm belief is that IT has a number of facets to it and I see quite an analogy with sport. If you imagine the IT department as being the physiotherapist for a team, some physios (fewer these days, and mainly at the amatuer end) might only deal with more serious injuries or even only particular players, so they are behaving in a fairly reactive way to circumstances. Top sports teams look to every part of their team and their support staff to find competitive advantage. In the physios case, they would assess individual players needs and put together tailored training programmes that help that player dominate in his position. As eluded to elsewhere, younger / more aggressive companies can see the impact of IT in helping the business win, whether it is working with Sales and Marketing to dominate market share or operations to deliver the products most effectively. Both IT managers and Top Management need to foster a relationship where IT is seen to contribute towards business success.

jbarbalace0
jbarbalace0

The second question is true, but I think the first question needs to be 2: 1. What is the most amount of services I can get for least amount of money, 2. Will the service provider speak our language, both technically and socially. (this is especially important with overseas outsourcing) Social language: Many times I see outsourced service providers that are out of country not speaking good common language (English, Spanish, German, etc.), which can cause a big language barier and friction. Technical Language: They also must be able to recognize and speak to the level of the person they are working with. Often times they speak to simply to a tech person or speak to technically to a non tech person, at times belittling them. This can cause friction in all cases and hamper business operations. This tends to be a big problem. The trick is to find a outsource provider that has people that can recognize (not just work from a script) your organizations techies from ordinary users and work with them both on their level.

michael.brodock
michael.brodock

hehehe... that is the most concise and relevant discourse on outsourcing I have ever read. ;) Good job.

Mr L
Mr L

...and as a long time admirer of Eliyahu Goldratt and other constraint theorists, I believe you've overcomplicated things more than a little bit in this case. To me this all seems fairly basic: Either your IT department is a synegistic partner in the business process, as an enabler and provider of competitive advantage in the marketplace, or it should be as fully commoditized as possible. Simply put; if you're not actively improving your organization's bottom line through enablement and innovation, you had best be working to provide IT "utilities" to the business as cheaply as possible...before someone else does.

michael.brodock
michael.brodock

good article and I enjoyed reading it, now if we could only put it into practice... ;)

llmasano
llmasano

IT management has been for a longer time the major source of the rift between IT and Business, hence the ?consultants? calls for alignment and the like terms. We cannot continue blaming the historical background of IT, but have to come out and engage the management. I still find CIO or IT managers who happily sit silently through out management meeting, and speak only when they are directly asked to speak. I know they may be afraid of turning the spot light on themselves, thus promotion of IT is not on their agenda. IT can be promoted in the organization by speaking out, carefully introducing topics to the management that aim at enabling the business, and follow on these topics with tangible deliverables that can be verified by the management. This will entice the management to turn to IT for solutions for their business problems. If the CIO is not on the same team sheet with the management, it is difficult to volunteer a solution to such problems. Of course education cannot be replaced. I believe there are still some CEO and CFO out there who hate IT and do not want to have any close relationship with it. It is bigger challenge for a CIO if you have a CEO who does not use even an email system, how can you transform you IT to integrate it with the business is such a situation?

Locrian_Lyric
Locrian_Lyric

I remember the panick and how ugly testing was. What most don't remember was the sept 9 bug. 9/9/99 was a common test date in many programs, and it did bite us a bit, though we did manage to squish most of those bugs.

CG IT
CG IT

Have to admit that those like Jobs, Gates, Intel, Cisco, Maxtor/Seagate all realized that once a company buys their equipment or software, which probably will function for 7 to 10 years, they all would be out of business in a very short period of time. So they had to create a need for businesses to continually buy, buy, buy. I think they all took lessons from the women's fashion industry. One isn't part of the "In Crowd" unless one has the latest and greatest. If your not at the cutting edge, your lagging behind, not a competitor, you'll miss opportunities. Your old and passe'. No one wants to be a has been or seen as old and outdated. There's no way to stop the madness when advertising is geared to pull everyone's emotions of being left out, left behind, old and outdated. Unless your run Vista, Windows Server 2008, Cisco ASA or their latest Enterprise gear, or have the latest Intel processor in your systems, it's old, outdated, and one is being left out and left behind.

RknRlKid
RknRlKid

I agree with what you are saying. Vendors do not drive business needs. Unfortunately though, vendors do force business spending by their business practices. Microsoft again comes to mind here (although others do similar things). Why does each new version of Windows make previous versions of applications obsolete? This requires complete re-purchasing of applications. Why aren't new versions of applications compatible with older versions of the same software? Office 2003 files were incompatible with Office 2000, and now Office 2007 is incompatible with Office 2003 files. And since very little runs on Vista, you have to purchase every application again in a Vista-compatible version. This might make great sense to MS, but it makes no sense to me. Each new Windows version ups the ante on hardware requirements too, forcing purchase of new hardware. Its a never ending battle! The answer is for a company to decide on its own needs, then stick with it. Unfortunately, as you and other posters noted, someone with influence will see some "gee whiz" thing and want to have it, which creates havoc. And on top of that, manufacturers regularly make their own products obsolete, which also feeds the upgrade frenzies. Its time we do like Susan Powter, and say "Stop the insanity!" But I know that isn't going to happen any time soon.

Howley
Howley

I agree with your observation, all too often businesses think that a new system will fix the problem when it is the process that is the problem. I am seeing it now even with internal IT projects. However I would argue that business doesn't need to understand IT, IT needs to understand business. IT needs to offer comprehensive solutions. The nature of IT, the systems approach as well as mapping processes and interactions can be expanded and applied to the business. Instead of saying, "yes we can implement a new faster order sytem" we need to say "We can help you make your system more efficient by overhauling the inefficient processes and applying new technology where needed". IT is in the unique position to look across organizational silos and identify process inefficiencies. This is something that non IT managers don't have and don't take into consideration when asking for solutions to fix their problems. As such IT needs to start leveraging that view to help their companies do things better not just faster and cheaper.

alaniane
alaniane

If there is no clear benefit to learning something, then it's considered an extra or a luxury and not a necessity. I don't consider it too difficult to learn how to audit the books. But, since it is not required for me to know how to audit the books, I choose not to learn how to do it. My job is to program, not to do accounting. Now, if I have to write a program that audits the company's books, then I will learn the basics of auditing because it has become a necessity to accomplish my job.

Xenotron
Xenotron

The reason why it would be the CFO's fault in the original post is because, in some companies, IT reports directly to the CFO. There is no CIO.

KJQ
KJQ

I work for a research organization where IT is seen as a "necessary evil", and "a dollar not spent on research is a wasted dollar". As the senior IT person, I am not part of any of the senior management committees. In fact, I am on the organization chart at the same level as the building plumber and electrician. I consider myself to be an excellent communicator, but since I seldom even get to speak with my direct supervisor (once or twice per year, other than when answering to complaints), I don't get to explain much of anything. If we weren't government funded we'd have been gone years ago. The fundamental problem with IT today is that everyone wants computer systems to be "toasters" - easy to use, nothing to maintain, and when it breaks, buy a new one. We are years (if not centuries) from this. Management want to cut costs across the board as this is the only way to continue to increase profits, but the use of IT is growing exponentially. I think we need the equivalent of the great depression in the IT realm to wake people up.

emphron
emphron

I absolutely agree. Who other than the CIO can understand the strategic contribution which IT can make to the business? If that contribution isn't understood at the level of the senior executive team, then it's because it isn't being articulated clearly enough by IT leadership. Blaming the situation on stupid CFOs is just a cop out by IT.

AlphaW
AlphaW

Now that our CFO is leaving I will do anything to stop reporting to accounting folks. Sometimes I just need a hard drive for a server, and I do not really want to explain why I bought it to 4 different people in accounting. Now they put another layer in with another manager and I have to report to him on IT projects. Since I am an good communicator I think this is more of a cultural thing than personal, they just do not think of IT as being present at the strategic table. There is still this IT "tech" mentality in smaller companies. They see you as a hired hand, not someone to help them grow the business regardless of your background.

Mr L
Mr L

Or the fault of whoever it is that runs IT for the CFO? If the CFO doesn't get it, it's not his fault, at all. The CFO's job isn't to "get IT", nor is it the CEO's, or the board's. If the CIO can not ensure that his management understands what IT can bring to the business in terms of value propositions, find a new CIO.

jbarbalace0
jbarbalace0

many IT organizations see their IT departments to small to have a real voice. I have worked at several places, operating information technologies, managing outsourcing of many services, and who did I answer to? The R&D (research and Development Manager). IT did have enough going on to expecially when we had to find solutions to meet federal and state compliance issues to represent our selves. Every other department had their own presintations to the board but us. Granted we are always trying to develop new ways to improve our systems and meet the business needs, but I am not sure that qualifies as R&D. Luckily I was usually lucky enough to have my annual budgets make it to the board unedited, as well as my projects. Unfortunately they were presented to those purse handlers by someone that barely could pronounce Cisco let alone say what or who it was. I was lucky enough that I could actually go to the IT departments of those multiple companies that had an investment in us to have them back my budgets minimizing the amount of uneducated selling my "representative" to the board had to do, but why not have the true head of IT state the case directly. I often had to understate expectations to compensate for the overstating of expectations by those doing the presentation.

jmarkovic32
jmarkovic32

Why did you assume that your CFO understood E-mail vaulting? Sure IT representation would be a cure for this, but I think this addresses a language issue. Just ask: "What would Jesus do?" No, I'm not being facetious. Jesus is renowned as a great teacher. Why? He mastered the art of simplifying complex, foreign concepts in a way that the layman could understand it. He used similies, metaphors, hyperbole, illustrations, etc. Can IT folks learn to communicate IT to the layman? For example, I wanted to implement a SAN solution to consolidate storage and backup. I cannot assume that the CEO, CFO or CIO would understand what these were, how they worked or why we even needed it. I had to speak in a language each of them understood. For the CEO, I had to show how it would help the company from a compliance and security standpoint and for the CFO I had to show how cost effective it would be over our current distributed model. I don't say "SAN", "disk-to-disk", "vaulting" or any other buzzwords or acronyms. People tend to fear what they don't understand. IT should focus on helping them understand.

gaitrosd
gaitrosd

I certainly agree. The role and complexity of IT appears not to be well understood at the board level. I will give you another problem. In many cases it is the CFO who has a key role in selecting the IT manager of Chief Information Office. As such, they tend to fill the position with someone more apt to outsource IT and focus on the financial aspect of IT rather then the service aspect.

mmiller
mmiller

I would agree there are always some people who don't want to learn. However, there are plenty of people who will learn and actually advocate for the change if the benefit to them is made clear, they're involved in the decision, and they receive proper training. You bring up mobile phones -- the mobile phone has a clear benefit to the user and is relatively simple to use (iPhone, anyone?). Do all IT systems come with this same promise? If they did, would change be as feared?

drfez
drfez

There is one organization teaching companies all over the world to do just that. www.iaitam.org Go out and look at their member list on the website. It reads like a Who's Who.