Alignment | The Accidental Successful CIO

Posts Tagged ‘alignment’

6 Reasons That IT / Business Alignment May Be Impossible To Do

Wednesday, January 13th, 2010

Image Credit You Can't Align If You Can't Communicate

You Can

A quick quiz for you: what has been the #1 task on every CIO’s to-do list for the better part of the past 20 years? If you guessed “aligning IT with the rest of the business” then you are correct. This has been an IT goal for the past 20 years? What’s up with that? When you become CIO what are you going to do to solve this problem. Can it even be solved?

It’s All About Communication

Why has something that sounds so simple when we talk about it been so hard for CIOs to do? Tony Kontzer over at CIO Insight has taken a look at what’s been holding CIOs back and he’s come up with one answer: communication.

I’m pretty sure that we all know where this one is going. The non-IT business folks like to spend their time talking in business terms and we over on the IT side of the house seem to be only able to communicate using IT jargon. The results of this inability to communicate can be disastrous.

The Tower Of Babel — IT Style

When the business side of the house and the IT side of the house find it hard to communicate, what happens is that they simply stop communicating. When this happens, each side goes off and starts to do its own thing.

I can’t tell you how many firms that I’ve worked for where I’ve seen this happen. When communication breaks down between IT and the rest of the business is when you start to see the multiplying factor start to show up: multiple email systems, multiple ERP applications, etc.

From a CIO perspective, this is the worst thing in the world that can happen. The reason is that every IT system that gets added to the company means that there is one more system that needs to supported forever and that boosts the cost of having the IT department do work that does nothing to help the company’s bottom line.

The Big 6

When you become CIO, how will you be able to measure how well the IT department and the rest of the company are doing in trying to align themselves? Well, you’ll have to fall back on what everyone in IT loves the most: metrics. The trick is knowing what needs to be measured. Here are the top six alignment metrics as recommended by the Society for Information Management (SIM):

Communication Channels: Have effective communications channels been established between the IT department and the other departments in the firm? Are these channels being used?
Metrics: are metrics in place and are they being measured in order to determine where the firm stands in it’s efforts to align how the business processes operate and what the IT department spends its time working on?
Governance: are there processes in place that will ensure that what IT works on lines up with what the company’s true business needs are?
Partnership: is there a partnership between IT and the rest of the departments where each is taking actions to make the other more successful?
HR: does the HR department understand what the company is trying to align and are they taking action to attract and retain the talent that will be needed to make this happen?
Technology: are the right tools in place and available to be used in order to drive the changes that will be needed to transform how business is done once the alignment has occurred?

What All Of This Means To You

For way too long CIOs have been looking for ways to try to align what IT does with what the rest of the business needs. So far they have not been successful.

The primary stumbling block has been the simple fact that there exists an enormous two-way communications gap between the IT department and the rest of the firm. IT communicates using technical terms that nobody else knows about while the rest of the firm communicates using business terms that make no sense to the IT staff.

A first step in finally bridging this gap is to implement the six alignment process metrics that we’ve identified. When you become CIO these will provide you with a way to measure your progress in finally getting the IT department to become a meaningful part of the firm. Nobody ever said that this was going to be easy, but at least now you have a plan for how you can accomplish the impossible.

What do you think is the biggest barrier stopping the IT department from working more effectively with the rest of the company?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

What We’ll Be Talking About Next Time

When you become CIO, you’ll probably have all of the technical skills that you need to stay on top of today’s cutting edge IT issues such as storage, bandwidth, cloud computing, etc.Â However, there is one thing that you may have forgotten to get: a law degree…

Tags: alignment, communications, communications channels, communications problem, HR, it alignment, it governance, metrics, partnership, technical jargon, technical speak, technologies
Posted in alignment | No Comments »

3 Ways To Bring Business And IT Together

Wednesday, June 3rd, 2009

Executing A Single Business / Technology Strategy Leads To Success

In the end, it all comes down to execution. No, not chopping heads off, but rather how you go about having your IT department perform the tasks that the business needs them to do. How hard could this possibly be?

What’s The Goal?

The power term “alignment” is tossed around a lot these days. I think that it’s gotten used so much that a lot of us have forgotten just exactly what it means. In its simplest form, when a company is truly aligned then it is able to mange both its business and its technology together.

As simple as this may seem, too few companies are able to achieve this goal. The reasons are many: differing personalities, budgets that are unrelated, lack of accountability for business results, etc.

Fredric Fishman has spent some timeÃ‚Â thinking about this and he’s come to the realization that in order for a a company to commit to managing both its business and its technology together, then it needs to do three things well:

Provide a clear vision for the organization
Create a well-defined roadmap that shows how to get to the future
Measure outcomes against predefined criteria

One Strategy For Both Business And Technology

If you have any hopes of bringing your business and technology activities together, then you’re going to have to make sure that the firm has a living business strategy. The world changes and your business strategy needs to be able to change with it. One way to accomplish this is to implement processes that will allow feedback on the business strategy to be collected and used to make adjustments.

The next step is to make sure that everyone understand just exactly how technology is going to be used to achieve each one of your business objectives. Finally, don’t just hope for the best – make sure that you have criteria in place to judge success before you start any IT project.

Strategic Imperative: Talk & Spend

A company’s goals are no good if nobody knows about them. Make sure that any planned investment in technology has a direct link to a business objective. This kind of decision making won’t happen overnight. You’re going to have to take the time to create internal processes that will allow your staff to learn how to make the correct investment decisions.

Once again, good communication is at the heart of any well run organization. You need to make sure that EVERYONE knows what the expected outcomes are and what the expected business results are. This will establish a sense of ownership and will make sure that everyone has “skin in the game”.

Measure, Measure, Measure

The best IT programs in the world don’t amount for much if you can’t determine what their impact was. You need to monitor the outcomes of each IT investment decision so that your decision making process just keeps getting better.

This is where IT folks can really shine: collect those metrics, stats, and usage data and use these numbers to measure impacts and report results.

Final Thoughts

As you can see, the steps that we need to take to align technology and business are pretty straightforward. The challenge is that this calls out not for a technology solution, but rather for a human-to-human solution. Within IT we’re great at writing code and hooking up new systems, now we just have to do a better job of talking and communicating with the rest of the company.

Questions For You

Within your firm, do you feel that you have a clear vision or is it just a piece of paper on the wall? Do you know how the company is going to achieve its stated goals? Are there effective ways to measure your IT results in place today? Leave me a comment and let me know what you are thinking.

Click here to get automatic updates when
The Accidental Successful CIO Blog is updated.

Coming Up Next Time

HP’s CIO Randy Mott has done some fantastic things in helping to turn the company around. However, now things are starting to get tricky and it’s not clear that the company is going to be able to continue to be successful…

Tags: align it, alignment, business, business alignment, business it alignment, business objectives, business process, business strategy, CIO, communication, criteria, execution, goal, information technology, IT, it alignment, IT project, it strategy, leadership, measure, metrics, monitor, roadmap, strategy, technology, vision
Posted in alignment | 4 Comments »

How IT Can Help Uncover New Products

Monday, March 23rd, 2009

IT Departments Have The Data Needed To Uncover New Products

“Alignment”, “Innovation” – arrgh! Who in the world of IT is not sick of hearing these two words used over and over again? Yes we’d like to be able to help out the rest of the business, but our IT budgets are being slashed left and right. We don’t have either the staff or the budget to launch a big new program to collect whatever data is needed in order to tell the company which direction it should go in. Or do we?

It is in the nature of any IT department to collect data on our customers. We already have disk pack after disk pack of historical data about everyone who ever showed even the slightest interest in one of our company’s offerings let alone how much information we have on our existing customers.

In that data lies the secret to how IT departments can help the rest of the company uncover new products. Ranjay Gulati, James Oldroyd, and Phanish Puranam are three researchers who have been studying this problem and they’ve made some interesting discoveries.

Harrah’s is an owner of several casinos. Their IT department has historically collected reams of data on their customers in order to support targeted direct mail campaigns and attempts to increase customer loyalty.

However, it was not until the IT department took a closer look at the data that they had already captured about their big spenders (“whales” in casino speak) that they realized that they had the answers that they needed in order to redesign their casinos in order to position games where they would get these customers to play even more.

The Royal Bank of Canada faced a problem – its consumer credit divisionÃ‚Â needed to have more customers. The IT department went back and took a look at the credit card applications that they had rejected in the past. What they discovered is that many of these people had improved their credit scores since being rejected. This gave the bank a great set of potential card holders to go after.

Clearly all IT departments are sitting on more customer data than anyone ever believed. Now we just have to figure out how to make that data work for us. It turns out that there are three principles that provide the core for doing this correctly. We’ll talk about them next time…

Does your IT department store enough information on your customers? Have you ever gone back and tried to put that data to use? Were you successful? Leave me a comment and let me know what you are thinking.

Tags: alignment, business, business alignment, business it alignment, CIO, data, Harrah's, information technology, innovation, IT, new products, Royal Bank of Canada
Posted in alignment | 2 Comments »

Alignment 101: How To Do It

Monday, March 16th, 2009

Knowing How To Align IT And The Business Is The Key To Success

Achieving alignment between the business side of the house and IT is one of those things that everyone likes to talk about when they are putting together the goals for the upcoming year, and then nothing ever seems to get done about it.

A survey that was done by the consulting firm Bain & Co. may contain the reason why we never seem to make any progress on this: we’ve been trying to do the wrong thing. The Bain crew believes that IT departments must first become efficient, and then worry about becoming aligned with the business.

Now the trick here is that you can’t just do one at a time. Karenann Terrell who is that CIO over at Baxter International says that “There is a complexity to doing both, but that’s the job.” Her point is that you can’t wait to become 100% efficient before you start to work on the alignment thing.

Let’s say that you get the efficiently thing up to a point where it’s good enough, what then? Too often CIOs view alignment as being a situation where IT stands ready to do the bidding of whatever the rest of the business needs. That’s not what the business wants. Instead, the business needs IT to participate in the strategic decision making process – help do the thinking for the rest of the business. Perhaps a better word here would be “integration”.

Finally, the alignment of IT with the rest of the business needs to be supported from the CEO on down. Without top-level support, it’s never going to succeed. Strong collaboration between the business and IT is what will make alignment work. Remember that alignment is a dynamic process and that it will always be changing along with your business.

Do you feel that your IT department is effective? Do you believe that it is aligned? What steps are you taking to make it more effective? Do you think that you need to bother to align it with the rest of the business?

Tags: align, alignment, Bain, Bain & Co, business, business process, CIO, CIO Insight, costs, effective, effectiveness, growth, information technology, IT, knowledge
Posted in alignment | 1 Comment »

Just What Is This “Alignment” Thing?

Wednesday, March 11th, 2009

IT Departments To Be Effective Before They Worry About Alignment

Once upon a time the Supreme Court justice Potter Stewart said that pornography is hard to define, but “I know it when I see it.” In the world of IT it would appear as though alignment with the business side of the house is a lot like pornography in this sense – it’s hard to define, but we’re all pretty sure that we’d know it we saw it. A survey that was done by the consulting firm Bain & Co. sure seems to confirm this.

It’s always a good idea to make sure that we’re talking about the same thing before we get into a big flame war. It turns out that the best definition of IT alignment that I’ve come across comes from Brian Watson over at CIO Insight magazine who defines it as “…synching up strategies [between IT and the business units]“.

The kids over at Bain have found that the two sides of the coin, IT and business, all too often misunderstand just what the concept of alignment is. Specifically, what a lot of companies try to do is to dole out IT resources to different business units and then they say “Ta-Da – we’re aligned”. They really should be syncing up their strategies.

Bain believes that making your IT department more effective is the correct first step before you go worrying about alignment. Effectiveness is defined as being excellence in process management and execution. Of course, you need to be able to make these repeatable and consistent. On the other hand, alignment means that IT and the business have a proactive relationship.

I’ve always looked at these two parts of making the business run more smoothly as being joined at the hip. Effectiveness is how things get done every day. Alignment is the direction that you are moving in. Both are needed to have a well run IT department.

The Accidental Successful CIO