Finding a SolutionBy Tony Kontzer | Posted 06-04-2009
Why IT and Business Can`t Get In Sync
This just in: Successfully aligning IT with the business is hard to do.
OK, that may not be breaking news, but after decades of IT-business alignment talk, one would think the IT world would have this down. Instead, alignment efforts continue to be hampered by factors such as poor communication between IT and business leaders, a disconnect between IT objectives and business needs, and misguided reporting structures.
Which explains why IT-business alignment remains a top priority for IT executives in 2009. In fact, in separate surveys conducted last fall, CIO Insight and the Society for Information Management (SIM) both reported that alignment was the No. 1 management priority for 2009 among IT executives, and in the case of the CIO Insight survey, it wasn't even close.
If that sounds like IT has a lot of work to do on the alignment front, it's only because it does, says Jerry Luftman, former vice president of academic community affairs for SIM and the man who conducted its latest survey. "There is no one thing IT can do to improve its relationship with the business," Luftman says. "There are a bunch of things." (See box at right.)
CIOs and consultants seem to agree, however, about where alignment starts: communication. Most IT departments still seem to be unable--or unwilling--to operate outside their jargon-filled comfort zones, and that leads them to address relatively simple business needs with overly complex technologies.
Rudy Puryear, global IT practice head at consulting firm Bain & Co., says he constantly hears from business leaders that everything IT does takes too long and costs too much, and that they lack an effective dialogue with IT. "It's kind of embarrassing that the average IT shop hasn't made more progress on this," he says. "Achieving business alignment has been the holy grail of IT for 20 to 30 years, but the dialogue is broken between business and IT."
The reason? "They don't have a language that works," Puryear says. "The business wants to talk in business terms, and IT talks in technical terms."
The potential consequences can be crippling. Business units start pursuing their own technology solutions, IT develops applications in a vacuum, and the next thing a CIO knows, he or she has multiple ERP applications, billing systems and customer-management systems. The IT environment becomes unwieldy and expensive to manage, and it becomes almost impossible to adapt business processes quickly to changing demands. At some point, Puryear says, CIOs need to consider British politician Denis Healey's law of holes. "If you look up and you see you're in a hole, stop digging," says Puryear. "Stop adding more complexity."
The communication chasm between IT and business has never been as critical as it is today, as the flailing economy throws one curveball after another at business. In this environment, the lack of an effective dialogue means that IT can't properly analyze--or even understand--business needs, which makes it difficult for the business to respond quickly to changing market demands.
Finding a Solution
Finding a Solution
That's not to say that progress isn't being made. Most IT shops have at least recognized that they can't speak in techno-babble and expect to communicate effectively with the business. And more advanced companies have realized that communication is as much about structure as it is about language. Even if a company has established a healthy dialogue between IT and the business, it's likely to duplicate a lot of effort if it isn't set up to connect similar needs across business units.
Thrivent Financial for Lutherans, a faith-based, not-for-profit insurance provider, was looking to improve communication and eliminate wasted effort when it adopted an alignment strategy to center the IT-business dialogue on business capabilities--rather than technology jargon--and to ensure that IT had a holistic view of needs across the business.
The strategy proved itself in the past year when CIO Holly Morris and her team began developing an application for the company's phone sales staff. At some point, it became clear that the application would need digital signature capabilities. Concurrent to this, several other parts of the business had submitted requirements for capturing digital signatures. The IT team was able to match up those requirements and focus on building out the digital signature capability as a single, reusable service rather than a custom feature in the phone sales application. "If we'd not had our process in place, there's a good chance we'd have built that capability several times," Morris says. She estimates that not duplicating the effort saved the company $3 million.
Meanwhile, for years now, companies struggling with alignment have addressed some of their communication issues by hiring CIOs with business backgrounds and business managers with IT experience.
Still, while crossover experience helps to promote the spirit of alignment, getting rank-and-file managers to execute remains a challenge in most companies. That's because most IT workers operate in short-order-cook mode, says Kevin Gordon, CIO of corporate systems for insurance provider Genworth Financial. "Someone asks us to do something, and then we go do it," he says. "We need to be more proactive about knowing the business and finding opportunities."
That would require CIOs to develop a depth of knowledge about the businesses they serve--a depth they lack today. "What I've run into is a mind-set among leaders on the team that there's got to be a business sponsor," Gordon says. "It puts people into this mode of thinking that there's a business person who comes up with an idea and they translate it, rather than thinking we should be surfacing as many ideas as they are."
But even an IT department led by business-savvy managers can be undermined by something as basic as a company's reporting structure. Luftman and SIM measure a company's "alignment maturity" score on a scale of 1 to 5, based on answers to a set of alignment-related questions. SIM's most recent study finds that companies whose CIOs report to the CEO register the highest average score (3.26), compared with companies whose CIOs report to the chief financial officer (2.79) or the chief operating officer (2.97).
All measurements and strategies aside, real alignment truly is a state of mind. And no one has to be more attuned to it than CIOs. They can't afford to live and breathe alignment every minute--they've got an actual IT environment to run, after all--but it has to be on their minds a good portion of the time for it to succeed. "I don't know that I'm thinking about it overtly as I sit here," says Gordon. "But in terms of business processes and thinking about how we can make things better, that is a lot of what I'm doing every day."
Qualities of Successful Alignment Initiatives
Jerry Luftman, former vice president of academic community affairs for the Society for Information Management, has been behind SIM's alignment surveys for many years, and over those years, he's learned a thing or two about what works, and what doesn't. Here are what he considers the building blocks of a successful alignment effort:
- Established communication channels between IT and the business;
- Effective value metrics that measure the success of alignment efforts;
- IT governance processes designed to ensure that IT's actions are in line with business needs;
- Existing partnership between IT and the business;
- An HR staff with the skills needed to attract and retain the best IT and business talent; and
- Technologies in place that can effectively drive changes to the business.