Alignment Can Boost Agility in Tough Times
"We are in a business malaise, and it's very dangerous for CIOs, for they risk overreacting to huge cost-cutting demands that can damage the organization."
Richard Nolan, Harvard Business School
Given the weak and volatile economy, many IT and business executives at the conference agreed on one critical element: IT-business alignment is more critical than ever. Richard Nolan, the William Barclay Harding Professor of Management of Technology at the Harvard Business School, told attendees that today's economic malaise is forcing companies to be ever-smarter on strategysmarter about what they cut, what they keep, how they find opportunity in a downturn and what they plan to do when better times return. Only in companies where IT and business have forged a mature partnership can that happen, he said.
In these tough times, companies that cut strategy in favor of short-term cost- cutting, warned BSC's Robert S. Gold, risk losing their competitive edge against companies that keep the IT-business strategy fires burning. "What seems to be happening is that IT projects are being delayed," Gold said. "We're not making as much of a continuing investment in technology. The infrastructure is coasting and in some ways delaying the strategic investment that allows business units to set their sights emerging from this economic slump, to position themselves to establish competitive advantage once the economy improves."
Gold even predicted a "sorting out" of firms that have "cut off their noses to spite their faces" by trimming so much from IT investment that they're ill-positioned to compete later. He said smart companies continue to make some carefully targeted strategic investments in IT that will position them better when the economy improves. Companies that sacrifice IT-business strategy for short-term cost-cutting, he added, "will be the firms that will be seriously disadvantaged in the years to come."
This article was originally published on 12-21-2002