Governance and the CIO
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
Governance and the CIO
Paul Tallon, an assistant professor of information systems at Boston College's Carroll School of Management, sees some of the same downfalls. Weighing in on the alignment issue a few days after the Bain survey story appeared, Tallon noted an alignment "paradox": Despite all the touted benefits of aligning IT and business strategies, he said, companies still failed to find a payoff.
"The point...is not to become overly fixated on the goal of alignment at the expense of knowing what you are committing to along the way," Tallon wrote in an email to CIO Insight, recalling a 2003 column he wrote for this journal. "With IT, the journey is as critical as the destination."
Sometimes companies make bad IT decisions, Tallon said, but don't know they're mistakes at the time. The blame, though, shouldn't lie with CIOs; instead, it's a lack of governance that allowed the missteps to occur. "With the proper governance, flexibility will not be so impossible," he wrote. "Good governance allows firms to have alignment and flexibility at the same time." And that, in turn, can eliminate the paradox.
Tom Pettibone, former CIO of Philip Morris, New York Life and BMW and founder of Transition Partners, a management consultancy, struck a similar note. Alignment, he says, must be guided by the highest levels in the corporate hierarchy. And if CEOs and CFOs don't buy into the idea, Pettibone says, neither should CIOs. "The job for the CIO is to understand and comprehend the shifts management is making through the governance process and adapt to that complexity," he says. "If each business unit wanders off and does its own thing in Lone Ranger fashion, without the governance processes in place, that's wrong."
CEOs and CFOs are constantly evaluating investments, with one department fighting another for dollars. The challenge for the CIO, Pettibone says, is to understand the complexity behind the evaluations and accurately predict what it will take to deliver the projects up for consideration. But in the end, the frontoffice executives must make the final call.
Alignment is dynamic, Pettibone says, and must trickle down from the highest levels. But it doesn't always happen that way. "Governance is relatively easy to put in place but not widely adopted by CEOs and CFOs," he says. When companies undertake the wrong projects, it's often because of a lack of communication among CEOs, CFOs and CIOs. "That communication is improved through the governance process," he adds. Regardless, the key to alignment is strong collaboration between business and IT, says Wander, who became CIO at Guardian Life last December. He pushes his staff to work closely with business executives, emphasizing collaboration that goes beyond teams to reach across the entire corporate structure.
Still, challenges remain. Harkening back to the dispute over terms associated with alignment, Wander questions how businesses can quantify their success in achieving strategic synergy. "Alignment is a nebulous concept; what does it really mean?" he asks. "Everybody gets the concept, but how do you go measure it?"
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