Finding IT`s Business Value

In a recent Forrester survey, only 15 percent of IT leaders declared themselves to be fully aligned with the business.

What that tells us is that IT-business alignment isn’t just a problem–it’s a plague.

Business executives paint a similar picture. Nearly 80 percent of the 600 business executives who responded to Forrester’s Q3 2008 North American Business Online Survey ranked IT “somewhat” to “critically” important for key business activities, such as lowering the company’s operating costs, improving workforce productivity, and acquiring and retaining new customers. But less than half these business leaders saw IT as doing “well” to “excellent” in supporting those needs.

Alignment always seems to top the list of CIO priorities and concerns. What’s behind this perennial challenge? IT leaders told Forrester that improved perception of IT is driven first by IT doing a good job–like improving systems and network reliability, increasing IT process quality and consistency, and managing project execution. But beyond doing a good job, business’ perception of IT is improved by effective metrics and IT value communication.

Many CIOs themselves cause much of the problem; to put it bluntly, they misunderstand the role communication plays in IT’s business relationships. The real driver of the alignment gap is the all-too-often-unanswered question: What business value results from IT’s spending?

The current economic recession isn’t helping, as CIOs struggle to find the business value that rationalizes and justifies their budgets in light of enterprise-wide cost cutting. How do the CIOs cause the problem? They measure and communicate IT’s operational excellence instead of IT’s business value. They talk uptime, availability and server utilization, instead of product-line profitability, business cycle times and customer satisfaction.

And what about measuring business value? Only a third of the IT leaders in a Forrester survey measured postproduction to see if projects delivered the value that the business case anticipated. And less than half that number track IT’s operations costs associated with enabling key business activities.