The days of tight budgets continue, and information technology executives at many companies still face a credibility gap when it comes to their promises to deliver projects on budget, on time—and with a clear business payoff. Sure, lots of tough cost-cutting during the past couple of years has helped ease some of the eye-rolling: Our latest survey of more than 1,200 IT and business executives shows that more than 80 percent say alignment at their company has improved over the last three years. Still, less than 30 percent say their IT organization meets the needs of their company very effectively.
In this special issue of CIO Insight, our second annual issue on the alignment gap between IT and business strategy, we offer an in-depth look at efforts by both sides to “follow the money”—in hopes of bringing new discipline, leadership, metrics and strategic thinking to the business challenge of using technology to boost the bottom line.
Part of the problem comes in the form of how to measure the impact of technology. In “The Trouble with ROI,” a panel of nine CIOs, CFOs and business management experts discuss the often frustrating exercise that technology executives face when trying to measure and articulate the real return on technology investments. Participants suggested it was the lack of IT-business alignment, more than anything, that led company executives to use ROI to force IT to prove its worth to the organization, more than as a way for cross-functional teams to measure the impact of their modernization efforts—inside companies and across their marketplaces.
Indeed, alignment must be a team sport, inspired by tough business leadership and joint IT-business ownership of technology projects, as our two case studies demonstrate. In “Driving Change” we look at how Yellow Corp. CEO Bill Zollars, with the help of CIO Lynn Caddell, considers IT-business alignment critical to the long-term survival of the company and makes it a condition of employment. Dave Clementz, former CIO of ChevronTexaco, agrees with that philosophy: “To change the culture, you either change the people or change the people . . . There’s no time for stragglers.”
In that spirit, this special issue looks at whether IT financing impacts alignment efforts, and asks whether too much alignment can make companies inflexible to fast changes in the marketplace. We also consider a new approach to portfolio management that aims to make sure CIOs are pursuing the right projects.
There is no easy path to alignment. But one thing is clear: Nobody achieves it simply by expecting the CIO to work miracles in a vacuum. Companies can only win when business and IT work side by side to achieve a common goal. Anything less is a recipe for disaster.