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Session A: How to get IT to think in business terms. Session B: How to get business to grapple with and understand what their decisions mean for IT.
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Aligning IT with Business Goals
Interactive Working Group Session
December 2004
Facilitated by Walter AdamsonDigital Investor
Sessions
● Session A: How to get IT to think in business terms.
● Session B: How to get business to grapple with and understand what their decisions mean for IT.
Managing Expectations
The Number One Challenge for business executives is to manage the CIO’s lack of
alignment between the IT strategy and goals and those of the business and its customers.
The Number One Challenge for a CIO is to manage business executives' unrealistic
expectations of what IT can do on its own.
The CEO’s Challenge to IT
CEO’s priorities
– blown project delivery dates;– unclear IT governance processes;–
The CIO’s View of the World
The CIO’s mind is on their “Greatest Challenges”:
●high cost/investment in new systems & processes● lack of necessary staff skill sets●disconnect between IT and business units● intractable legacy systems●poor project management skills
Often in that order. BUT these are mostly causes.
The CIO is more concerned about effects.
What the Exec Team wants from IT
● Be visible, accountable and pro-active– Show your face– Talk the talk– Seize the day– Talk about problem solving not technology– Anticipate needs before the business does– Establish a solid base– Be a politician
● And manage costs!– Demonstrate your operational capability too
“Day in the life of the customer”
Session B
The Number One Challenge for business executives is to manage the CIO’s lack of
alignment between the IT strategy and goals and those of the business and its customers.
The Number One Challenge for a CIO is to manage business executives' unrealistic
expectations of what IT can do on its own.
The CIO’s Challenge
● "State of the CIO 2004" survey shows that managing CEO and business-side expectations is a major challenge for CIOs.
● In fact, respondents cited "unrealistic or unknown expectations from the business" as the highest hurdle to their job effectiveness, trumping inadequate budgets, proving IT's value, and alignment between business goals and IT efforts, among other hurdles.
CIO Magazine October 2004
Models of IT Interaction
Gartner finds three effective models:
● The first is where the business sets the infrastructure strategy and the architecture of a technology campaign and prioritizes spending.
● A second pattern is where the IT organization sets the strategy and architecture, but the businesses decide on specific applications.
● And a third is in highly decentralized organizations where IT is a centralized function and each business unit taps it to pursue its priorities. McDonald calls this a “federal style of governance.”
The Key is “be at the table”
● The October issue of Chief Executive magazine features Home Depot’s CEO Bob Nardelli, who advises fellow CEOs:
– "You want a CIO at the table next to your chief merchandising officer, your chief operations officer, your financial officer, your human resources officer, because you want him to say, ’OK, what is the best prioritization for the business?’"
Be aware of Lack of Alignment
Warning signs of an IT house not in order:
● blown project delivery dates;● unclear IT governance processes;● lack of organizational structure;● incompatible technology deployments; or,● no IT strategic plan for supporting the
business.
Take action!
CIO’s Steps to Success
● The route to success is circular:
– Actively manage the expectations business executives have of IT.
– Make sure business can count on IT to deliver value.
– Learn the business strategy and communicate IT's role in furthering it.
● Self-improving feedback loop
What the IT Leaders need to Do
● Be visible, accountable and pro-active:– Show your face– Talk the talk– Seize the day– Talk about problem solving not technology– Anticipate needs before the business does– Establish a solid base– Be a politician
● And cut costs!– Demonstrate your operational capability too
The Bottom Line
➔ The fact of the matter is, CIOs have to be both strategic and tactical. That's what their CEOs say when pressed.
➔ But for CIOs to be perceived as strategists first and enablers second, they have to demonstrate that they can come up with ideas to make their companies more competitive while at the same time fulfilling their tactical responsibilities.
Refer to These
State of the CIO 2004: The CEO Viewhttp://www2.cio.com/research/surveyreport.cfm?id=80 How To Work With Your Bosshttp://www.cio.com/archive/100104/boss.html The Depot Goes Digital – Chief Executivehttp://www.chiefexecutive.net/mag/202/index.html The CIO’s Leadership Role in Business Innovationwww.digitalinvestor.com.au - see Publications / CIO Series
Discussion
● Session A: Business exec’s challenge to IT:– Form the relationships– Understand the business– Align IT– Be pro-active– Run the shop
● Session B: IT’s challenge to business execs:– Take responsibility for business processes– Understand the corporate integration issues– Plan up-front to avoid expensive changes later
