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And the problem is -- US! CIOs fail to help CEOs take advantage of IT

David Moschella, global research director for the Leading Edge Forum, (part of CSC's Office of Innovation) polled 200 business executives and 200 CIOs - more than 400 senior executives from large businesses in Europe, North America and Scandinavia - with this question:

What is the greatest obstacle to implementing technology at your organization?

CIO Magazine liked the question so much that they asked it on CIO.com, and lo and behold, both the Leading Edge Forum and CIO studies had the same finding.

The inability of the business side to take advantage of more powerful IT capabilities was public enemy number one.

In other words, as the LEF put it:

"a major barrier to more extensive implementation of IT is the capacity of general management to understand both its potential and its limitations".

What's our take?

Achieving effective alignment requires that discussion, communication and agreement take place about a range of IT "pillars" as they integrate into the business, including the collaborative development of value propositions.

If CIOs and their leadership team are adept at developing value propositions, then the general managers of the business will be engaged and will understand how IT can contribute.

While CIO.com and LEF hinted that their survey results are indicative of a user-side problem, the reality is that CIOs have to help their clients buy IT.

So in this worldview one of the roles of the CIO is to help their clients buy IT - to firstly understand the buying system that their buyers live in, and then to configure the buying environment (not the selling environment).

How to Configure the General Manager's Buying Environment

Ten tips for coaching GMs be intelligent buyers of IT

Understand the people and the other initiatives that they are involved with at the moment. Understand the rules and the way they they partner with other suppiers and service providers inside and outside the firm. Understand the norms and the beliefs driving the GM. Understand their values and reward systems. Learn how to help them justify change. Help them make sense of the changes that will be required when using a new technology or service. Understand how big the task is for the GM to achieve buy-in from others and help design that process. Understand and map the complexity of political integration for the possibilities offered by IT. Seek credibility in small steps. Accept that the solutions and priorities may not be in IT.

See these: ITinsyn.com - Business-IT Alignment CIOs - beat the outsourcing bullies by getting insync IT-Business Value Propositions - Setting the Agenda

The bottom line - CIOs have to design solutions, working with the GMs, which fundamentally support the justification for change and how the GM is going to get systematic buy-in within his network of stakeholders for that solution.

Often, CIOs and their teams provide just information.  Information does not show people how to buy and how to change their behaviour. 

The solution space is bigger than the problem space

The core rule here is that any solution space will be bigger than the problem space. The IT-side is thinking about the design space, and the GM is pre-occupied thinking about the solution space.

Bridging this gap, and helping GMs understand the potential of IT through helping them understand how to buy an IT solution, will go a long way towards removing the obstacle revealed by David Moschella.  IT will also be a good start on the journey towards IT alignment.

Technorati Tags:
CIO IT Alignment IT architecture CEO IT

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What is the greatest obstacle to you as CIO working with your business General Managers?  Post your Comments.  How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he has the ability to identify business opportunities that benefit all sides, creating networks of customers, suppliers, investors and intermediaries. His breadth of knowledge and willingness to push himself beyond the brief are tremendously valuable." Zenon Pasieczny, Director, Saphet Capital Management

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CIOs - beat the outsourcing bullies by getting insync

When Christopher Koch, CIO's Executive Editor, Investigations, published an article ("Tribal Mistrust")commenting on a damning report by Deloitte on outsourcing he didn’t get the response from his readers that he expected.

Koch reported that:

The companies surveyed (25 Fortune 500 companies) still view cost savings as the primary benefit they expect from outsourcing (83%). Yet their experience seems to argue against the logic of this expectation.

For example, 73% of those surveyed said they use multiple vendors to protect themselves from lock-in and high prices. Yet outsourcers derive their cost savings from economies of scale. Companies that spread the same work across multiple vendors reduce the potential savings.

Moreover, having multiple providers increases the management time, money and manpower needed to manage the complexity of multiple contracts - 62% said managing the vendors requires more management effort than originally thought and 57% said they could not free up internal resources to do other projects after outsourcing.

The report says that the era of huge outsourcing deals is over and that the companies that have done these deals are retreating from them.

Koch said that the most telling question of all those in the survey was this: "Did you outsource a function in order to solve a specific problem?" Frighteningly, 83% said no.

He asked: Why is this critical factor seemingly absent from these contracts? Give me your thoughts.

Readers responded with their thoughts, but they were totally unexpected.

Most of you were not surprised by the negative findings of the Deloitte report on outsourcing that I posted recently. But I was surprised by your widespread opinion that the problem isn’t the outsourcers, it’s the business and IT leadership inside the companies that do the outsourcing.

Business executives are portrayed as gutless bullies, failing to hire competent IT leaders and using outsourcing as a weapon of intimidation rather than a tool for improving business. A representative comment:

"[Outsourcing covers] up the laziness of an organization. These organizations simply do not have the stomach to attract the right team, manage it well and deliver value to their shareholders."

Left without viable means to measure the underlying worth of their IT departments, businesses adopt a tribal approach, pushing out the internal IT tribe in hopes that the outsourcers, new and friendly, will be better neighbors.

Koch remarks that it is a pretty ugly indictment of business and IT leadership, overall.

What seems clear to me after reading all your comments is that business people lack the tools to make a rational decision about outsourcing—at least in the bigger, more complex deals—and CIOs lack the metrics and information necessary to defend their place in the business. The only hope I can see out there today for providing more transparency to IT costs and capabilities is to begin working with some of the governance and process improvement models out there, like Six Sigma, ITIL, COBIT and CMM.

Our Take?

The focus on Six Sigma, COBIT, and ITIL in themselves is fine, however they are methods and tools whose roots are in operational efficiency and continuous improvement.

The fundamental link that is missing is the link between the business and IT, what is often called the alignment between IT strategy and corporate strategy. And CEOs and CIOs lack the tools to be able to measure and transform their organizations into synchronization between IT and the business

That’s why CEOs turn to Governance and such, in an effort to reach out for and grasp anything that may help.

For example, the IT Governance Global Status Report (2004) found that 80%+ of CEOs recognized that "IT Governance or some form thereof is required" to resolve "T issues". The Report also found that 57% of CEOs looked to IT Governance to align IT strategy (and 53% to manage IT risks).

However the Report concluded that "solutions in this domain are not yet available".

We offer a solution which is called ITinsync, and which is completely focused on a strategy-driven approach to improving business performance through effective IT alignment.

As a by-product is also links into IT Governance – in a way which gives governance a business-oriented purpose rather than being driven simply by compliance.

We believe that this is a first, and is based upon solid principles, and yields measures of key indicators in a matrix, such as leadership, management, adaptability, and strategy, project and actions, measured across key factors such as business engagement, managing change and delivering value.

We also test the clarity of the organization’s vision and the mutual commitment of its people to each other and the organization and the IT group.

CIOs who get insync will not have their future shaped by the CFO, and cannot be outsourced because you cannot outsource engagement, and will in most cases be in a position to be trusted to deliver an outsourcing strategy as a business partner rather than a be outsourced as a business victim.

See the Reader Comments on Koch's article Tribal Mistrust.

Technorati Tags:
CIO IT Alignment IT Governance IT strategy

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What are the key steps and elements of getting IT insync with the business?  Post your Comments.  How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he has the ability to identify business opportunities that benefit all sides, creating networks of customers, suppliers, investors and intermediaries. His breadth of knowledge and willingness to push himself beyond the brief are tremendously valuable." Zenon Pasieczny, Director, Saphet Capital Management

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Effective Engagement: How CIOs Can Solve the Business-IT Alignment Gap

From IT Business Edge - Sept. 1, 2004 Issue 35, Vol. 2 Editor: Loraine Lawson.

Loraine Lawson, Editor of IT Business Edge, published answers to three questions she asked of me although at the interview she actually asked me four questions. The fourth was a kind of a back-up in case we went off-track in the first 3.

She published the first three answers here, but there's no need to miss out on the fourth - I've blogged it below as the Bonus Question!

Bonus Question: Your blog also recommends CIOs hire people who can act as a bridge between business people and IT.

What skills do these people need and where should they come from - IT or business or outside the company? Does it matter to whom they report?

Adamson: IT often has as many good business people as any other unit of an organisation so the idea that successful IT people are not business people is an outmoded paradigm.

Successful IT leaders have to be business people who are highly skilled in understanding the relationship between IT and business. It doesn’t matter to whom they report and where they come from – with two key qualifiers.

The first qualifier is that if they aspire to the very top of IT leadership and the CIO role then they must be very competent technologists in addition to being business people. They have to understand technology, and the forces driving technology, and how these translate into threats and opportunities for their organisation.

The second qualifier is that the recruitment, people development, leadership assessment and performance criteria for these people should be within the responsibilities of the CIO. This is critical no matter where they report. After all this is a key element of the success of IT within an organisation so how could it be any other way?

About the Editor: Loraine Lawson is a freelance technology journalist based in Louisville, KY. After five years of political and crime reporting, she left newspapers to serve a brief stint writing bids for a Year 2000 disaster recovery company. She went on to become the Kentucky Transportation Cabinet's Webmaster and later joined TechRepublic, a technology site for IT professionals, as a writer and editor developing content for CIOs and high-level IT managers. She can be reached at bizalignment@ itbusinessedge.com.

Alignment Audit:

See the phased Work Plan for my Business-IT Alignment Audit Service

For CIOs read my articles:

- The CIO's Leadership in Business Innovation
- How to Eliminate the Perennial Problem of Mis-aligned IT-Business Strategy
- Why Successful Projects regularly create Discontented Clients, and What to Do About It
- How and Why India's and China's World Class Outsourcing will Continue to Grow.

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Complete and Free Articles on Business-IT Alignment at www.digitalinvestor.com.au

IT-Business Value Propositions, Setting the Agenda
Business-IT Alignment, a Business Core Competence
Business-IT Alignment Process Surveys
Business-IT Alignment, Challenge - Why Is It Difficult?

Technorati Tags:
IT alignment IT insync CIO IT Governance

What's your view on the enduring problem of lack of alignment between IT strategy and business strategy? Where does the key challenge lie? Post your Comments.

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How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he is relentless in forcing managers to identify and articulate their value proposition, the singe-most important factor in working out why they even get up in the morning. It's hard to believe how many people ignore this basic tenet of business life." Zenon Pasieczny, Director, Saphet Capital Management

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How to Eliminate the Perennial Problem of Mis-aligned IT-Business Strategy

"IT investments failing to provide returns" screamed the headline in Silicon.com.

"IT investments are failing to provide the benefits and returns expected, according to a survey of senior IT executives. IT directors ranked the importance of aligning IT and business objectives as high at 8.3 on a scale of one to 10, but the respondents only rated their success in achieving alignment at 6.2," said the article.

For more than a decade, strategic planning and strategy have been at or near the top of the list of topics CIOs report as a perpetual challenge.

But unlike other topics, it's something that's hard to get your hands around. When and how do you do it? With whom? What does it look like when completed--if it ever gets completed? How long is it good for?

According to a study of Global 2,000 IT executives, commissioned by Mercury Interactive Corporation and conducted by Forrester Research of Cambridge, Mass. in August and September 2002, 34 percent rated as a "huge challenge" the task of ensuring that IT plans supported business needs and strategies.

According to McKinsey (The McKinsey Quarterly, 2002 Number 4 Technology) most companies have failed to create true partnerships of this kind, "because IT units often report only to the chief information officer, while business leaders have no incentive to run IT with the same rigor they bring to running the business". They continue ... "If companies really hope to become smarter about technology, they should make their business leaders accountable for getting results from IT investments and make their IT managers accountable for the performance of the business."

AT Kearney, from a survey conducted in December 2001, report that only 17% of businesses had IT strategies that were "fully aligned and developed simultaneously" with corporate strategy. Futhermore, 45% of participants did not feel that their IT strategies were developed to support or align with their corporate strategy.

AT Kearney concluded: "There is much more value to be realized through improved business and IT alignment".

As difficult as it is, there is a solution which I believe will remove the "IT alignment problem" from the top-10 list of executive's concerns.

What needs to be done? There is no one-size-fits-all approach to IT alignment. But you can start by ensuring that you have an IT strategy that everyone, especially non-IT people, can own and understand. Explain how it links to the overall business strategy and make sure that it contains enough short-term actions that drive visibility and credibility.

The CIO's challenge is to make:

client engagement;

value propositions; and,

change management

the IT strategy's key principles of design and operation. The goal is to ensure that these become core management competencies of the leadership team - and not just for the IT department.

If you get this right, everything else should start falling into place. Apply this principle to your strategic IT governance, planning, executive sponsorship, IT investment, IT architecture, project & risk management, portfolio management, IT people management, IT research and development, IT services management and internal/external IT sourcing, and infrastructure decisions.

By developing plans and executing actions based on this IT alignment principle, collaboration will be built from a common framework. The importance of this framework is that it provides a tool to get the managers of business units and the managers of the IT units that support them to align their different goals.

In my experience it is critical to ensure that you have people who can act as "bridges" between business people and the IT experts. There are some real differences of culture, values and language to be handled. Again, make engagement, developing value propositions, and change management their critical success factors.

Ensure that there are business benefits defined at each stage of the program, so that you can clearly align the outcomes from the projects and the technology implementation back to the realisation of business benefits. The regular mapping of business benefits to projects is often overlooked or not managed well, leading to a lack of reconcliation with the business case and lack of credibility. You should trace benefits even though it is a rare, and difficult, process.

Behind the scenes, plan IT architectures for the right reasons.

They need to constantly reflect the latest business vision, key strategy themes and technology trends, and must evolve as the business and technology evolves. Use them to position individual projects in the pportfolio model so that they contribute to a cohesive, efficient whole. This means you can avoid fragmented, hard-to-integrate and expensive-to-maintain solutions. The IT architectures need to echo and contribute to the strategy, not dictate it.

To re-focus on alignment, the key to creating and capturing value through enabling technology is to follow a path of building collaborative value propositions. That is, collaborating at the earliest stage with the business leaders in understanding their customer value proposition and enhancing and enabling that proposition with an IT value proposition.

CIOs must become leaders in the process of creating collaborative value propositions with their customers and their customers' customers. This is a essential competency and the key to achieving alignment between IT and business strategy, and the path to removing this alignment issue from the list of perennial top 10 concerns.

Alignment Audit:

See the phased Work Plan for my Business-IT Alignment Audit Service

For CIOs read my articles

- The CIO's Leadership in Business Innovation
- Effective Engagement: How CIOs Can Solve the Business-IT Alignment Gap (blog) and,
- How CIOs Can Solve the Alignment Gap (published article)

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Complete and Free Articles on Business-IT Alignment at www.digitalinvestor.com.au

IT-Business Value Propositions, Setting the Agenda
Business-IT Alignment, a Business Core Competence
Business-IT Alignment Process Surveys
Business-IT Alignment, Challenge - Why Is It Difficult?

Technorati Tags:
IT alignment IT insync CIO IT Governance

What's your view on the enduring problem of lack of alignment between IT strategy and business strategy? Where does the key challenge lie? Post your Comments.

---

How can I help? Email me; Call (Australia) +61 403 345 632 (direct); +1(817) 382-4453 (SkypeIn USA); +852-8199-0189 (SkypeIn HK);

"We hired Walter to complete a technology audit, but he gave us much more -- he is relentless in forcing managers to identify and articulate their value proposition, the singe-most important factor in working out why they even get up in the morning. It's hard to believe how many people ignore this basic tenet of business life." Zenon Pasieczny, Director, Saphet Capital Management

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