The IT press is full of articles on aligning IT with the strategy of the corporation. The questions abound: “How do we align our projects with corporate priorities?” “How do we know we’re working on the right projects?” “Why doesn’t management feel good about IT?”
Guess what: IT seems to be the only department in most companies that worries about this. Have you ever heard questions about whether Finance was aligned?
Or Sales? Or Operations? Or Legal? Of course not. If they’re not working on strategic projects or processes, the CEO will find new leaders who will.
In many ways, IT gets the same treatment. If we aren’t working on the strategic projects, the CIO gets replaced. But replacing the CIO won’t solve the problem if the company doesn’t understand how to align IT with the business.
Alignment isn’t easy. It requires that senior management be prepared to approach IT in a different way. It requires that IT get its fair share of executive time, which it deserves, since IT spends from two per cent to more than 10 per cent of the revenue line. It depends on the recognition that not only is IT essential to the corporate strategy, oftentimes it is the strategy.
As is usually the case, real change starts at the top. If IT isn’t working on the strategic projects, look at how projects are initiated. Often, senior executives are uncomfortable managing IT and abdicate the responsibility for the strategic automation agenda to the CIO. If that occurs, the process is doomed to fail.
Certainly, the CIO will try to determine the most strategic projects to take on, but he will have an impossible time trying to select one over another. Indeed, the very process of making this selection is full of political pitfalls that could crush most CIOs. Would you want to be the CIO who tells one department that its critical project is less important than another’s?
Instead, strategic prioritization is a legitimate and required role of the corporate officers. The size of the company doesn’t matter. Bigger companies have bigger projects, but the principle is the same. If the strategic IT priorities are determined by a consensus of the officer group, then IT can never be blamed for not being aligned. It’s as simple (or as difficult) as that.
The role of IT in this type of situation is a little bit different. First of all, IT must be aware of new technologies and be prepared to present new opportunities to user management.
But if IT can’t convince user management of a worthwhile technology opportunity, it shouldn’t waste its time there. Even smart IT people may not fully understand the intricacies of each user department, and the technology may not be appropriate for that department at that particular time. Remember, line management runs the company, not IT. Go to another department where automation efficiency is understood and supported and the timing is better.
Once a user department shows interest in a project, IT can provide support, but the user department must take the responsibility to sell the project internally and calculate the return on investment. IT analysts can do much of the legwork here, but the ROI calculation includes the total costs to be saved within the department, not just the cost of IT. And user management must be committed to realizing the ROI.
What is IT’s role in all this? We must be sure we understand the users’ needs and the needs of the system, and we must make good estimates of both time and money. We must ensure that we have a stable IT environment, and we must be sure that the systems we build will be efficient. We must work on the retention of our technical staff so that projects roll out on schedule and our IT departments have continuity of knowledge.
This approach gets the entire company involved in IT project management, from the CEO and the officer group to the individuals working in the department. The result is that IT is strategically aligned, just as Finance, Operations, Legal and Sales are. What a concept!
Paul M. Ingevaldson is senior vice-president for technology at Ace Hardware Corp. in Oak Brook, Ill. Contact him at inge@acehardware.com.