GovernIT

A long title, but that is because I couldn’t find a shorter and apt one.

In this blog by forrester research (posted on CIO.com, by the way), CIOs have identified a few things they would like to see in their organizations in 2010.

I’ll summarize the basic points here, while you can read the rest of the article(rather small, actually) here – CIOs spoke, We listened. The basic idea is to improve Business-IT relationship, which as we know is being tried since IT was considered an industry.

How do we get closer to the Business? Lets try some of these:

1. Future trends in IT:  How the next generation of technologies can change the way people interact in and with our business using technology. The Cloud (that sounds like a horror movie), social media, knowledge management etc are the areas which can rock the boat – the boat being Enterprise Architecture in this case.

2. Talent Management – Every industry is grappling with this question – How to find the best people and keep them. Of course, it is heartening to note that IT is slowly realizing that IT is still about people and not about technology.

3. Where do we stand on the scale – Like it or not, humans have reference frames which they use to judge things around them. Corporations are no different. Every senior manager wants to know how he is doing vis-a-vis the competition. This could be in terms of people, services, products etc.

4. IT Governance – Phew! I was afraid this would not be listed. Nothing need be said here, except to note that IT Governance is still considered IT’s headache. Let me reiterate, IT Governance is the Business’ Governance of IT. IT Management is what CIOs do.

5. Communicate value – Everyone needs to market their contributions and value-adds or risk being outsourced. IT still has to do better job in communicating business value, which will come only when IT is one way of doing business, which will come when business realizes the true value and potential of IT and… You get the point.

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There have been quite a few papers over the years stressing that IT has to move beyond providing services and become a business partner.

In this context, a new paper “Transformation or travails” (pdf) approaches it from a slightly different context, arguing that being a solid support to the business no longer protects IT from being outsourced – it needs to be a strategic partner in achieving business objectives.

Additionally, the topic of the IT-Business alignment has been a fixture of IT and business periodicals for over 20 years, suggesting there is significant opportunity for improvement.

In most cases, it does not even do the supporting very well, lament the authors.  IT is fixated on providing technical services, clamors for new toys, points blame on the business, lacks essential business skills and at the end wonders why they don’t have a seat at the CxO table.

In short, IT acts like a child but expects to be treated like an adult.

The paper puts forward some effective ways in which IT can become a value-focussed strategic asset and draws upon some good cases where Business used IT strategically to derive significant benefits.
An interesting approach is taken by the paper on what to expect when IT is strategically aligned – the characteristics and behaviors exhibited can be observed instead of looking at an audit-based approach. This approach is less threatening for everyone and moves away from the compliance mindset, when the organization use “standards” based frameworks.

However, in my opinion, the jury is still not on one point: do all organizations should think about IT as a business partner? In many organizations, especially those that rely less on IT for delivering products or services beyond a web site, business wants IT to remain as a solid, reliable support system. Forrester, in 2006, had a report on the three types of IT organizations currently in the world and makes the point that IT need not always be a partner. (See Three Archetypes of IT – Solid Utilities, Trusted Suppliers, Partner Players)(for purchase).

The multi-billion dollar question in this context becomes – “when should IT aspire to be a business partner?” There are a few cases where it makes sense:

1. IT contributes significantly and directly to Earnings: When products or services are sold on the company’s IT systems directly and does not involve the traditional sales channels. Of course, “traditional sales channels” themselves are becoming online channels, but in this case, I am talking about brick and mortar sales channels.

2. When there are products or services delivered only through IT: For example, a new savings account that is online only, e-books etc

3. When IT provides a level of cost savings that goes much beyond what traditional methods do: For example, just-in-time ordering systems or IT-based tracking systems.

To really drive Business-IT Alignment, every business objective must be evaluated by a cross-functional team that has an IT-aware person on board. The IT-aware person can suggest how IT can contribute towards achieving that objective. Once agreed, the ROI will be measured through standard business KPIs and hence understandable by business. All Business-IT Alignment strategies come down to this – if IT is seen as a channel for business, then you get the alignment.

To quote Andy Kyte, vice president and Gartner fellow, “None of you are in IT; all of you are in business.”

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