Align IT with Business Goals
Issue
Even if a company isn't a technology business — say, an Amazon.com that generates its revenue entirely via e-commerce — almost every company today relies on technology to do business. But that's not to say that every IT organization is in line with its company's business goals, which requires more than supporting users and keeping the network running. For IT to truly be in alignment with business, the organization must evolve from a reactive department to a strategic business partner.
In September 2006, research firm Forrester asked CIOs if they believed they were in alignment with their business peers. Only 21 percent ranked themselves as fully aligned; the other 79 percent of CIOs reported that getting funding — as well as respect — for new business solutions was an uphill battle. CIOs know they need to effect change to put their departments in line with the business groups, but, as Metzler put it, "It's incredibly easy to say, but incredibly difficult to do."
In Forrester's report "Moving From Reactive to Strategic IT," the research firm identifies three critical actions a CIO should take. Be warned: Aligning the IT department with the lines of business amounts to a monumental shift in the organization's culture, which ultimately changes the nature of IT staffers' jobs. A CIO needs to refocus IT on business outcomes, bring opportunities to the business and place technology in a business-outcome context.
Analysis
The first step may be the most difficult to take, because it means shifting IT's focus from putting out today's fires to delivering tangible outcomes, such as optimization or innovation, that matter to the business executives. Of course, dealing with what is necessary to keep the network running smoothly will always be important. But, as crucial as quick response times are, they do not necessarily reveal to the rest of the company the ways in which IT can be used to have the greatest strategic impact on the business.
To deliver business outcomes, it's important to understand what the company's goals are, regardless of whether you were involved in setting them. For instance, you need to know what key initiatives your company is working toward in the next fiscal year and how IT will be involved in the process, including new hardware , software or IT manpower that will be required.
CIOs must also explain new technologies to their peers at the big table in terms of what outcomes it promises the business. According to Forrester, "technology solutions require long-term investment before benefits are realized, which IT's business clients have little patience for when they don't see the connection to their own agenda." Whatever the technology, you need to make sure that the outcome is clear, whether it makes employees more productive or the company more competitive. In the end, Forrester believes that IT road maps will become more relevant to the business — and more likely to get you buy-in from fellow executives — when the IT organization is focused on the business outcome of any potential innovation.
"Who wants to go to the business manager and say you have MPLS [Multiprotocol Label Switching] — that sounds like a disease! He'll say, ‘You're a geek, I never want to see you again'," said Metzler. MPLS improves the performance of network layer routing and the scalability of the network layer. Also, it makes it easier to manage the network for quality of service. So, following Metzler's example, you might tell the sales manager that you're using MPLS to reduce latency and jitter on time-sensitive applications, so the VoIP calls that by his sales team makes to customers have toll-quality sound.
"You have to put what we do in terms of what the businesspeople care about. Talk about things businesspeople use — infrastructure is a utility, but it's the applications that people care about," Metzler suggested.
The final step toward IT and business alignment — and to making the CIO a true peer to the business executives — is for IT to offer new opportunities for the company. By combining a focus on creating business outcomes with your expert knowledge of what technology can do, you can best suggest how to use technology to build new solutions that can, say, generate more revenue, offer an innovative new service to customers, create efficiencies in the supply chain, increase employee productivity or improve some other particular business function.
Next Steps
Once you've initiated this massive culture shift, you have to make sure that your IT staff understands what is now expected of them. Clearly, for IT to be aligned with business, the way everyone — from your network administrator to your programmers — does their jobs will change if it hasn't already. For instance, network administrators across all industries are being asked to ensure more than network availability; they're also working on application performance, and sometimes even on enterprise security.
"It's a challenging future for these people. If they can embrace it, it brings so much more career growth. It's an exciting time, but exciting is a double-edged sword," said Metzler. "They need to be somewhat aggressive and aggressively work with their manager to make sure they're getting the training and cross-training [they need]."
