Aligning IT with Business Goals Interactive Working Group Session December 2004 Facilitated by Walter Adamson Digital Investor

Interactive Working Group Session

December 2004

Facilitated by Walter Adamson

Digital 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.

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 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 view of IT

The CEO’s Challenge to IT CEO’s priorities blown project delivery dates; unclear IT governance processes;

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 .

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”

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

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 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

"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.”

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?’"

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!

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

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

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.

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 View http://www2.cio.com/research/surveyreport.cfm?id=80 How To Work With Your Boss http://www.cio.com/archive/100104/boss.html The Depot Goes Digital – Chief Executive http://www.chiefexecutive.net/mag/202/index.htm l The CIO’s Leadership Role in Business Innovation www.digitalinvestor.com.au - see Publications / CIO Series

State of the CIO 2004: The CEO View

http://www2.cio.com/research/surveyreport.cfm?id=80

How To Work With Your Boss

http://www.cio.com/archive/100104/boss.html

The Depot Goes Digital – Chief Executive

http://www.chiefexecutive.net/mag/202/index.htm l

The CIO’s Leadership Role in Business Innovation

www.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

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