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March 12, 2002

IT-Business Alignment: Week 1

There's a New Sheriff in Town

"Today, we start running our IT shop as a business."

This proclamation was how the Information Services (IS) department of HomeWorks Inc. began its successful journey toward IT and business alignment early one afternoon in May 2001.

In making this announcement at the start of his weekly staff meeting, John Mills, the relatively new CIO at HomeWorks, was immediately disappointed at the less than enthusiastic response from his staff.

Executive Summary

For Ted Kingston, the stakes couldn't be any higher. His CIO has just put him in charge of the new IT-Business Alignment initiative at HomeWorks Inc., a $2 billion home and office supply retailer. In the opening chapter of the new Executive Insider series on IT-Business Alignment, Ted lays the groundwork for launching what could be the toughest project of his 20-year career in IT. Find out the three main areas that will be aligned in the HomeWorks initiative and learn about the crucial role of financial planning in the success or failure of these types of projects.

Journal Background

Here are a couple of important things to remember while you're reading these installments:

I am writing these journal entries after the fact. That is, HomeWorks completed the initial phase of the alignment project in late 2001. And so you're not kept in suspense, everything went off pretty well.

The work, however, is far from over, as I will talk about in the last installment of this series. Please keep in mind that this diary is only covering the launch and preparation of the IT-business alignment initiative.

Also, the journal format I'm using forces me into a somewhat linear progression of events. Be aware, most of the efforts described here will be happening concurrently throughout the life of the alignment project. For example, in a later entry I'll be talking about how the CIO went about evangelizing our alignment efforts and communicating the philosophy behind it to the rest of the organization. In reality, Mills began this effort right away with his peers and the CEO — before we even started the alignment project. He carries on this work today, making sure that the alignment process continues to evolve and mature. We'll talk about this a lot more in installment six.

Cast of Characters

Click here to meet our cast of characters.

Been Here Before

As the newest director on his Senior Leadership Team (or SLT as Mills liked to call us), I had learned in the last two months that the other three directors were not about to get too excited about any of his initiatives until they had heard, and endlessly debated, how a particular initiative affected their area of responsibility.

Frankly, they had good reason to be cautious. Mills had been running the IS Department and these directors through the ringer during the six months since he came on board as HomeWorks' third CIO in just seven years. As time would tell, they hadn't seen anything yet.

Looking around the small IS conference room, I noticed that Andy Lyons, the fiery Director of Tech Services, slowly nodded his head while sipping his Diet Mountain Dew. Roger Zimka, the long-time Director of Store Systems, looked up for a moment from the elaborate doodle he'd been constructing along the margins of his legal pad and smiled slightly. At the far end of the table, Marilyn Immelt, Director of Applications, wrote the words, "IT-Business Alignment" in a small black-and-white notebook and waited, pen poised over paper, for Mills to continue.

As for me, well, I didn't react much either. But then, I knew this announcement was coming. I knew exactly what Mills was going to say next because we had discussed it earlier in the week after he appointed me the first ever IS Director of Business Alignment and Planning.

Out of Sync

HomeWorks (not its real name) is a successful $2 billion home-and-office supply retailer located in the Midwest. Like almost every other retailer, HomeWorks has been slowly rebounding from the effects of the recession and the fallout from Sept. 11th. Sales and margins are up, and 2002 looks brighter for the company.

Unfortunately, the IS department hasn't been contributing its fair share to this improved corporate picture, at least in the eyes of HomeWorks' CEO, Winston Davis. Which is why Davis hired John Mills away from a small west-coast retailer, where Mills had built a reputation within the retail community as a CIO who could turn around failing IT organizations. The 250-person IS team at HomeWorks would be Mills' largest and most complex leadership challenge.

Since Mills came on board, Davis has been after him to bring the IS department into line with the defined goals and objectives of HomeWorks. According to Mills, the CEO was giving him six months to learn the organization, get some immediate projects completed (such as the installation of a large merchandising system), hire or promote some new staff (including me), "retire" a few people whose leaving was long overdue, and generally get the "lay of land."

Ready for the Challenge

Mills feels he is finally ready to make more than incremental changes around the department and move full steam ahead towards aligning IS with the business, which everyone in the executive ranks thinks is long overdue and is the main reason Davis hired him. The venerable CEO of HomeWorks has pretty much left it up to Mills to figure out how to accomplish this goal.