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March 12, 2002

IT-Business Alignment: Week 1

There's a New Sheriff in Town

[ Continued from Page 1 ]

At our pre-meeting, Mills told me that he — or more precisely — we are going to do more than just talk about aligning IT and the business. Too often, he said, lip service is all that ever really gets accomplished when the business and IT get the idea that alignment is a priority.

"It's like losing weight or winning the lotto," said Mills. "Everyone talks about it all the time but it seldom ever happens."

"Why?" he asked, even though we both knew the answer.

"Because it's hard to do. It takes time, commitment, and a whole lot of thought and planning. Frankly, the business side is just as bad about not following through with the objectives of alignment as the typical IT leadership side is. Maybe worse!"

Honestly, I'd seen this "death by talking" happen with a number of IT organizations over the course of more than 20 years in the business. I've only been with HomeWorks for nine months — I was brought in to manage the company's first data warehouse project, which rolled out successfully four months ago.

Until working with this determined new CIO at HomeWorks, I'd never seen an IT department that was more than vaguely in step with the business. In fact, more than a few seemed to actually have cross-purposes at the company!

"We are going to do a lot more than talk," continued Mills. He was warming up to the subject now.

"We are going to make fundamental, long-lasting changes in the way this department is run. By God, we are going to be responsive to the needs of the business. We're going to run this place with financial responsibility. We're going to develop solid requirements and only deploy systems and technology that return benefits to the company and help grow this place. We're going to engage with the business, by force if necessary. And we're going to gain the respect of the executives and convince everyone from Davis on down that we know what we're doing."

I don't think he actually took a breath getting all that out. But it was clear he'd been thinking about it quite a bit during the past six months.

"Everyone in the business thinks they can do my job better than I can," he said. "We're going to disprove that starting at the next SLT staff meeting."

He smiled.

A Respected Newcomer

"So Ted, you up for helping me with this?"

I nodded. Then asked the one question that had been burning in my mind since the moment I sat down in the deep leather chair across from his desk.

"Why me?" I asked.

"Two reasons," said Mills, gazing out the window of his corner office.

"You're not one of the lifer directors around here; you've actually worked for other companies and seen other ways of doing things. I don't think change scares you," he continued. "I also like some of the processes you put in place with the data warehouse team. You've managed to get the job done and your people actually like you. That doesn't happen all the time. And besides, you've won the respect of practically everybody in the business by pulling off that data warehouse project, which had been going nowhere until you got here."

And that's how I found myself at the SLT staff meeting listening to Mills explain to the rest of the directors that, "Ted is going to be the point-man for our alignment initiatives."

All of a sudden, I was no longer the director in charge of data warehousing and data mining, but the newly minted Director of Business Alignment and Planning.

No staff, no plan, no budget, and only a vague idea of how to put the CIO's words into execution.

"I'm calling this the IS/Business Alignment Project," said Mills to the assembled SLT. "The project's main goal is to improve our credibility as a full-fledged business partner here at HomeWorks. I intend to prove to everyone that we can add value to this company. Not just spend money!"

Vowing to rebuild IS "from the ground up, if necessary," he seemed to almost dare anyone to question him. No one did. At least not yet — they were biding their time.

As Mills began outlining his plan to my fellow directors, I began thinking of what lay ahead for me.

The Reasons for Change

It happens in a lot of organizations — IT is often viewed as the "redheaded stepchild" of the company. A good CIO and IT team will work to change that paradigm, to show IT can be trusted with its budget, can deliver ROI, and can in fact be seen as an integral player within the company.

IT-business alignment projects often start when a new CIO comes on board. These days, a new CIO in a progressive company can expect to have business alignment as one of his primary success factors. At HomeWorks, Mills' compensation plan is in part based on how effectively he aligns his department with the business.

Most business executives have come to realize that their business success is tied tightly to technology. The days when an IT organization could be seen as just those "guys who print the checks and run the telephones" are long gone. A few years ago, a company could get away with having just a small IT team. In fact, as recently as the mid-1990s, HomeWorks didn't deploy PCs to more than a handful of employees. And if the main merchandising applications were down for a few hours or once in a while for a whole day, well, people could cope. The business would continue.

How times have changed! Today, if the main merchandising systems at HomeWorks aren't up at 5 AM as planned, the phones at the help desk will start ringing off the hook by 5:05 AM. Now even the data warehouse is considered a mission-critical system. HomeWorks, like most other companies, wouldn't stay in business very long without a significant investment in reliable IT systems.

That's why many IT organizations are viewed as critical to the company now, and that's the main reason why CIOs have moved up to the same level of responsibility as the other C-level leaders. That is, they report to the CEO and no longer the CFO!

Best Intentions

Unfortunately, while the technology has become critical to business success, the structures, processes, and mindsets of too many people in and out of IT have not evolved to match this new reality.