Interview: Align business and IT

An interview with Forbes (link resides outside of ibm.com) IT columnist Michael Schaffner sheds light on the progress of IT and business alignment, the shifting roles of IT and IT managers and findings of the 2009 IBM Global CIO Study.

In a smarter, more digitized world business and IT have to collaborate and align to achieve success. But how far have we come in achieving IT-business alignment?

CIO’s State of the CIO 2010 study indicates (link resides outside of ibm.com) – pretty far. “While aligning IT initiatives with business goals continues to be the most frequently cited CIO activity in our survey, fewer CIOs than in previous years place it among the activities taking up most of their time.” According to one CIO “that's because progressive CIOs have made such headway in the past few years that they can turn attention elsewhere.”

Perhaps, but IT and business alignment is still activity number one and according to one CIO in the 2009 IBM Global CIO Study, IT performance in the past year will be judged by “the capability to evolve the IT organization to better align with enterprise strategy.”

As an IT columnist, IT Director at the Valves and Measurement Group of Cameron International in Houston, Texas and the author of the Beyond Blinking Lights and Acronyms (link resides outside of ibm.com), Michael discusses the role of IT managers and gauges the progress of IT and business alignment. And, as you’ll see, many of his points ‘align’ with the 2009 IBM Global Study.

Let’s start with what we mean by IT manager – when you hear that title, Mike, what comes to mind?

Well, it’s hard to pin down after the term has been around for so long. I think that one of the interesting aspects is the word manager. I’ve often heard it said that what is needed is leaders, not managers. I think that’s an important distinction where a manager is more of an administrator and historically a lot of people in IT have operated that way. I’m glad to see that is changing. IT is being more proactive, participating in the business, contributing ideas, rolling out new things, rather than just administrating the PCs and systems and saying no you can’t do this.

Does that change mean a more a strategic role for IT?

I think so, and I think that’s part of the challenge for IT. In the past IT’s role was centered on efficiency. Help me do my job faster. Now it’s shifting to: Help me do new jobs. Help me do my job in a new way. Help me reach new markets, make new products. These types of things hadn’t been there before – so it’s changing. We need to get out of the mindset of simply improving efficiency.

What about the perception of IT held by those not in IT, is that changing, too?

I think that depends on the organizations and their IT staff. I also think a change in the perception of IT is generational. IT isn’t that old. It wasn’t that long ago that CEOs and vice presidents had their administrative assistants print out their e-mails so they could read them. They weren’t that comfortable with technology. Now senior management is more tech savvy. So they are starting intrinsically to understand the potential. Along with that, the same evolution is happening with the IT leadership. So the evolution is occurring in both business and IT and so the enterprise views the role of IT as a more strategic partner than ever.

How do you see that being manifested?

I don’t have any hard statistics, but I keep hearing that the number of CIOs reporting to CEOs vs CFOs is shifting more towards the CEOs, which I think is a good thing. Now, I’m not knocking CFOs. Some of my best friends are CFOs, but their mind set is on what happened in the past and reducing cost, whereas the real benefit of IT – and I’m not saying that IT shouldn’t run efficiently and help reduce costs – but that it’s real value may be as an investment in the future. So to some extent, having IT report into the CFO is sort of a mismatch.

So another way of looking at that is to ask -- if I sent everybody in the IT department home today, what would happen? As opposed to sending everybody home from the HR department or the legal department and so on. I think most people would say that the impact of shutting down one department for a day is more significant than other departments that typically report to the CEO. Who has the most potential to contribute to the future growth and well being of the company? Where will that come from? And so it’s not that any department is more important than any other. It’s a way of examining where IT should report.

Do you think the people in IT feel recognized for their contributions?

Again I think that varies depending upon the IT department and the organization. Google or Amazon, for example, would understand that IT is very integral to what they do, which may not be the case for say a manufacturing company or department store. So it varies from organization to organization, and I think that it depends on the leadership of the IT and business groups within those companies. And it depends on how much they are actually using IT, for some it’s leading the way and for others it might be bringing up the rear.

Have you noted any shifts in behavior when IT interacts with non-IT departments?

I work with a lot of various teams and it’s not just one-to-one. It’s not just IT and sales. It’s IT and sales and marketing and HR and finance, so it’s more of a team effort all across the board. I think people are realizing that if you make system changes the impact is felt in other parts of the business. There could be a lot of HR issues involved in making changes to a system or an impact on sales or finance. So I think we’re seeing a lot more inter-departmental interaction overall, not just with IT.

IBM has been pointing out that the planet is getting smarter – more instrumented, interconnected and intelligent. Does a smarter planet put more pressure on the role of IT?

Sure, there are privacy issues and security issues, and a lot of data management issues. I think a way to judge if we are smarter is to ask if we are making better decisions. Or are we just making bad decisions faster?

We collect tons and tons of data, but then the issue becomes do we have the skills and the tools to mine it and analyze it and figure out the right elements to answer the key questions. It can’t just be, I found a couple data points and I’ll go with that. How do we know what the data is telling us is good – just being in the computer doesn’t mean it’s right. And that’s something that IT hasn’t done a good enough job of – error proofing the systems to ensure that data is entered right the first time. And if it’s wrong, how do we correct it or change it and keep it up to date? And it’s important because the amount of data out there is just growing and growing and growing.

Does a smarter planet mean more opportunity for IT?

Yes and to me the biggest opportunity is with collaboration and companies’ sharing data and how it contributes to taking waste out of a system. You and your vendor and your customer can now be connected and make the whole supply chain more efficient, rather than just individual pieces. The potential there is fantastic. This kind of strategic collaboration creates more of a partnership across supply chains where it used to be in silos and everything was a hand off. We want to work with our customers and suppliers to manage both their inventories and our inventories so that it’s a win-win, rather than each of us reacting to what we think the inventory levels should be, but neither of us really know, so we both end up with the wrong inventory levels.

What one key factor do you see contributing to business and IT alignment in the future?

Success. As you start seeing more and more success stories of where alignment occurs and projects that have proven valuable, it’s going to grow and create even more opportunity for alignment. People start seeing these successes and I think IT will get drawn more into working with the business and across the organization.

Thanks for your time Mike.

My pleasure. It’s been good talking with you.