What CIOs Can do to Make Business Appreciate IT

If your eyes are glazing over at the thought of another business-IT alignment story, it’s time to pay attention. The fact is getting business and IT to align is more than just a nice-to-have. It can make the real difference between the success and failure of an IT project — and sometimes of a company like this example from Sarv Devaraj and Rajiv Kohli’s book The IT Payoff. (edited for brevity)

Close Call was in the business of telemarketing and catalog sales. The CEO wanted to implement a data warehouse that would fully integrate various call centers. However, he believed that getting the data warehouse up and running in 3-4 months was just a matter of “getting the right people for the job”. The information system (IS) department was already stretched and therefore outside help was sought. The expectations, with regard to resources and time required, were very unrealistic. The project team spent three times its slated budget and half of Close Call’s IS staff quit after the project. The company’s stock price lost more than two-thirds of its value during the period. The reason for the failure, as stated by a consultant for Close Call, was because they attempted too many technology projects at the same time, a case of biting off more than they could chew. The lesson, in this case, is to set realistic expectations of IT implementations.

If you want to avoid that fate, start with this:

Explain Benefits Clearly
Unrealistic expectations often result when the business hasn’t understood the scales used to measure value. Here’s how that worked for one CIO. “When we implemented an ERP solution the vendor had promised things like inventory and cycle-time reduction and productivity improvements in vague terms such that the CEO expected manpower to be reduced by 10 percent,” recalls H. Krishnan, assistant VP-IT, Indian Rayon (A Unit of Aditya Birla Nuvo). “We had to temper those expectations because although manpower count may not be affected directly, the same manpower can easily scale up production, and consequent transaction by 25- 30 percent without additional costs.”

Sponsors a Key Driver
To ensure that IT projects are run as business projects at Idea Cellular, AVP-IT, Deepak Kulkarni, formed a core team of four people for each project comprising a CXO-level business sponsor, an expert from the business, a vendor project manager and an IT SPOC (single point of contact) who acts as a mediator between the business and technology folks. He tells you why, “The role of this team is to first set the direction to the project, and ensure that milestones are tracked. The business sponsor acts as the primary driver of the project.” But he’s quick to add, “Before the CIO can make such demands from the business, he has to establish his team’s credentials.”

Keep Business Informed
Running a business is like a dance: it’s nice when it’s synchronized. At healthcare outsourcing services provider Ajuba, T. Jaganathan, director-technology, and his team have a monthly tech-ops meeting. Every second Monday, managers from IT and the business sit together and thrash out issues of concern. Action items arising out of these meetings are closely tracked. IT then circulates a monthly executive report to every business leader with details of proposed new IT initiatives apart from a performance report in terms of issues faced and support metrics, among others. “Business must give sufficient notice to IT for any requirements. IT has a lot of external dependencies which the business needs to appreciate,” Jaganathan says.