An IT shop that's out of step with its business's strategy faces the risk of being outsourced. However, 80 per cent of Global 2000 enterprises will fail at merging their IT and business strategies by 2004, according to analysts.
Peter Hind, InTep program manager at IDC (InTep is a forum of IT managers and CIOs) said organisations that keep IT as a back-room activity are taking a "Dickensian" approach to business.
"With some organisations you just know that IT is a back-room activity and others you can tell it's part of the business," he said.
Hind said the challenge in merging IT is not being brought into loop by business people, so CIOs have to second-guess what the business is doing.
"It's a difficult process, and I don't see many [businesses] doing IT planning. There's a 'flying by seat of pants' approach to business at the moment. It's difficult to provide an IT business plan when the business doesn't know what it will be doing in six months time," Hind said.
Most organisations are focusing on the short-term during a period of cost cutting, Hind said, stemming long-term views.
"But this approach can only go so far," he said.
"When I talk to CIOs I get strong sense of their desire to be more relevant to the business. I don't [meet pure] technocrats any more. CIOs appreciate the value of the business or there's no value in IT.
"A challenge for CIOs is they have a long legacy to overcome," he said. "A lot of the time [CIOs] are looked at as technicians."
Meta Group managing director for Asia-Pacific region, Paul Ventura said CIOs should avoid the backroom image and demonstrate an inherent knowledge of the business "otherwise they are setting themselves up to be outsourced".
The research group says the main problem with merging IT and business planning is a growing time lag between an external event's occurrence and availability of an IT service designed to leverage such events.
Ventura added that the period for ROI has also been reduced. While a typical period for ROI was 18 months to two years only a few years ago this period, since March 2000, has reduced to about six months as more companies want quicker ROI.
IT manager for Brokenwood Wines, Rebecca McIntyre, said those businesses that do relegate IT to the back room will be left behind. Within the Brokenwood company, IT is viewed as a strategic partner.
"It's a necessary evil, to be up to date with everything these days," McIntyre said.
"[Aligning IT to the business] is one of the top priorities for us. We're a production company and our top priority is producing quality wine. IT is important to us. I'd say we're probably about two years planned at the moment; in terms of equipment, we're up to date for the next year," she said.