Corporate execs attempt IT, business unit alignment

Although CIOs traditionally rank alignment between IT and business as a top priority, chief financial officers attending a conference last week said that closing the gap often requires new ways of thinking -- or new personalities in management.

For example, Thomas Williams, chief process officer at AT&T, said poor alignment between the company's IT department and business units "was absolutely an issue" until AT&T adopted a portfolio management approach to IT projects in January.

The new technique, which applies the same Buy, Hold or Sell criteria that financial investors use, lets AT&T evaluate whether the more than 100 IT projects in the pipeline at any given time are meeting their business objectives, such as reduced costs or improved customer satisfaction.

That has made it easier for corporate executives to "make conscious decisions on which investments to stop and continue," Williams said. It also has given AT&T "a regular, repeatable process that has teeth to it" for ensuring that IT projects are aligned with business goals, he added.

Alignment remains a challenge at many companies, based on comments by conference attendees and survey results released by Boston-based CFO Publishing Corp., which sponsored the event. Twenty-two of the 50 chief financial officers surveyed cited weak alignment between IT and business strategies at their companies, while two others said there's no alignment at all within their organizations.

The research, which was funded by Novell Inc., is consistent with earlier surveys of between 200 and 300 CFOs, according to Mary Driscoll, president and editorial director of CFO Publishing's events arm. Novell executives discussed the results during a breakfast session and said the findings mapped with challenges being cited by the company's users. But they didn't pitch the use of Novell's software to help bridge the gap.

To help achieve better alignment, Cisco Systems Inc. assigns an IT and business leader to each technology project and makes them jointly responsible for the initiative, said Dennis Powell, the networking vendor's CFO. "We changed our thinking about IT from a cost center to a strategic partner," he said.

Several CFOs said much of the alignment gap is the result of personality conflicts.

Tom Goldstein, CFO at LaSalle Bank Corp. in Chicago, said the relationship between business units and the bank's IT department "wasn't that great" under its previous CIO. But he added that things have improved since current CIO Sam Halim joined the company. "I trust the guy very much, and we share a vision," Goldstein said.

Despite the continuing alignment issues, many attendees were quick to defend CIOs. "Most CFOs CHICAGOwould agree that the alignment problem isn't the fault of IT," said Ian Downes, a consultant at Cap Gemini Ernst & Young U.S. LLC in Rosemont, Ill. "IT departments are inundated with requests and often find themselves in reactive mode."

To help guarantee that projects are synchronized with business needs, Downes recommended that IT staffers work stints in departments such as finance or human resources so they can get a better understanding of how those units work.

Often, Communication Is a Hurdle

"If there's any barrier to success between IT and business, it's communication," said conference attendee Randy MacDonald, executive vice president and CFO at Ameritrade Holding Corp.

And although that statement seems like a truism, MacDonald and two other executives who took part in a panel discussion noted how difficult it can be for CIOs and CFOs to speak each other's language.

MacDonald also served as acting CIO at Omaha-based Ameritrade for about a year until the online brokerage hired Asiff Hirji to be its technology chief six months ago. MacDonald said that during the search process, he was disappointed by the number of CIO candidates "who couldn't talk to total cost of ownership or other (financial) measurements."

Both CIOs and CFOs have to take active roles in ensuring that technology investments hit the mark, he added. If the CIO reports to the finance chief, "then the CFO had better make sure that IT delivers the expected results," MacDonald said.

Randy Stone, CIO at Teradyne Inc., said the Boston-based maker of semiconductor testing equipment makes sure its IT workers understand the company's business strategy. To help in that effort, Teradyne is "reskilling" some IT staffers "to get people better at interacting and working with the businesses," Stone said.

Jones Lang LaSalle Inc. at times has had communication breakdowns between IT and business managers, said Lauralee Martin, executive vice president and CFO at the Chicago-based provider of real estate and investment services.

Communication isn't everything, though. Martin said Jones Lang LaSalle had two CIOs at different times "who could talk a good business game." But they didn't work out "because they weren't technically sound," she said.

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