FRAMINGHAM (04/10/2000) - It's 7:30 a.m., the finale of a two-day executive meeting at Marriott International Inc.'s conference center in Chantilly, Virginia. Carl Wilson is fielding questions from 20 of Marriott's top-volume business customers during the hotel chain's quarterly relationship-building meeting. Questions like "How could you make us more successful in our jobs as travel managers?" and "How could we work better with your supply-distribution pipeline?"
For Wilson, Marriott's executive vice president and CIO, it's just another day in the company's executive sandbox. "I attend meetings for a living," he says with a laugh. But his real reason for attending this retreat? "It's good to help shape the strategy to service our customers better."
Wilson's presence at these meetings is part of Marriott's three-year push to align its information technology group, called Information Resources (IR), with corporate strategy. And it's working so well that, because of improvements to its customer service applications, Marriott in February earned recognition from Fortune magazine as the "most admired company in the lodging industry."
Three years ago, Marriott's president and chief operating officer, William Shaw, recognized the need for more strategic IT-business alignment and acted.
He hired a senior vice president of planning for Information Resources and invited the CIO into the boardroom.
Today, the business dictates every technology decision, and IR is part of the process. Thus, by erasing the lines between business and IT, Marriott has embraced what analysts say will be the key to maintaining a competitive edge in the 21st century.
"If I don't have a strategic relationship with my business partners to identify problems and opportunities to leverage information technology, then I'm bleeding critical lifeblood out of the company," says Jerry Luftman, executive director for the graduate information systems programs at Stevens Institute of Technology in Hoboken, New Jersey.
If your IT organization isn't represented in the boardroom like it is at Marriott, it's probably because you're not walking the business walk and talking the business talk of value, revenue and process. But by following basic stepping-stones - getting to know your business, communicating a business message and participating in planning meetings - you can bridge that gap.
Step 1: Communicate
It starts with communication, but not the type of techno-dialogue that makes an executive's eyes glaze over. Instead, IT executives need to look at the enablers and inhibitors of each IT project. Then, they need to better market their ideas in language that business executives are comfortable with, explains Luftman.
Wilson calls this "taking the mystique out of IT delivery." Corporate executives know their business, which traditionally hasn't been technology. But now business applications, network infrastructures and the Internet are as strategic to their business as a good marketing plan. Corporate leadership is recognizing this, but executives have to get up to technical snuff.
Barry Shuler, Marriott's senior vice president of strategy and planning for IR, has helped to technically season Marriott's executives by speaking in analogies and "what if" scenarios and using profit-and-loss charts. For example, because Marriott is on an aggressive acquisition track, it needed a flexible network infrastructure and applications to quickly link new properties. Here's how Shuler, a former race car driver, sold the new network:
"Bill Marriott Jr. [CEO and chairman of the board] owns several exotic cars. He loves talking about cars. I tell him the infrastructure - the hardware and system software connecting the network - [is] like the road," Shuler explains.
"Then I ask him, Why would you want a thousand roads coming to the same place, when you can have one?' I compare our applications to trucks and cars driving on the road. And our Information Resources people are the pit crew."
But it's tough breaking into the boardroom for the first time. To do so, IT executives must often find an ally on the business executive team, advises Luftman.
In Marriott's case, that champion was Shaw, who hired Shuler three years ago to align IT with the business.
"Our customers are increasingly integrating technology into their lives, and it is becoming part of their entire experience with Marriott International - from travel planning on the Internet to high-speed Internet access in their guest rooms," says Shaw. "This makes it critical for Marriott to align its IT strategy with its business strategy."
Step 2: Build a Plan
You also need a plan. To do this, Marriott formed teams of business and IT managers to benchmark existing processes. Then the teams built a "quick-hit" and long-term plan, including resource requirements.
During its benchmarking stage, Marriott found a number of inefficient processes. For example, it hadn't streamlined its value chain. Each hotel bought all of its soaps, shampoos, towels and other consumable goods from its favorite vendors. Because of disparate systems, Marriott was losing out on volume discounts, products went to waste and accountability was spotty.
Marriott also realized it lacked a way to track and improve revenue per customer, among other things.
Once the baseline was complete, Marriott's IR strategy and planning teams developed a strategic time line and architectural plan. To accommodate the rapid transformation and creation of so many needed applications, Marriott first required a more flexible network, which it targeted for its quick-hit list. It also determined that the most efficient way to build out the new applications was with reusable object-based applications that would also change quickly with the business.
"Rather than just go out and get the latest bells and whistles, we decided to invest in techniques and infrastructure today that will allow it to be quick tomorrow," Shuler says. "We are building our application portfolio to serve any user interface that comes down the pike. Today, it's the Web. Tomorrow, a handheld or cell phone."
Marriott now has the new network infrastructure in place, with properties tying into the same procurement and customer relationship management systems.
Step 3: Life-Cycle Governance
Ambitious rollouts like these also spotlight another huge disconnect between IT and business: accountability for project delivery. "Even with some semblance of governance, typically there's no process for performance review and accountability once a project is approved," contends Ryan Schmelz, managing partner at Transition Partners, an IT management consulting firm in Reston, Virginia.
When projects start out with an executive management team, they often fall off the radar, mostly because of changes in the business or executive management turnover, Schmelz adds. This, he says, results in projects that are often funded long after their usefulness or that are left incomplete.
IT projects must be held to the same level of accountability as any business initiative. Schmelz advocates an "accountability ladder" similar to Marriott's model: an executive sponsor at the senior vice president level or higher, and project owners from the business side (generally a department manager) and from IT (a manager). The IT owner also has a direct pipeline to the CIO to bilaterally discuss projects with executive peers.
At Marriott, accountability is shared between business and technology project leads. Each project starts with an executive sponsor, who chairs a steering committee headed by a business project manager, "joined at the hip with an Information Resources project manager," Shuler explains.
Because of this level of inclusion, the technological aspects of new initiatives are fleshed out concurrently with the development of new projects.
This cultivates a more efficient flow of ideas and business development.
"As a business partner, Marriott IT executives participate in all business strategy review meetings," Shaw says. "When Marriott holds a major budget review, we always discuss IT, just as we would discuss finance or human resources. On all major projects, all my direct reports, including Carl Wilson, share major business objectives."
With such accountability, Marriott is now measuring the benefits of IT projects and preparing a system to measure the performance of those applications throughout their life cycles. The company has done a decent job in the past with cost control and project management, but it has had problems quantifying a project's actual benefits. Under the alignment initiative, Marriott is building a proprietary automated system to measure life-cycle performance of projects.
Shuler adds, "We need to monitor these programs continually to see if ... we deliver what we say. This is responsible business."
Step 4: Looking Forward
As benchmarking efforts move ahead, so too do forward-looking initiatives like customer relationship management projects that stretch Marriott's sales force automation tool into a platform for a number of interesting applications, such as prestay sales of golf or spa packages. In the future, guests will even be able to book extra services like these or tweak their itineraries online.
Most of these initiatives are launched by business departments, executive teams and even sales representatives who are excited about the benefits IT can bring to the business. But all this new development has stretched Marriott's IT resources. It has increased the number of people working on IT projects by one-third and boosted IT spending from 5 percent to 15 percent per year since 1996. No longer does IR struggle with ill-defined technology projects or dictate the software development and support for business applications. And there is no longer any distinction between an IT project and a business initiative.
"IT at Marriott is a key component of the products and services that we provide to our customers and guests at our properties," Wilson explains. "As such, there's very little that goes on within the company that either I personally or one of my direct reports is not involved in." wRadcliff is a freelance writer in Northern California. Contact her at DeRad@aol.com.
Owning the Business
"How can IT managers deliver something that is going to change the business when they don't own the business?" asks Jerry Luftman, executive director for the graduate information systems programs at the Stevens Institute of Technology (www.stevens-tech.edu).
If this sounds familiar, follow Luftman's advice:
1. Build a team of IT and business people.
2. Ally yourself with a business executive to champion and sell ideas.
3. Clearly understand the complexities of business.
4. In business language, help business understand IT's complexities.
5. Establish similar rewards and motivations. For example, don't measure IT on costs while measuring business on profits.
6. Manage and monitor all business-IT projects through the life cycles of the applications.