CIOs worry a lot about aligning IT and business goals -- maybe too much, according to recent research from Bain & Company.
A lack of IT/business alignment topped the list of worries for CIOs responding to a Society for Information Management survey in late 2006. Alignment has been so elusive for companies that Forrester Research recently suggested that they might want totry instead for business technology synchronization.
And now Bain & Company cautions CIOs that putting alignment before efficiency is the tech management equivalent of rolling out the cart before the horse. The head of Bain's global IT practice tells CIO Insight that companies seeking alignment often allot IT resources to different business units -- which typically drives up complexity, costs and inefficiencies.
A whopping 74 percent of respondents to a Bain survey considered their IT operations both ineffective and not in alignment with the business. Their IT spending rose 1.3 percent while three-year compound annual growth rate dropped by 3 percent.
CAGR jumped 37 percent for the 7 percent of firms who reported achieving both effective operations and IT/business alignment, while IT spending fell 10 percent. The 8 percent of companies that considered themselves effective yet not in alignment still managed to cut IT spending by 17 percent and increase growth by 10 percent.
The worst performers were the 11 percent of companies that considered their IT operations in alignment with the business yet not effective. Spending grew 8.4 percent, while growth declined by nearly 10 percent.
Put effectiveness before alignment, Bain advises tech execs.