No 'Silver Bullet' for IT/Business Alignment

Ann All

Ann All spoke with Jerry Luftman, program director of the Master of Science in Information Systems (MSIS) program at the Wesley J. Howe School of Technology Management, Stevens Institute of Technology. He is also vice president of the Society for Information Management, a network for IT leaders comprised of over 3,000 members including CIOs, senior IT executives, prominent academicians, consultants and other IT leaders. SIM recently released a poll of its members that covered top CIO concerns, among numerous other topics.


All: Despite several years of talk, and ostensibly action, to improve alignment between IT and the business, SIM's survey found it was the number-one concern of IT executives. Any ideas as to why it continues to vex execs?
Luftman: One would think after 25 years that some smart academician, consultant or practitioner would have come up with something to identify how to move [IT/business alignment] a little bit lower on the list. It's getting better, but it is still the number-one problem. Why? It's likely everybody is looking for a silver bullet. For years and years, people thought having the right technology would improve the relationship between IT and the business. Technology alone wasn't going to hack it, so then people started to look at how IT and the business can communicate more effectively with each other, where you try get IT people to understand the business a little more and get business people to better understand IT.

Then we evolved to the partnership concept, trying to improve the partnership that exists between the different cultures. That alone didn't do it. Then people started looking at the governance process: how and who makes the decisions about how much to invest in IT, what projects to do, what projects not to do. More recently, the fifth area is looking at how IT demonstrates the value contribution to the business. And now there is this human resource activity, ensuring that you have the appropriate skill base. My concern has been that over the years, you get consultants or others who focus on one or two of these things. It's not one thing or two things or three things, but all six of these areas.


All: Web services, business intelligence and security technologies all ranked ahead of business process management as the top areas tapped by IT execs for improvement and development between 2005 and 2006. Do you think this is a cause for concern?
Luftman: Business process reengineering prior to this year was on the list of top IT management concerns. Interestingly enough, this year it moved off the top 10 [management concerns] but it moved on to the list of top application and technology areas. My concern stems from what is likely going on: IT people and business people are looking at it as a technology thing, and not a business thing. That's absolutely not what should be happening. It ought to be in both places, and certainly more prominent as a business concern. If you have all this wonderful technology, it's not going to do anything if the business doesn't get engaged in changing its processes to take advantage of all this technology. If you have inefficient processes and you throw the latest and greatest technology at them, you'll have a large IT bill but you won't have any value.


All: Only 16 percent of survey respondents reported having a federated IT function, partially centralized and partially embedded within business units. Why is this number so low, and again, is it a cause for concern?
Luftman: To me, the most effective organization structure is to have some people working within the business organization and others in the central organization, with the central organization taking care of infrastructure and common systems and the distributed function focusing more on unique applications and services for respective business units. The good news is, the number of decentralized organizations is declining. But I have been disappointed with the numbers of federated or hybrid organizations, which have remained relatively stagnant.

I think this stems from several different areas. A lot of IT executives with the centralized organization are hesitant to move to a federated model because they will have a smaller number of people reporting to them. Our culture is still one that is driven by the number of people who report to you. That shouldn't be the case; it should be the power of the contribution your organization makes to the firm. So I think there are people who are hesitant to reduce their staff to get IT closer to the business.
The second concern is, many business people don't want to have IT reporting to them. They think having geeks report to them is a problem they don't want to have. Again, this is indicative of the bigger problems of culture and communications, where business people don't believe IT people can work closely with them.

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