Aligning I.T. and BusinessBy John McCormick | Posted 2007-08-07 Email Print
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Recent reports show that most business leaders and tech execs still aren't on the same page. John McCormick, editor-in-chief of Baseline and CIO Insight, tells how they can better align their goals and strategies.
Alignment is the central topic of this month's Topline section, but a bunch of reports out in the past few weeks illustrates just how far apart the business and I.T. groups can be at times.
First, the fact that business-I.T. alignment can be a profitable endeavor has never been more evident. The Business Technology Management Institute, a research think tank, released a study on the benefits of business-I.T. "convergence" and found that enterprises with extremely high levels of business-technology alignment see a number of quantifiable benefits relative to their industry group: 12% average annual revenue growth versus 4% for their industry group; 36% average annual earnings per share growth versus 7% for their industry group; 6% higher earnings before interest, taxes, depreciation and amortization (EBITDA) margins than those delivered by their industry group; 4% average higher return on equity; 8% average higher return on assets; and 14% greater return on investment.
But aligning business and I.T. is more than just about developing complementary strategies; it is also about making sure people are in sync. And here there seems to be a disconnect.
An IDC study, just out, found that business managers were quite pleased with the jobs their I.T. managers were doing—that they had a clear idea of how information resources could be used to support corporate objectives. "Business managers are quite satisfied with their CIOs," said the IDC report.
But another report found that I.T. managers don't feel that way about their own situations. ExecuNet, an executive search firm, released a survey of executive job-satisfaction levels and found that of all the managers polled—including sales, human-resources and other supervisors—I.T. executives were the least satisfied with their lot. In fact, less than half—41%—of I.T. execs said they were content in their careers.
Dave Opton, CEO and founder of ExecuNet, told eWeek, which ran the report, that C-level executives usually leave one job for another because they want to be someplace where their opinions are heard, and I.T. chiefs are no different. According to Opton, I.T. execs also find themselves squeezed between groups within their companies making different demands, and often find bridge-building difficult.
"In the I.T. world, what stands apart is, first of all, they're in a uniquely difficult sandwich situation, and what I mean by this is that you're talking about people that in order for them to do their jobs, they need to be extremely technically competent," Opton told eWeek. "They need to translate the needs of their internal customers, their users, and sometimes that happens and sometimes that doesn't. The users don't speak that technical language and it puts a person like a CIO or senior-level developer in a tough situation." And as eWeek noted, when a big project goes bad, or a technology supplier doesn't come through, the CIO is often the first person kicked out the door.
But is this any way to maintain a motivated and loyal workforce?
Another study out last month, this one by the Hackett Group, found that typical Fortune 500 companies that excel at talent management—finding and nurturing good employees—can generate a nearly 15% improvement in EBITDA.
"The best companies treat employees the same way they treat their business lines, as something to be carefully analyzed and strategically developed in support of their business goals," Hackett HR practice leader Stephen Joyce said in a statement that accompanied the release of the report. "They determine the skills, competencies and experiences needed to run their company over the next few years, quantify the gap between their needs and their current resources, then acquire the expertise they need through a combination of staff development and hiring."
We've been talking about business-I.T. alignment for years. But what is often overlooked is the relationship between the corporate staff and the tech professionals. But maybe alignment wouldn't be such a struggle if business leaders were a little more in touch with the aspirations, expectations and overall welfare of their tech teams.