Computerworld - Who's Driving IT Alignment? Conventional wisdom holds that CIOs should make sure IT spending is properly aligned with business strategies, and if it isn't, then it's the CIO's fault. But that thinking is actually an impediment to real IT/business alignment, says Gopal Kapur, president of the Center for Project Management in San Ramon, Calif. "The precept that IT should align itself with business is a crock. That's like saying that a trailer should align itself with a truck. Just imagine a parking lot full of trailers in search of a hitch on a truck." In other words, corporate executives (the drivers in the truck cab) should be making sure the IT organization (the trailer) follows along, Kapur says. "The role of the IT organization is to have the right solution to the business problem, not to decide what really needs to be done," he adds. The problem is that senior executives have abdicated their responsibility to clearly articulate corporate goals and make sure IT expenditures contribute to those goals, Kapur says. "They give the CIO millions of dollars and don't ask how it's being spent and then complain that IT isn't in alignment. Whose fault is that?" Using a different analogy, Kapur says an investor may have a financial adviser who implements the transactions, but the investor should still know how much money is being put where and establish investment thresholds.
Best Bits The most useful parts of recent business and IT management books The book:Services Blueprint: Roadmap for Execution, by Ravi Kalakota and Marcia Robinson (Addison-Wesley, 2003). Take today's buzzwords—e-business, Web portals, the real-time enterprise, adaptive supply chains, enterprise application integration and Web services—throw them into a blender, and you've got one big megatrend, the authors argue. "This wide-ranging transformation is the use of technology to digitize complex services," they say, citing well-known IT success stories at companies such as General Electric Co., Dell Inc., Southwest Airlines Co. and Amazon.com Inc.
The services blueprint the title refers to begins with a single overriding business goal, or "focal point," like being easy to do business with (known in this book by the acronym ETDBW). Then, all technology investments are supposed to play a role in achieving that goal. The winners in "services digitization" will also have superb execution. The best example of single-minded focus and superb execution has got to be Wal-Mart Stores Inc., a company so successful that it now constitutes almost 2% of the U.S. economy. Wal-Mart's focal point? "Every day low prices" (known as, you guessed it, EDLP). The whole point of Wal-Mart's extensive technology and supply-chain empire—from the data warehouse to the store replenishment systems—is the relentless pursuit of that goal of, um, EDLP.
Things to Ponder
Given the controversy over whether computers really increase productivity, a recent Goldman Sachs & Co. report sniffed that the debate seems academic. "A practical test would be to take them away and return to paper ledgers, green eyeshades and typewriters and see what happens."
A Gartner Inc. survey of 113 senior executives in Europe found that most of them view CIOs as risk-averse, not very influential on strategic matters and not long-term thinkers. Furthermore, most of these executives think their IT departments are poorly prepared for the future.
Corporations are ramping up their efforts to comply with the Sarbanes-Oxley Act, but they aren't spending big bucks on more IT applications and systems. A poll conducted by Meta Group Inc. found that 57% of IT vendors have been disappointed by the lack of sales being generated by Sarbanes-Oxley initiatives.
The IT Economy
Talk about a jobless recovery! The U.S. economy added a paltry 1,000 full-time jobs in December, a tiny fraction of the 150,000 that economists expected. The reasons are many and complex. Higher health insurance costs discourage hiring. Employees are working longer hours. More work is being done by temporary workers and outsourcing contractors. Government figures show that 300,000 unemployed people simply stopped looking for a job. And companies are investing in labor-saving technology. Rohm & Haas Co., for example, announced Dec. 18 that it will eliminate 550 jobs because of efficiencies from its new global ERP system.
You've heard about the CIO surveys that predict IT spending will increase from 1% to 6% this year (depending on the survey). But what do chief financial officers say? Surprisingly, in a poll conducted by Financial Executives International and Duke University, 263 CFOs said that technology spending will increase 6% this year.
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