Forget IT-business alignment — it's all about fusion now, CIOs say

Activist IT execs get a say on setting business strategies and driving internal changes

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Integrating management of IT and business activities made sense for TNS, according to Micali. "We need people that are comfortable with a level of change, with taking risks and with being nimble on their feet — and those are traits of IT people," he said. In addition, he noted that IT managers are "very process-driven," making them logical candidates to lead business process transformation efforts.

Conference attendees said that CIOs and other IT executives often also have a unique horizontal view of how their organizations operate, and how changes in one unit could affect other departments. Managers of business units may know the most about their own fiefdoms, "but they never see what [another unit] over there is doing," said Richard Gius, CIO at Atmos Energy Corp. in Dallas.

Cardinal Health Inc. in Dublin, Ohio, recently set up a corporate shared-services organization, giving its CIO responsibility for some aspects of finance and HR in addition to IT, said Dave Hammond, vice president of enterprise IT at the maker of health care software and medical instruments and supplies.

The deeper business involvement extends beyond the CIO level, Hammond added. He said that an IT project manager currently is running an entire office building construction project, not just the technology infrastructure piece of it. And Hammond himself plans to shift into a product development job at Cardinal Health. "I think we in IT have a lot to offer on the product innovation side," he said. "We can come in and say what can work technically."

There are some prerequisites for IT executives, though. Micali said that CIOs need to learn the business at their companies, or else "no one will respect any ideas that you bring to the table." They also have to make sure that their own IT houses are in order, he added, noting that he had to fix some IT infrastructure issues at TNS North America before looking to influence changes in other units.

It also pays for CIOs to be politically astute. Jeffrey Steinhorn, who currently is CIO for the marketing and refining operations at Hess, said that in developing a new IT strategic plan shortly after joining the company, he started by meeting one-on-one with several business executives to float ideas about internal changes.

That grass-roots effort was more effective than "coming out kind of with my guns blazing," said Steinhorn, who has been tapped to replace Walton as corporate CIO at Hess. "It became their strategy, and not mine. It made it a nonevent to present the plan to the rest of the executive committee."

Knowing when to push and when to back off is crucial as well, said Golden Gate's Hill. "The organization has to want to change," he noted. "You can influence, you can cajole" — but if business executives strongly resist your ideas, it might be time to retreat.

With added influence comes added responsibility, and a bigger potential downside for CIOs.

In the past, when reducing internal costs was IT's primary purpose, "the optimal CIO job was invisible," said Douglas Merrill, CIO and vice president of engineering at Google Inc. But now, Merrill added, "the distinction between technology and business is antediluvian — it's gone. The good thing is it gives us more power [within companies]. The bad thing is that if we screw up, we take our companies with us."

But Gius said that he and other CIOs are learning to live with the risks. When large ERP installations went awry, many IT executives "ran for the hills" and said they were business projects, not IT initiatives, Gius said. "But now you're seeing CIOs become a little more emboldened," he added. "I think we're stepping up."

Copyright © 2008 IDG Communications, Inc.

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