The magic of IT and business alignment for SMBs |
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By Sue Hildreth, Contributor
02 Mar 2005 | SearchSMB.com |
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IT and business alignment is a popular concept in management circles. But what does it really mean to SMBs? In this two-part series, SearchSMB.com looks first at what IT managers can do to get respect and understanding from their business executives. In part two, we'll address how business owners and CEOs can ensure that IT understands its impact on business processes and the bottom line.
Alba Aleman, president of Cairo Corp., a 90-person IT integration firm in Chantilly, Va., has some advice for IT managers feeling left out of strategic planning at their companies.
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Is your company in line? |
Experts say to look for these warning signs that your IT and business goals are not aligned.
1.) Business managers express dissatisfaction with IT.
2.) IT is forever putting out fires.
3.) Lots of bureaucratic processes -- more process than results.
4.) The top IT manager is three positions down from the company's leader. |
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"Think of problems that keep the owners up at night and come up with solutions that may, or may not, involve technology," she said. Aleman expects her IT director to offer feedback on all aspects of the business and not just on IT issues.
For Aleman, that is the essence of IT and business alignment at Cairo Corp. Unfortunately, not all SMBs believe that the notion of IT/business alignment really applies to them. After all, in a small organization, where everyone knows everyone else, won't IT and business goals naturally be aligned?
Not likely. Or not always. Experts say that small firms do have an advantage, in that knowledge sharing is easier -- simply due to the size of the enterprise. But that provides no guarantee that IT teams are working with business goals in mind. And as the organization grows, the odds of misalignment grow, causing business managers to become dissatisfied with IT, and IT to be unhappy at its perceived lack of respect and involvement in strategy.
Victor Janulaitis, CEO of Janco Associates, an IT management consulting firm, urges IT managers to take the initiative in bridging the IT/business gap and work harder to understand the business activities of their organizations. "One of most successful CIOs I know goes to work in the front lines of any new company he joins. If it's a distribution organization, he goes to work in a distribution warehouse," he said. "IT needs to do more cross breeding like that."
Getting from IT department to strategic department
In many small organizations, it's not unusual to find IT staff working on projects that have nothing really to do with strategic goals. For instance, IT might spend time patching up an old printer that isn't urgently needed, rather than working on that e-commerce Web site feature that might really boost online sales.
So, who's to blame? That question is not so easy to answer. However, it's generally considered the responsibility of IT managers to argue for -- and allocate -- resources. It's IT managers who need to make sure IT teams are working to support key business goals -- and not wasting time on low-level tasks.
At Cairo Corp., all IT initiatives stem from business objectives articulated at the beginning of the year. "We do not engage in projects -- IT or otherwise -- that do not originate with a business goal," Aleman said.
Michael May, IT operations manager at Central Computer Corp., in Mansfield, Nottinghamshire, England, said IT often is synonymous with "tech support" in the minds of business managers. One thing IT managers can do to prevent this is develop estimates on the cost of not having key IT resources. That will help underscore the value of IT.
"It's hard to articulate in a meaningful way what a technology investment or set of investments are going to produce in terms of business value," said Bill Johnston, president of IT consulting firm Alinean. "So what happens in most organizations is the CFO says, 'OK, if you can't prove your case, we're not going to fund the capital you want.' So budgets have dried up due to this inability to measure and communicate business value."
The key, Johnston said, is looking at the business ROI that an IT effort creates -- not cost of ownership and not intangible benefits.
"It's the understanding what technology investments are meant to produce in terms of contributions to the business. That doesn't mean focusing simply on cost of ownership or the relative functionality of an investment, but actually connecting those to what the organization is trying to achieve from a business standpoint."
Sue Hildreth is a freelance writer and editor based in Waltham, Mass. She can be reached at Sue.Hildreth@comcast.net
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