There are many times when I’m on consulting engagements when I ask CIOs, “How much of an understanding do you and your management have about how your company makes money, thereby having a staff that knows where the money comes from and where it goes?” One of the scariest responses that I have had to that question was, “Why would I want to do this? I don’t have enough time to do what I need to do now.” My answer to that scary response is that by doing this, you will accomplish the task of having an IT organization that knows how to see opportunities to differentiate the company from the competition.
What most CIOs still don’t understand is that the key here is to get beyond the old cliché of IT-Business alignment and move to IT-Business integration. IT-Business alignment implies that IT is separate from the business, whereas IT-Business integration is the effort to integrate IT into the business decision process to a higher degree. To accomplish that integration, everyone in IT has to learn how the business makes money and how to use that information to generate new innovations and revenue opportunities. By understanding this concept, you can increase IT’s value to the organization.
Now, I know that not every person in IT will have the bandwidth to pay attention, but they should. In most organizations I’ve been to, initially the staff has always been “heads down,” and the IT organization has been content to just be the providers to the business. Even today, that is still prevalent. We all know that we are working in a whole new world of business, and if IT still wants a seat at the strategic table, it has to figure out how to speak the language of business. Now, there is a flip side to that statement: “Business needs to understand IT as well. Giving the business a glimpse into IT would hopefully show the business how IT is understaffed, under-budgeted, and under pressure to keep the lights on and to be innovative.” I agree, but if we work to integrate ourselves, we won’t have to try to get business to understand IT. I want us to shoot for a higher level of understanding here and realize that this is a symbiotic relationship.
In previous client engagements, I’ve spoken about ways to accomplish IT-Business integration. In the engagement/project kickoff meetings, I state that in order to achieve this type of “IT-Nirvana,” you have to think like the CEO and CFO. I will guarantee you that at the top of every CEO’s and CFO’s mind is the fact that for every dollar coming in the front door, a portion is going out the back in the form of costs. If you take time and study that equation, you can discover ways to save and generate revenue.
I also advise my clients to think ahead. Ask yourself not just how IT contributes to today’s business model, but how that will change in the future. This really gets folks thinking on a different level—strategically instead of tactically.
At one large customer, I asked the SVP of IT if he could invite the CFO into one of the department meetings. My reason for doing this was to have a focused conversation around the “bottom line” with the staff. The importance of the “bottom line” discussion with his team was to share how the company earns revenue, where the profit goes, and where excess cash may be invested. After the meeting, the SVP told me that this information would be invaluable in helping focus his managers’ thought processes around innovation. I told him that that was the point. I added that if you understand areas where the company is growing, you can potentially come up with new ideas or different ways to do things that will bring a competitive advantage. These ideas may range from a function on a website to improvements in customer service to changes in internal processes, and more.
At another client engagement where I was in place to assist with the development of a strategic IT plan, I noticed that there was a lot of disconnect between IT and the business. During my interview process, I asked whether anyone could describe to me the corporate mission, corporate values, and top priorities. Hardly anyone I spoke to could. That brings me to my second way to help with IT-Business integration: put in place an extensive orientation for all new employees, from entry level employees to seasoned industry veterans.
These extensive orientations will help teach new employees about the company’s mission, its priorities, and its business practices. They will also learn how IT is organized and run, as well as the ways in which IT interacts with the business to understand its needs and priorities and then translate these into IT initiatives.
I have also recommended having management and executives blog and send memos periodically. On the flip side, I suggested to IT management that they make it a policy for employees to attend company update meetings that cover strategy and competitive position, along with listening in on quarterly corporate earnings calls. The time spent on these calls is beneficial since there is usually a lot of talk about performance and key plans.
The last way that you can move into more IT-Business integration is to map IT functions to business processes. In another engagement, I was in the section of my project that involved the help desk. Here is where I saw a huge disconnect. The company relies heavily on IT to produce its products; customer-facing applications are tightly integrated with the ERP and manufacturing systems. But what I saw during my time sitting at the help desk was that they didn’t understand how all of the systems and manufacturing machines were integrated to scan and manufacture this product, which was a highly intricate process.
One example I made a note of was that when a business user called in with a scanning problem, the help desk didn’t necessarily know which part of the process was not working. The same was true for the systems administrator who would see working machines, but no problem with a file transfer application being able to find the right file.
In my review of the day, I decided that the solution to better IT support and a less stressed-out help desk manager lay in fostering a more integrated view of business processes and IT operations. In my final report to executive management, I suggested that as a start, they send as many employees as possible out to the manufacturing sites to learn about the equipment and systems they were servicing from the user’s point of view and to document that business-centric view.
As part of this engagement, I worked with the management staff to map out the company’s business processes to each application and the machines they ran on, showing how each was connected to the others. This map was a powerful illustration of how the employees who create and service each system contribute to their company’s top line. It also worked as a tool to show which systems impact revenue the most and which processes needed infrastructure improvements. Today, I’m pretty sure they still use the map as a training tool for new employees in IT to help them understand high-level business process and systems flow.
Building an understanding of the relationship between how the business makes money and the work it does every day helps the engineers to appreciate the purpose behind their jobs and to have a perspective and an appreciation of the business users’ requests. This in turn helps create better partnerships with the business users and furthers the movement to IT-Business integration.