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Aligning Business and IT in the Enterprise

Aligning Business and IT in the Enterprise an ® IT Management eBook
Aligning Business and IT in the Enterprise an ® IT Management eBook
Aligning Business and IT in the Enterprise an ® IT Management eBook

an

Aligning Business and IT in the Enterprise an ® IT Management eBook

®

IT Management eBook

Contents…

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Aligning Business and IT in the Enterprise

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This content was adapted from Internet.com’s CIO Update Web site. Contributors: Dennis Drogseth, Patty Azzarello, Jerome Oberlton, and Allen Bernard

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It is Time to Think Beyond IT

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CIOs More Focused on Business than Ever

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Mastering the Art of IT/Business Alignment

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Leveraging the Right Resources for Alignment

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Aligning Business and IT in the Enterprise

It is Time to Think Beyond IT

By Dennis Drogseth

M ore than 10 years ago, Enterprise Man- agement Associates (EMA) consultants assessed processes and technologies in- volved with monitoring and managing

manufacturing floors, utilities, transportation fleets, and

other “business infrastructures.” They came to the con- clusion that great economies of scale could be achieved by consolidating these requirements. In other words, by leveraging IT capabilities for monitoring, instrumentation, as- set planning, security, service management, automation, and analytics, businesses could gain new levels of operational effi- ciencies, minimize risk and more proactively optimize to changing market requirements. Back then, EMA called this the “Global Cor- porate Control Center.”

governance existed at all. The Web was certainly not Web 2.0 let alone SOA, and the notion of broad integration technologies such as CMDB, configuration management systems (CMS), IT process automation, and advanced dis- covery fundamentally didn’t exist.

Then IT had the shock of its life. From 2000 to 2002 the technology bubble imploded, leaving many technol- ogy companies adrift in a sea of doubt and IT organizations fight- ing hard not to be outsourced. And while that fight has been renewed in the latest economic crisis, most IT organizations have learned a lot since then about governance, visibility, compli- ance, accountability, and how to optimize better with many of the above-mentioned technologies. Even more importantly, there is something of a slow-burning po- litical revolution within many IT organizations leading to dialog across organizational groups in a creative, responsible, and game- changing way that simply never existed before. Of course there’s still a long way to go, but the IT landscape is fundamentally shifting.

Let’s revisit the premise of EMA’s old idea of the “Global Corporate Control Center,” which suggests collapsing a whole new set of “feudal kingdoms” into a more efficient, more risk-free, more automated, and more accountable fabric of people and technologies. One thing that should become apparent just from reading the press is that com- panies in many industries are accelerating their quest to find new and more effective ways of working.

their quest to find new and more effective ways of working. At that time, in the

At that time, in the late ‘90s, monitoring was pretty basic (well, even more basic than it is today, at least), and process au- tomation existed (when it existed at all) in very narrow silos within IT. Analytic capabilities were mostly rule-based event man- agement with very little in the way of self-learning, self- adaptive heuristics. And when these later appeared, these “advanced analytic” capabilities mostly didn’t work.

Attention to process and the disciplines that best practices such as ITIL could provide were barely emerging. IT was very much a kingdom set apart from the business — or no, not even that, but rather a series of feudal kingdoms each with its own walls and each with its own opinions about priorities and governance — when defined priorities and

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

Some of these industries, such as healthcare, reflect a more proactive effort as electronic information for stor- ing and sharing patient records, enabling collaborative diagnostics, and automating the business side of hospi- tals and other healthcare institutions is beginning to take hold. Other verticals, such as manufacturing and retail, are increasingly dependent on better systems of automation, outreach, visibility, and control just to ensure competitive survival. In some industries, such as utilities, the linkage between the “business infrastructure” and the “IT infra- structure” becomes intuitively obvious as the power grid is essentially a “network of resources” that needs to be better monitored and optimized.

Transportation systems can be run much better when IT provides better capabilities for monitoring, tracking, “ser- vice management” and “lifecycle fleet management.” And even financial services, which have spearheaded a lot of in- vestments in IT innovation (and may have gotten in trouble from too much ill-focused automation), are facing a drastic need to consolidate, integrate, inform, make visible, and support a whole host of existing and coming compliance requirements.

Several vendor initiatives, most notably from IBM, are tar- geting individual vertical business infrastructures in much this same way. But this idea is much bigger than IBM. Tech- nologies and services from a whole host of companies and services can and should apply. And while the equivalent of an ITIL guidebook for doing this doesn’t yet exist, the pro- cesses and skill sets for dialog, consensus building, defin- ing priorities, and documenting processes across multiple groups all still apply.

Just think: with a modest but creative investment in instru- menting business infrastructures your chosen IT technolo- gies, and more importantly, you and your organization, may begin to show value in a whole host of new and un- expected ways. And while new opportunities often come with associated headaches, the upside for you and the IT industry as a whole is high.

The notion I’d like to put forward to CIOs and enterprise IT executives is that just as you need to lead the charge in supporting organizational transformation and its associ- ated technologies within IT (CMS, IT process automation, etc.), you have an opportunity to promote IT services and technologies in a broader business context. And when, you may ask, is it time to start to think more creatively about extending IT resources in support of business needs?

While it may seem counter-intuitive, this may just be the perfect moment to get credibility and support for a more innovative use of IT. The fire in the belly exists in many businesses and organizations across many verticals to act now. This time around, vs. 2001, you are squarely part of the cure and not the disease.

2001, you are squarely part of the cure and not the disease. 3 Back to Contents

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

CIOs More Focused on Business than Ever

By Allen Bernard

I n case you missed these past few years, the job of the CIO has been morphing from top technical propeller head to that of true corporate leader. Beginning with the dot-com era and continuing through today, the job has arguably changed more rapidly than any other in corporate America. Once just an order taker, CIOs are now spending most of their time fig- uring out how to leverage tech- nology for business advantage as opposed to just keeping the lights on.

IBM’s latest global study of more than 2,500 CIOs supports this conclusion.

To do this CIOs are leveraging analytics to gain a competi- tive advantage and improve business decision-making. In fact, this is now the top priority for CIOs. More than four out of five (83 percent) survey respondents identified business intelligence (BI) and analytics — the ability to see patterns in vast amounts of data and extract actionable insights — as the way they will enhance their organizations’ competitiveness.

The study, titled The New Voice of the CIO, represents the insights and vision of CIOs from 78 coun- tries, 19 industries, and organiza- tions of every size. It reinforces the increasingly strategic role that CIOs are playing as visionary lead- ers and as drivers of innovation and financial growth.

lead- ers and as drivers of innovation and financial growth. “Clearly the role of the CIO

“Clearly the role of the CIO is changing dramatically,” said Pat Toole, IBM’s CIO, in a state- ment released with the findings. “On the one hand they are try- ing to standardize routine pro- cesses and simplify their exist- ing IT infrastructure to reduce costs, hence their growing interest in technologies such as cloud computing. On the other hand, given the central role that today’s CIO performs in driving new business models, whether it’s a Smart Grid system, an Intelligent Transport system, or a transparent food supply chain, it’s not surprising that the amount of time they are now spending on driving new kinds of growth for their compa- nies is growing considerably.”

Along with the increased focus on data analytics, the survey also revealed that data reliability and security have emerged as increas- ingly urgent concerns, with 71 percent of CIOs planning to make additional investments in risk management and compliance.

Other key findings of the survey include:

CIOs are continuing on the path to dramatically lower energy costs, with 76 percent undergoing or planning virtualization projects.

Seventy-six percent of CIOs anticipate building a strongly cen- tralized infrastructure in the next five years.

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

More than half of CIOs are expecting to implement completely standardized, low-cost business processes.

Even as they build these standardized low-cost infrastructures, CIOs are able to focus 55 percent of their time on activities that drive innovation and growth, whereas traditional IT tasks like infrastructure and operations management now consume only 45 percent of their time.

“There really is a ground swell on how their role is evolv- ing,” said Linda Ban, director of the CIO study program. “It’s no longer enough for them to be considered the con- summate IT professional in the company. They’ve got to understand the company, they’ve got to understand where the company is moving and what the issues are and how they help make that happen.”

As the role of the CIO itself transforms so do the types of projects they lead across their enterprises, which will allow CIOs to focus less time and resources on running inter- nal infrastructure and more time helping their companies grow revenue. CIOs are transforming their infrastructure to focus more on innovation and business value rather than simply running IT.

Top Projects

In the study, CIOs also identified the top visionary projects that they are working on now or foresee implementing in the future, ranging from process improvement to tak- ing advantage of technologies that can provide immedi- ate and long-term financial impact. These include: BI and analytics, virtualization, green IT, service oriented architec- tures (SOA), service management, and cloud computing.

CIOs are also focusing on mobility solutions and unified communications, collaboration and social networking tools, and Web 2.0 projects to enable more effective com- munications for employees, customers, and partners.

“You can see that they are really a combination of busi- ness and technology so at any given point in time in the morning they may be focused on (technology) and in the afternoon they may be working on a five-year plan for the business,” said Ban. “So, they wear many hats during the day, they change roles on a regular basis, and whatever comes up will be what they have to focus on.”

and whatever comes up will be what they have to focus on.” 5 Back to Contents

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

Mastering the Art of IT/Business Alignment

By Patty Azzarello

A s I’ve been writing about IT/business align- ment and working with IT organizations, I see

that CIOs and enterprise IT executives fall into two camps regarding taking ownership of IT/

business alignment.

more respected and trusted, which means they get more budget, more support, and waste less time on defense, endless justifications, and stupid questions. They can de- liver more, because they have fewer things blocking them and they attract the best people to work for them.

“Not my job.” Some CIOs have given me pretty direct feedback that people like me should get out of the way and stop giving IT a bad rap. They think that if you need to focus on building credibility, it means you are, by definition, un- deserving of credibility. The only thing that should matter is doing a good job. Good work speaks for itself.

“I need to own this.” These are CIOs and executives who believe that making personal, relevant connections to their business peers, CEO, and board is one of the key factors in being success- ful in the first place.

Good work doesn’t stand on its own – at any level, in any function. This is not just an IT issue. People who work really hard and deliver great re- sults don’t always get recog- nized, discovered, or protected. It’s sad but true. In IT it’s even more perilous because no one else even understands what a do- ing a good job looks like. It’s up to you to find a way to share what excellent work in IT looks like in a way that can be understood by non-IT people.

looks like in a way that can be understood by non-IT people. Technology doesn’t help. Build-

Technology doesn’t help. Build- ing good business relationships requires personal interaction, listening, and having a meal or a coffee with someone. Because it is outside the realm of technol- ogy, many IT executives feel like it is low-value activity, or they are just not comfortable with it. You don’t need to be comfortable; you just need to do it. If it’s unpleasant for you and unlikely to happen sponta- neously, schedule it.

As you consider your appetite for reaching out to your business counterparts here are some points to consider:

Executives with high credibility get more done. This is not a shallow, political phenomenon independent of deliv- ering results. It’s because people with high credibility are

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Aligning Business and IT in the Enterprise

Business first. This is not just an IT challenge. All business functions have the responsibility to manage their function while putting the overall business first and at the center of the discussion. Any executive leader needs to be able to focus first on what the business needs and then prioritize what happens inside their function to serve the business agenda. The more you connect with your peers on a busi- ness-first basis (where all of you are putting the business at the center vs. your own function), the clearer it will be what is important to the business, and how you should focus and communicate your IT plan in your interactions with the business.

How do we make money? One thing that really helps is if you make sure every person in your IT organization knows how the company makes money. Explain where the revenue comes from, what the fixed and variable costs are, and what the biggest levers that drive profit are. Make sure they understand how IT spending impacts the P&L, and how choices are made about general business and IT investments.

choices are made about general business and IT investments. 7 Back to Contents Aligning Business and

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

Leveraging the Right Resources for Alignment

By Jerome Oberlton

I T’s alignment with the business is critical to the suc-

cess of an organization. My experience as CIO of

Mannatech, Inc., working with business executives

to achieve results for our supply chain management

work side by side with the business to develop an overall strategy for supply chain optimization.

To meet this requirement, I selected an individual from the talent pool of consultants who had previously worked on supply chain efforts at Man- natech. I was looking for an indi- vidual who was well versed in the supply chain discipline and could help guide the business along the appropriate path. In that same professional, I also sought someone who understood the specific supply chain modules of Mannatech’s resident Enterprise Resource Planning (ERP) system so he or she could align the fun- damental needs of the business with the technology.

project, confirmed this to me.

Such alignment often entails the willingness of key leaders to col- laborate and focus on the ex- ecution and delivery of key pro- grams. In many cases, successful collaboration means leaders need to have extensive conver- sations concerning what’s vital to the business. Ideally, executives should give up personal agen- das, work across departments, and enable IT to provide the resources that are necessary to make those programs a success.

In addition to these factors, CIOs and enterprise IT executives must also hire the IT professionals most likely to create an atmosphere of alignment between technology and business.

an atmosphere of alignment between technology and business. This combination of talents, in turn, enabled the

This combination of talents, in turn, enabled the creation of a sound strategy that IT, in connec- tion with the business, could use to introduce a program that would deliver huge value to the organization.

Hiring the Right IT Professional to Bridge the Business

As I continued to use alignment as a means of driving the success of all business programs, including supply chain management, I recognized the importance of hiring a sea- soned supply chain management professional who could

With this professional in place, Mannatech hired a supply chain management executive who had a very solid back- ground in sourcing, contract management, demand plan- ning and forecasting, warehouse management, and lo- gistics management. This individual was a well-respected leader who already understood the cultural dynamics of the business.

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

Achieving Strategic Value

Her focus on supply chain optimization, coupled with her desire to utilize technology to drive improvements and overall productivity for the business, was an ideal match for the company. She not only set her sights on collaborating with IT but also understood the need for cross-functional business alignment as a means to achieve strategic value for the business.

Our new VP of supply chain management began work im- mediately after accepting her new role to ensure that both a disciplined and structured approach for execution was in place. During this process, we developed a cohesive strat- egy and execution plan for the supply chain optimization project. Both the plan and strategy were shared with key business executives and then subsequently shared with the CFO.

Her relationship with the CFO was important because we wanted him to understand the impact and importance of the supply chain optimization initiative. The VP of supply chain management carefully nurtured that relationship and was key in advising the CFO of specific efficiency and cost-saving opportunities that were available as a result of this project. She outlined the business case associated with the need for supply chain optimization and helped ensure the program had the appropriate level of visibility at the senior executive level. The vice president of supply chain management met with the CFO to discuss the pros and cons of the effort. Not only was she able to elevate the importance of the program with the CFO, but she also specifically worked with IT to champion the success of the program.

Partnering with an individual who is well-respected among senior leadership and is committed to a strategy of col- laboration can be very valuable to an organization. When hiring a new team member, look for these traits to help ensure a successful team:

Business-savvy and technical-savvy: If a candidate dem- onstrates strength in both areas, the business will readily accept this person as a member of the team, and credibil- ity will be more easily achieved.

Relationship-oriented: Ideally, a candidate will understand the importance of building a relationship with the business as well as forming internal alliances. One must make a me- thodical, planned effort to build lasting relationships.

Cultural awareness: Knowing the nature of the business and demonstrating an ability to adapt to the cultural dy- namics of an organization are extremely important.

Using Alignment to Transform Web Resources

Just as with the supply chain optimization effort, I re- searched other programs that would contribute to the ef- ficiency and effectiveness of the Mannatech organization. After a number of conversations with key members of the leadership team and much deliberation, we agreed that the corporate Web site had become obsolete and was in need of a redesign.

The old Web site was dated and used mostly to process or- ders and handle the registration of new independent sales associates. The site desperately needed an upgrade, as it was difficult to navigate and had little consumer appeal. An upgraded site, if appropriately designed, could better position the Mannatech image and brand. Additionally, it could be used to up-sell and cross-sell products while also reducing the amount of time needed to order products and register new independent sales associates.

Taking on this effort was no small feat. As CIO, I real-

ized the need to collaborate with other key executives as

a means to help propel the effort forward. Keeping this

need in mind, I reached out to the head of marketing to discuss the challenges with the existing Web site. The chief marketing officer (CMO) agreed with the need to upgrade the site, and we collectively began working on a strategy and plan to present to the CEO and, subsequently, the board of directors.

In preparation for our presentation, the CMO and I spent

a great deal of time learning the challenges and frustra-

tions that associates were experiencing on the Web site. We knew if the associates’ ability to do business was ham- pered, it would ultimately affect Mannatech’s top and bottom lines.

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.

Aligning Business and IT in the Enterprise

We extensively researched the impact on productivity and customer experiences; we conducted surveys and ana- lyzed various Web tools in order to generate a viable solu- tion. This collaboration gave us true insight into what was working and what needed to be improved so that by the time we met with the board, we were well-prepared.

During the presentation, the CMO laid out the impact that executing this program would have on the broader market and detailed how this program would help our company reposition itself. At the conclusion of the presentations, both the CEO and the board elected to have the CMO and I spearhead this program for the business.

The Web site redesign program underwent extensive test- ing by a subset of Mannatech associates. Based on several feedback sessions, the field organization was pleased with the new Web site redesign.

Alignment and collaboration are important for any organi- zation but can be especially valuable in bridging the gap between the business and IT. Organizational goals and initiatives can be successfully achieved by partnering with individuals who are well-respected and who have a proven track record. Such a partnership will help IT better under- stand how to connect any issues with viable solutions and ultimately achieve success.

issues with viable solutions and ultimately achieve success. 10 Back to Contents Aligning Business and IT

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Aligning Business and IT in the Enterprise, an Internet.com IT Management eBook. © 2010, Internet.com, a division of QuinStreet, Inc.