Fernando Labastida: Technology, Austin, Latin America

Jason Hiner, Executive Editor at  TechRepublic.com, in his Sanity Check blog, has published a very useful article in two parts on the Alignment between IT and Business.  The first one, a summary of a Wall Street Journal article on the topic (Hiner has had problems with the WSJ’s take on IT issues in the past), points out the divisions between IT departments and a company’s busines goals, a division which can be debilitating to company growth.  Hiner sums up the article thus:

The general thrust of the article can be summed up by this line: “Success in the digital economy of the 21st century demands a strategic role for IT. And for that to happen, the glass wall between IT and the rest of a company has to be shattered.”

He cites analysts’ estimation of hundreds of billion of wasted dollars on failed IT projects, CIOs who come from technology backgrounds and don’t know how to integrate IT with business goals, and business leaders who look down on IT personnel as ‘nerds.’  Although he largely agrees with this particular WSJ article because they relied on IT industry experts Dr. Amit Basu and Professor Chip Jarnagin instead of internal writers, his own prescription simplifies the articles’ own prescription:

1. Hire a CIO who has business savvy but can also gain the respect of the techies in the IT department
2. Improve IT awareness/training among executives and team leaders throughout the business
3. Improve business awareness/training among the company’s IT managers

The second article in the series is a summary of an MIT Sloan School of Management paper on avoiding the IT Alignment Trap.  Apparently, it’s not enough to just align IT with business goals.  Companies that do that have to also make their IT processes more efficient; if not then they actually spend more on IT than the average company, and the company’s sales goals fall short of the average.

The key is not only to align IT with business goals, or rather, integrate IT with the business, but to simplify IT department processes:

1. Reducing complexity by establishing standards and getting rid of redundancy
2. Rightsource the job, by making strategic decisions as to what to keep in-house, what to outsource, and what to hande with packaged applications, and
3. Creating end-to-end accountability.

Hiner generally agrees with the MIT Sloan paper, except for it’s prescription for centralized IT management.  He advocates a certain amount of decentralized decision-making, especially as it relates to alignment with the goals of separate business units or departments.  He also disagrees with the “alignment” word, citing “integration” (my favorite word; Martin Luther King Jr. would be proud), as better because IT should always be subordinate to the business.

This article series I believe supports an argument I’ve been making throughout this blog, that IT projects should be considered from a purely cost-benefit point-of-view.  Relating this to integration, the purpose of this blog, Loraine Lawson cites an interview with Philip Russom with the Data Warehousing Institute where he states the benefits of “rightsourcing,” in this case using a packaged application:

Data integration requires a senior-level programmer typically, he said, which means you’ll be paying at least one programmer six figures to spend months coding data integration from scratch. By comparison, you could build a comparable solution in two to three months with a vendor tool for less money, he said.

In my experience, the time can be considerably less than two to three months.

Integration’s role in a company where IT and Business are aligned or integrated should be to get out of the way as quickly as possible, not be a bottleneck, stay simple, repeatable and in the background so IT can properly support business goals.