An interesting new book recently hit my radar screen, which further crystallized a thought that had been lurking in the back of my mind for some time. Countless articles and conference presentations continually drive home the complexities of business-IT alignment and IT’s role in a successful or failed partnership, but—and here’s where that little errant thought comes in—how exactly is the corporate level weighing in, and how should it? After all, if there is no touchable, concretely implementable enterprise strategy, what can a CIO align to? I think many among us assume the big-picture strategy simply exists . . . just like the air we breathe. But maybe it doesn’t.
I broached this issue in a column several months back based on disparate comments I was hearing. However, in a book published in April titled Alignment: Using the Balanced Scorecard to Create Corporate Synergies, authors Robert S. Kaplan and David P. Norton make the following observation: “Aligning organizational units to create value at the enterprise level generally gets less attention than creating value at the business unit (BU) level. Most strategy theories focus on business units, with their distinct products, services, customers, markets, technologies, and competencies.” Wouldn’t you agree this hits pretty close to home? (In fact, our cover story, p. 18, in the same vein, takes the pulse of the business side to assess its satisfaction level with IT.)
The authors go on to say: “Most contemporary corporations, however, are made up of portfolios of business units and shared-service units. For a corporation to add value to its collection of business units and shared-service units, it must align these operating and service units to create synergy. This is the domain of the corporate or enterprise strategy, defining how the headquarters adds value.” So, evidently the CIO isn’t out on a limb all alone.
In addition, the authors claim companies have treated their service units, including IT, as discretionary expense centers for which they set a budget and then monitor actual expenses against the budgeted amounts. “Treating these units as discretionary expense centers does little to align them to serve their customers: the internal business units and the corporate headquarters.” The authors go on to propose a process that will transform support groups from expense centers to strategic partners.
This does cut IT some slack but not completely. As the role of the CIO evolves from technologist to strategist, the CIO as leader can’t shrug and say, “That’s not my job.” Being part of the executive team increasingly means having that big-picture enterprise view, which actually may be more attainable in this role than in most others, since CIOs aren’t focused on any particular line of business. It appears to come down to good news/bad news. The bad news is, while certainly not shouldering the responsibility alone, the CIO may be more on the hook than ever. The good news is IT is well positioned to succeed and do what’s best for the organization as a whole.