Page 487 - Handbook of Modern Telecommunications

4-18 CRC Handbook of Modern Telecommunications, Second Edition

Finding 3: Without a supportive corporate culture, alignment is more difficult to achieve. Executives
at firms where IT is well aligned are significantly more likely to describe their corporate culture as
being collaborative, adaptive to changes in the marketplace, and well suited to the company’s strategy.
Business executives, even more than IT executives, appreciate that alignment is most likely to succeed
when alignment is a companywide concern, not a concern just in the IT department. The message to
CIOs with alignment problems is clear: Fixing the problem often requires cultural change throughout
the company. Focusing on the IT department alone will seldom work.
Finding 4: Alignment processes are not working as well as CIOs think. Nearly all CIOs believe their
department works with others. If that were true in practice, more business-side CXOs and vice presi-
dents would agree; however, 43% of director-level business managers say that the IT culture clashes with
the business. Nor would the CIOs’ employees consistently give far lower marks on creating a collabora-
tive culture, identifying alignment-fostering processes, and other activities that are part of an alignment
culture than their bosses do. CIOs need to do a serious reality check.
Finding 5: The CIO’s background is less important for alignment than the company’s culture. Many
business and IT executives assume companies with CIOs from business background are more likely to
be aligned. It turns out, however, that there is no correlation at all. What does matter is whether the CIO
participates in setting corporate strategy. Interestingly, companies where that occurs are also likely to
have a culture that supports alignment. Does the opportunity to work with other executives on strategy
give CIOs a chance to influence their company’s culture?
Finding 6: Alignment requires effective governance. Whether IT is centralized, decentralized, or
follows a shared-services model has little correlation with alignment. But effective governance is critical
for alignment—in large part, it appears, because good governance goes hand-in-hand with a collabora-
tive management style. That is why it is odd that IT executives who claim they are “IT monarchists” and
have little need to share IT decisions with business say their approach to governance is effective.

4.2.2 Support of Business by IT

In response to the pressures to increase quality of service while reducing costs, many IT organizations
are transforming themselves to be more business and customer centric and operate like an independent
business—that is, as a service provider to business customers. Although a small percentage of IT orga-
nizations pursued this strategy for years, it did not reach mainstream until between 2002 and 2003. At
that time, IT organizations realized that to provide the highest service at the lowest costs, they needed to
invest systematically in architecture, product/service definition, and repeatable processes. In pursuing
this strategy, IT organizations need to reengineer their operational processes, invest in automation to
increase agility and service quality, and reduce costs. Although this transformation process often takes
two to five years, it yields significant benefits for organizations, regardless of whether their IT operations
are in-house, outsourced, or a combination of both.
To better align business and IT planning, many enterprises have established an IT strategy council,
whose role it is to ensure that the business strategy is supported by an IT plan that is timely, feasible, and
affordable. In support of this effort, IT and business planners are asked to develop a baseline IT plan to
be adopted by the IT strategy council. The plan should lay out the business strategies to be supported for
the strategic planning period and a comprehensive yet high-level view of the IT support required.

4.2.3 Baseline Information Technology (IT) plan

The part of the baseline plan that covers the coming year can be extracted and updated, as part of the
annual planning process, to incorporate the annual business operating plan. Then, throughout the busi-
ness year, the plan can be updated to reflect ad hoc business projects driven by unplanned, short-term
needs. As part of the updating process, the plan is fleshed out in much greater detail and becomes, in fact,
the IT annual operating plan. These are the recommended steps for producing the baseline IT plan: