BEST PRACTICE 2

69 percent of CIOs say: Involve business unit managers in all stages of projects

Hook Your Business Leaders How to keep the business engaged in IT initiatives from start to finish

One of our best practices CIOs - who had spent more than 10 years on the business side of the company - said he actually took on the CIO role because as a businessperson he was "sick and tired of having IT done to me". So when he took the CIO job, he wanted to involve business managers in the IT process.

Then as the CIO he saw the flip side during a multi-country ERP implementation. The initial implementations went less than smoothly. "The first projects we did were your typical IT projects: The business gave us their requirements, we gave them the system, and they struggled," he said. As the SAP work continued, he noticed another disturbing trend: Only 60 percent of project milestones were being met on time. The CIO knew he needed to involve the business managers more intimately in IT projects. Like many of his peer CIOs, he found the only way to do that was to make the business leaders feel like ultimate owners of IT projects.

Nearly 70 percent of CIOs in "The State of the CIO 2004" survey said it's extremely important to involve senior business leaders or managers in all stages of an IT initiative. Here are three methods that leading CIOs use to bring the business side into the IT process.

Establish a Clear System Set up a project management process for all IT projects to clarify the requirements of business involvement, our leading CIOs said. And at the start of each initiative, involve business leaders by insisting on both a business champion and a business-side project manager for every IT project.

The champion is the general manager of a plant or a business unit head who will reap the project's benefits. "The business champion is the person ultimately responsible for the recognition of the business value of a project. If we're claiming $1 million in savings, his annual operating plan must reflect that," one CIO said.

The project manager is someone selected by the champion from his staff. The business project manager can make sure the business roadblocks are taken out of the way. As an example, another best practices CIO cited an instance where a business project manager shepherding a project involving ERP software determined that the project staffers didn't have the right skills to run the application. The business project manager arranged to have them trained and in the meantime brought in temporary help until the staffers were up to speed.

If managers are reluctant to designate champions or devote their own time, then take that as an admission that the project is a low priority.

Another must, our CIOs said, is that an IT project manager familiar with project management methodology should be part of the project team. One CIO said his team begins by reviewing its project management process: What they will have to report on and when, as well as instructions on how to identify and resolve problems and changes in scope. The team figures out the resources required (such as a materials manager to describe business processes or a financial analyst to help with the figures) and each individual's level of involvement. Then throughout the life of the project, the business leaders, with the help of IT, follow the very detailed steps written down in the project management process.

Encourage Business Leaders to Think in IT Terms The bulk of our best practices CIOs see most of their IT projects initiated by managers in the lines of business, so it's important that business managers understand IT's capabilities and limitations.

One CIO asks the business managers to make a pitch first to their functional heads - including a presentation of costs and benefits - for any IT project. If approved by that manager, the project then goes before the information technology steering committee. "IT has to manage from the back," this CIO said. "We in IT do a lot of things behind the scenes, but for projects to be successful you have to have senior managers say: 'This is mine. It's integral to my success.'"

Make Managers Set IT Priorities Our best practices CIOs agree that the only workable method of prioritizing IT projects is to get business leaders and users to do it.

To whittle down the hundreds of competing requests for IT services that come from each of his organization's four autonomous divisions, one CIO formed user groups around a specific area of technology that affects all divisions, such as e-business. Each group is chaired and populated by eight managerial representatives of the business and includes one of the CIO's IT directors. It's a kind of mini-steering committee working below the CIO's executive IT steering committee, which he said "doesn't have time to participate in the day-to-day drudgery of IT decisions".

Now, when any department leader has an e-business request, he must explain to his peers how it fits into the strategy of the company as a whole. The portfolio of e-business projects has gone from 150 to 50, with 10 having priority at any one time. IT-business relations have improved because division leaders "know why their project is off the list, and they know that it was the business itself that put it off the list".