It Takes Two to Tango

How reasonable is it to demand CIOs be well versed in the business, as most businesses now do, while excusing business from knowing anything about IT? Bruce Campbell, a lecturer at the Faculty of Information Technology at University of Technology Sydney, is currently conducting PhD studies into the enablers and inhibitors to IS/business alignment, having interviewed both business and IT managers across a range of companies and industries. He says the perceived attitude to the IT role by senior business managers will, to a large extent, dictate the type of IT service provided. And changing that attitude is almost impossible.

IT is often regarded as a service but few business managers wish to become involved in either understanding or managing that service, Campbell points out. "It appears that, worldwide, IT management subjects are becoming less popular in business degrees at both undergraduate and postgraduate levels," he says. "A complaint of CIOs is that, in contrast, they are expected to have a reasonably in-depth knowledge of all other business functions. There is a double standard in operation."

Further, Campbell notes, the performance measures applied to business units and managers have a significant impact on the IT service that is provided. Most incentive and measurement schemes have a short horizon. This often results in IT-related decisions taken by business managers to maximize their own performance in the short term that are often detrimental to the organization in the long term. And the situation is not helped by the habit of many organizations of purposely putting various business units into competition with each other, making a corporate-wide IT response difficult to plan and implement.

"Each of these situations leads to different IS 'strategies' being implemented at different levels of an organization and in various business units," he says.

"The structure of most organizations makes it almost impossible to develop trust between IT and other personnel," Campbell says. "This, then, retards the development of shared domain knowledge, which has been shown to be vital in the provision of a superior IT service."

Peter Bars, partner, CIO Services with Deloitte, agrees the key to IT optimization lies not in the types, uses and cost of technology, but in the governance models used to manage and integrate IT within the business. It is not what you spend but how you govern IT that unlocks value.

Bars defines IT governance as the organized capacity to guide the formulation of IT strategy and plans, direct development and implementation of initiatives and the oversight of IT operations works well in order to achieve competitive advantage for the corporation. He says it comprises six key tasks: leadership; planning; capital allocation; policy setting; coordination and compliance; and monitoring and qualitative benchmarking. Governance goes to the heart of the IT infrastructure, Bars says: It is not static but continually evolves in line with shifts in the market and business environment.

"CIOs face two challenges: keeping the lights on, or the utility level, and pushing the strategic agenda. If the CIO can win credibility and respect at a utility level, there's more likely to be support, from the bottom up, for more innovative IT projects. Good governance means distinguishing the utility or must have elements of IT from the innovative components, which are essential for competitive advantage, in order to achieve value. Both elements need to be sufficiently dynamic to cope with increasingly unpredictable commercial environments.

"The CIO has the opportunity to give organizations the IT they deserve by using appropriate governance to unlock the value of IT and secure a seat at the top table."