Advisory committees can help align IT and business objectives - as long as the CIO keeps a firm hand on the tiller.
Sometimes the things you don't know can hurt you. "If you'd asked me a few years ago, I probably would have said we're doing all right," says John Smith, IT director for the southern region (US) of Entergy Nuclear, a subsidiary of Entergy Corp. He discovered instead that some of his fellow senior executives did not agree. "The COO and I had some tense discussions about this," he says.
Smith formed an IT advisory council to align his department's objectives with those of the rest of the enterprise. With regular input from business-side executives, including the COOs from both of the company's regions, the council has helped Smith hammer out an IT strategy with goals that more closely resemble those of the business it serves. "Our IT business plan was organizational. It dealt with architectural and desktop issues," Smith says. "But that doesn't ring with the rest of the business."
The advisory council restructured Entergy's IT strategy to focus more on business goals that are measured by operating costs, outages, worker morale, training and other benchmarks specific to the nuclear power industry, Smith says.
Many CIOs consider IT advisory committees and other variants of steering committees indispensable - with a few caveats: They can't be allowed to micromanage, turn everything into a budgeting exercise or stray off topic.
Assemble the Right Team
The nomenclature can get murky. Senior-level groups are variously referred to as steering committees, advisory councils or leadership teams. (Our "State of the CIO 2004" survey showed that 75 percent of local organizations have a high-level group that governs IT investment decisions.) All these assemblages typically comprise top managers and focus on strategic directions, major investments and only the most sweeping projects, meeting no more often than quarterly or every other month, according to Forrester Research vice president and research director Marc Cecere.
Two-thirds of enterprises rely on a committee of senior business leaders to oversee and prioritize IT investments, according to a recent Forrester survey of more than 1300 North American and European organizations. Three-quarters of these committees bring multiple business units to the table, and 70 percent reserve a seat for corporate IT. Roughly half include the CEO and half the CIO.
Departmental or midlevel groups might be called priority review committees or advisory boards. These are more varied in make-up and function: Some tackle individual business functions or IT projects, while others handle IT architecture and standards, or serve as a forum for feedback from departments.
The city of Palo Alto, California, confines its high-level steering committees to enterprise-wide IT projects such as its recent SAP rollout, according to CIO Glenn Loo. Committee members include department heads and city council-appointed officials - essentially, the top echelon below city manager level.
"The idea is to keep the [department] directors aware of the progress and maintain their commitment to the project," Loo says. Meetings are generally held monthly.
Besides the SAP project committee, the city also has standing steering committees for its geographic information system (GIS) project, customer information system for utilities billing, emergency preparedness and other programs as well.
To ground the steering committee meetings in tactical realities, Palo Alto has technical and operational managers present updates from project-level staff meetings to the steering committees, Loo says.
Many organizations pair IT steering committees with cross-departmental advisory boards that are closer to the action. "A good strategy has to have roots in both the high level and the lower levels of the organization," says Entergy's Smith.
Entergy Nuclear's IT advisory council includes the COOs of the company's southern and northern regions, senior technology managers from each region and business-side vice presidents. The council (which meets quarterly) is a general IT oversight body, attending to strategic planning, guiding major initiatives and spurring IT to greater productivity. Subsequently, at each of the company's eight nuclear power plant sites, a site priority review committee will field input on IT requirements and hash out tactical plans consistent with the advisory council's strategic directives.
Some organizations have more of a hub-and-spoke committee arrangement. Fairfax County Public Schools in Virginia maintains separate IT steering committees for HR, facilities, transportation, finance and procurement, with a central committee made up of CIO Maribeth Luftglass (who chairs all the groups), department heads and the superintendent. The committees serve as conduits for communication, coordination, and evaluation of how well IT and business objectives are aligned.
"Who Are We and Why Are We Here?"
Although steering committees serve as catalysts and reality checks in the integration of IT and business, their lack of a specific focus can make them tough to justify and maintain.
"Initially, some committee members were asking, Why do we need this?" says Luftglass. "It helps standardization, prioritization and compliance; and departments can jointly request resources through this structure," she says. "And it's a way to handle project conflict and resource issues. You can direct things to happen and break deadlocks."
Part of the problem is the learning curve. Advocates need to prepare senior management for a break-in period of up to six months, according to Forrester's Cecere. Some committee members will bring a number-crunching bias, others might expect an IT shopping trip. "Once you get them educated on the fusion of business and IT, it works well," he says.
Cultivating that understanding can also put IT on firmer political ground, according to Smith. "It can change the cost centre view. In the absence of a steering committee, all you're going to wind up with is: Just make it less.
"With enabling technology like wireless, you can explain it to management. It can't be purely at budget time," he says. "This way, when you do the budget, you've already had a dialogue and you have advocates in the room."
More Ways to Go Wrong Thanto Go Right
Despite their benefits, IT steering committees fail for a wide range of reasons, says Cecere, who adds: "The tactics seem to be fairly consistent when they work."
It's not enough to just name a few top people to a steering committee. While cross-departmental advisory boards and other midlevel groups can vary considerably in their constituency, the top of the pyramid doesn't leave much wiggle room. "Never let the steering committee create anything," Cecere advises. "Don't go to them with an open-ended problem. These are the lions of the company. It's best to give them two or three alternatives and get their recommendations."
It's also unwise to let the meetings turn into unstructured debates. "Drawn-out discussions on things like outsourcing are probably important but wrong for this forum," Cecere says. Nor should committees wade into tactical decision-making, detailed budgeting or project management, he adds. Other pitfalls include drafting the wrong personnel to serve on the committee and failing to agree on a framework for high-level decision-making.
By limiting steering committees' involvement to enterprise-wide projects, the city of Palo Alto avoids miscasting its managers, according to Loo. "For strategic IT planning we feel that it is necessary to meet with the departments, not necessarily jointly," he says. "It's our responsibility to distil this information for efficiencies for common requirements. It would be inefficient to put this decision out to management across this org and reach a comprehensive strategy. People would tend to throw out their favourite acronyms and whatever they feel more comfortable with for their particular organizations."
To get participants warmed up for the infrequent committee meetings, ease them into the technology discussion. "Give them something that you know is going to entertain them for about an hour. Fill them in on what their competitors are doing for business intelligence or security; or to get the senior executives interested, give them information on the devices they're using personally," Cecere says.
Whether and how enterprises use IT steering committees and advisory boards is something of a litmus test. If the CIO regularly touches base with the CEO and other senior leadership for reasons other than crisis management or budgeting, it's generally a good sign.
"I am a strong believer in IT steering committees," says Entergy's Smith. "I don't care how good you are; if you don't get the buy-in directly from the groups you're supporting, you'll always be the odd man out."
If It Ain't Broke, Why Assign a Committee to Fix It?
Some organizations forgo forming advisory groups and instead address the same issues in the normal course of business. The IT department of London-based multinational design and engineering firm Arup coordinates projects and funding with the firm's business units for projects that affect them exclusively and with the board of directors for global initiatives, according to IT director Henrik Kiertzner.
The IT organization keeps in touch with local, regional and global managers, "helping the business leadership define its needs and developing the technological solutions that fit the needs and the [client's] willingness to spend", he explains. Arup delegates responsibility for routine IT operations and investments as far out in the organization as possible, according to Kiertzner.
Nonetheless, Arup's IT group is planning to create steering committees, at both the regional and central levels. Their function "will be to articulate the business strategy, which the technology piece has to evolve to support", Kiertzner says.
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