Successfully partnering technology and business competences to ensure optimal use of the available technological capabilities

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Eager to test the hypothesis that the crisis of 2008 has exerted significant impact on the way companies manage their IT, Vlerick Leuven Gent Management School teamed with Deloitte to invite 18 high-profile companies to participate in this study. 18 CIOs and 10 CFOs from these companies were interviewed about the way they are handling IT management during this current crisis. The results have been published in the report “Engaging in turbulent times. Direction setting for business and IT alignment.”

It is an accepted fact that business and IT are not always on the same wavelength. However, a recent study by Vlerick Leuven Gent Management School and Deloitte shows that, in some companies, the crisis is compelling IT and business leaders and their staffs to team up with each other more effectively.

Stijn Viaene, Professor of Management and IT at Vlerick Leuven Gent Management School & K.U.Leuven, elaborates: “The crisis seems to have functioned as a catalyst for rethinking the way the IT department can align itself with its demand side, and also the other way around. We noticed that the historical duality that has existed between the business and IT is slowly ebbing away in many mature organisations.”

How do you manage your IT in turbulent times?

Viaene: “In times of crisis, cost-cutting is inevitable. Many CIOs are relying on a standard ‘IT diet’. The diet includes measures such as standardising technologies, centralising software licenses for economies-of-scale, freezing infrastructure overhauls, reducing external contractors, and the like. Still, at the same time, our interviewees are trying to keep a close eye on not cutting into the muscle whilst trying to remove the fat.”

And how do they know whether something is fat or muscle?

Viaene: “That was, indeed, a key question for our interviewees. This very question prompted our interviewees to elaborate on how they are working to further the relationship between business and IT. So, ‘muscle’ is clearly associated with a desire – and ability – to improve this relationship. In many organisations, the economic crisis has put considerable pressure on the CIO. Still, we have seen CIOs and CFOs who have moved beyond using mere short-term cost-cutting rationale to address the challenges that lie ahead. At the heart of our research report lies a theme-based compilation of best practices and insights that we’ve identified that help set the direction for a more effective engagement between business and IT.”

The report synthesises 4 business-IT engagement themes: bonding at the top, looking for benefits, serving professionally and engaging respectfully.

1. Bonding at the top

The turbulence in the business environment seems to be serving as a common enemy, forging business-IT unity rather than duality. Past efforts to develop enterprise architecture and road mapping are finally starting to really pay off as a lever for having that much needed dialogue among peers about the future of the enterprise and how IT can play its part.

2. Looking for benefits

When it comes to investment projects, there is a strong focus on establishing the real (or: added) value of prospective IT investments. Challenging has become the name of the game. Business cases are tested with the impacted stakeholders before seeking budgetary approval. This leads to more realism about the benefits and risks associated with these initiatives. It is clear for many business and IT leaders that the next logical step is to go beyond the promises of a business case.  This requires making sure that, after the project has been delivered, the expected benefits have truly been realised and that the underlying hypotheses have turned out to be realistic.

3. Serving professionally

A notion that featured prominently in the interviews was ‘operational excellence’, which refers to the quality and efficiency of the IT department’s service processes. Many participants pointed out the importance of having an intimate knowledge of the IT department’s cost base and being able to communicate this clearly to the business partners. Engagement between business and IT − bolstered by the availability of cost-to-serve information − can really be an eye-opener. When combined with benchmarks for other internal customers and the market, cost-to-serve information might also lead to more fruitful discussions, at the company level, about the advantages of scale and scope for the IT operation.

4. Engaging respectfully

All of the aforementioned themes require a high degree of communicative maturity in both business and IT leaders and staff. The engagement sought is characterised as being critically constructive, working towards pragmatic solutions to business problems, and following just enough process to guarantee professional execution. People in liaison roles between business and IT featured very prominently in the discussions with CIOs about what is truly the core of their operation. “My business analysts are my muscle,” was an often-heard statement.