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One criticism frequently aimed at the IT function within organisations is that it is too self-serving; but that perception is fading fast.
One criticism frequently aimed at the IT function within organisations is that it is too self-serving, that it fails to appreciate the broader business agenda. But, by many accounts, that perception is fading fast; the evidence is there to suggest that IT executives are busily engaging with units throughout the enterprise, looking at areas where they can add value and effectively bridging the traditional 'disconnect' that has existed between business and IT.
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Certainly delegates at Information Age's Effective IT Summit 2005 in London reported their IT departments were working much more closely with other business units, helping to overcome the mismatch between expectations and deliverables, and improving the credibility of IT within the organisation.
One example of this change is the online employee system developed by British Airways. In 2003, BA began a radical shake up of its internal staff systems with the aim of shaving £50 million off operating costs over two years. This was achieved by automating employee administration, directing all interactions through a single online portal.
And while much of the automation was to be driven by the use of technology, BA's CIO Paul Coby quickly established that he needed managers outside IT to help push through the change. One such sponsor was Bill Francis, employee self service (ESS) programme manager. "My background was managing the cabin crew side," Francis explains. "If I need to get into the technical side, I've got the IT guys working alongside me. The success comes from having that mix."
However, it is important that while the business helps shape the IT strategy, it does not prevent the CIO from leveraging technological innovation for the business's benefit. When supermarket giant Tesco took the plunge into Internet shopping, it decided from the start that its online service was best delivered though a standalone unit, Tesco.com. While the parent company runs its business mainly on mainframe systems, the online unit was able to choose lower cost servers; while Tesco tends to avoid Microsoft systems software, Tesco.com is more enthusiastic.
"Although we are separate, we work very closely with the 'mothership'," says Nick Lansley, new technologies manager, Tesco.com. To that extent, aspects such as branding, promotional offers and the store focus are all intended to convey a seamless online extension of Tesco's superstores, he adds. "Our role has been to see how new technology can deliver on age-old services issues." This approach has allowed Tesco to establish its credibility as an online grocer, while maintaining the brand values created through its network of supermarket stores.
This type of approach is typical of IT departments that are becoming more customer-centric says Chris Gill, regional vice president at printer maker Oki Systems. But while a greater degree of business focus may help the IT department to work effectively alongside the wider organisation, delivering value also depends on changing the approach to IT project management.
Through implementing an enterprise resource planning system across its European units, Oki has been able to dramatically reduce its manufacturing cycles. But this entailed forcing business units to standardise their business processes, rather than adapt the software to meet different local requirements. "Design by committee just doesn't work. You might need to get a number of interest groups involved, creating a local sense of project ownership, but you can't have local dynamics dominating central structure," says Gill. Driving that through needs board-level support, he adds.
It is this type of strategy that leads to simpler, more effective projects, says Paul Wybrow, chief technology officer at mobile operator Vodafone.
Technology projects are being presented to boards in a less complex and more business-like fashion, he says. "This is a cultural change we're seeing. IT is fundamentally about automating business processes, and you achieve that not by getting sidetracked with infinite technical details that add complexity."
However, despite being armed with a simpler, more customer-focused IT strategy, even the best laid plans can still come unstuck, says Vincent Bourne, infrastructure manager at broadcaster GWR Group. It is human nature to be resistant to any form of change, no matter how much apparent sense the proposed change can make, he explains.
GWR undertook a project to reduce costs through the introduction of a unified telephone and data system. The system allowed the radio group to cut operation costs, and provide a platform to distribute digital content. "But I was surprise how passionate people could be over an old telephone system. In the end, the people that will never go along with the project have to be taken out - in the nicest possible way!"
Much of the debate about how closely IT is aligned to the business stems from an uncertain economy: contracting budgets are forcing executives to wield greater control over IT expenditure. A true test of the alignment between business and IT will come when controls are loosened. The natural tendency to relax controls must be avoided, if the IT department is to shake off its spendthrift reputation. "That means continuing to make tough decisions," says BA's Francis.
