Maligned, misaligned or both?

For years, observers of IT in practice have talked about the business-IT divide, and bemoaned its damaging effects on the many, many organisations affected. And almost universally, they have put the blame squarely on IT, rather than business.

These IT managers, it is charged, do not fully understand business or its methods and terminology; they use too much techno-babble, often using this to shield the shortcomings of their department; they are lured into a self-serving alliance with their suppliers and consultants; they fail to align their departmental objectives with those of the business; and they have poor project management skills. The list goes on.


In practice: GlaxoSmithKline

The pharmaceuticals giant GlaxoSmithKline (GSK) has recently had to take some strong medicine of its own. As is often the case, a mismatch between IT practice and business goals only really came to light when things started to go wrong. “During the late 1980s and early 1990s,” says Gary Aldam, GSK’s R&D Business Projects programme manager, “our Zantac treatment was the world’s biggest selling drug, and we had money coming out of our ears. This meant we didn’t always pay enough attention to the detail of project management.”

But when GSK’s Zantac patent expired, and the repercussions of Glaxo Wellcome’s merger with SmithKline Beecham began to take effect, the lack of project funding brought a lot of people up short. In particular, says Aldam, “there was a perception abroad that IT wasn’t delivering”, and it was a perception that was difficult to counter because “we didn’t measure it.”

So out went a management credo that said projects were successful if they met their own deadlines, and in came a new policy based on the explicit identification of real business benefits.

Medical scientists, business executives and IT professionals have had to work effectively in multi-disciplinary groups, and to accept common disciplines; and it has required senior management to take on the responsibility of “sponsoring” or leading these teams with utter seriousness.

Above all, everyone taking part in a GSK project of any kind now accepts the primacy of first agreeing a business dependency framework (BDF) that defines the goals of every project strictly in terms of business benefits. It then demands that they adopt a business dependency network (BDN), which explicitly links each element of a project to defined business goals, and ensures that these goals remain consistent and are not overlooked or forgotten as a project progresses.

It has been a tough method to deploy; many projects which have not met the strict benefit driven criteria have been abandoned. But it has been worthwhile. Under its new regime, which requires that all IT projects are really ‘business projects with an IT element’, GSK has redesigned its drug regulation submissions system, developed an electronic laboratory notebook system that improves the capture of valuable intellectual property at source, and is now redesigning its entire clinical administration system.



The impact of these management failures is clear for all to see: expensive project failures – sometimes catastrophic and headline making, more often chronic and demoralising; mistrust and an over-cautiousness about new investment, resulting in lost opportunities; and, above all, waste – of resources, time and money.

But there is a serious problem with this analysis: it no longer appears to be the case that senior IT managers are to blame for most of the problems caused by the misalignment of business and IT – even if this was once true. And that means that if there is still a business-IT divide, and it is still causing problems, then other explanations and solutions need to be found.

The evidence for this assertion is three-fold. The first involves simply looking around: throughout Europe and North America, there are now dozens of executive level CIOs, many of whom have been profiled in magazines and spoken at conferences, who have clearly demonstrated their ability to straddle the IT-business divide. These include Paul Coby of British Airways, Robin Barret of American Express, David Weymouth of Barclays, Ford Calhoun of GlaxoSmithKline and many, many others.

Two recent pieces of research have backed up this perception. CIO Connect, a UK networking organisation for IT directors, recently interviewed 100 CIOs, of whom 80% said that IT spending approval is largely subject to the same processes as other business projects, and three-quarters of respondents said that senior business colleagues are closely involved in managing significant implementations.

The report concluded: “The gap between IT and other parts of the business, which has been a feature of business for so long, is now finally closing. IT is ceasing to be something separate that has to be treated differently, and is instead becoming an integral part of business change.”

This research was partially confirmed at a unique seminar for both business and IT managers recently organised by Information Age, BMC Software, and Cranfield University (see below). At this event, most participants agreed that IT spending approval is increasingly subject to the same scrutiny – if not more security – as other areas of the business. And most said that, in recent years, greater efforts have been made to control IT spending and tie it into business objectives.

But does that mean the business-IT divide is disappearing? Not at all. When both IT and business managers were asked to score their organisations’ performance on five key metrics of alignment such as ‘How well do you monitor and evaluate business benefits from IT investments?’, the average score was 4 on a scale of 1 to 7; but in a smoothly run business, it should be between 6 and 7.

Further discussions revealed a startling array of ways in which the IT departments and the business objectives were not clearly aligned; and in many, if not most of these areas, the business side – and not the IT side – were mostly responsible.

Take just two examples: managers were asked ‘How well do you monitor and evaluate the business benefits from IT investments?’


In practice: BMC Software

With businesses spending less on IT in 2003, times were naturally hard at systems software vendor BMC. So, like a lot of its customers, the company decided to look for savings in the IT department. “I was told to cut $10 million out of my budget for the rest of the fiscal year,” says Jay Gardner, BMC’s chief information officer.

For a lot of CIOs that would have meant closing down projects, cancelling planned upgrades and working with HR to reduce headcount. Then there would have been a year of keeping things ticking, instead of delivering new services and increasing efficiency for the business, followed by a big catch up operation when things improved.

But Gardner, who spent 20 years in the business before crossing over to IT, was ready with a business analysis case of his own. “I explained to our management executives what the likely impact of such a cut was going to have on our ongoing projects. After I’d finished, all the business VPs at the meeting stood up and volunteered to cut their own budgets and to transfer that money to IT.”

Gardner’s ability to properly brief his management executive on the consequences of cutting IT spending was not just down to his native business nous. Over the past several years, BMC has put considerable effort into ensuring that business and IT are driven by a common goal, and speak a common language.

Starting with aligning business and IT, says Gardner, BMC now applies business strategy and revenues goals to all its IT projects. When it began this policy, there were 155 IT projects on the go. Once these were evaluated along real ROI-lines, and a cross-discipline project management office created, there were only 27 left.

Since then no IT policy is allowed to exist independently of a clearly articulated business requirement. Service level agreements, for instance, are not expressed in terms of downtime or transaction throughput, but in terms of end-user or customer satisfaction levels. Indeed, according to Gardner, at BMC there are only business projects that involve IT.

The benefit of this cultural revolution is now beginning to show itself. As well as giving Gardner the ability to head off knee-jerk assaults on this budget, he believes the whole company has benefited from the greater understanding and awareness that exists on each side of the IT divide.

Says Gardner: “When we began this [business-IT alignment effort] only 9% of IT spend went on new projects. Now 35% of budget goes on new development.” Business is feeling 100% of the benefit of that, he says.



They gave an average score of 2.8 out of 7, with even very highly regarded, blue chip IT using organisations admitting that those benefits so rigorously identified at the outset of a project are almost never measured. One delegate described benefits as “anecdotal”, another as “a new word in our organisation” and another said that “our business managers have little or no interest in benefits tracking”.

Another example: delegates were asked ‘How rigorous and effective is your project approval process?’ Again, there was a clear contrast between a highly disciplined approach and a completely undisciplined, almost whimsical approach. In several cases, both approaches were evident in the same organisations, with delegates describing how certain high level executives took sudden decisions that bypassed, over-ruled or rendered meaningless existing and carefully agreed projects.

The key finding: The business-IT divide of modern folklore – which causes so many projects to go awry and which causes so much internal friction and waste – still exists. But the true, underlying reasons are very different from those commonly cited.

Three common patterns of behaviour were identified at the recent seminar. First, the historical failure of IT departments to deliver promised benefits, and especially the recent excesses of the dot-com period, has engendered a deep mistrust of the IT function in many organisations. This is compensated for in many ways, including very tight control of expenditure and projects, as well as a reluctance by business managers to stake their reputations by getting too involved in IT-based projects. Frequently, now, IT managers feel themselves to be victimised, undervalued and over-scrutinised – in short, not just misaligned, but maligned.

Second, many of those business managers who have become involved in IT projects do not necessarily impose the same disciplined approach they have for so long castigated their IT departments for lacking.

And third, it is apparent that both business and IT side managers lack the tools and the processes to work together on a project from start to finish. That, in particular, means they have almost no way of measuring to what extent an IT investment is contributing to business objectives after it has begun.

What is the remedy? One starting point is to use some of the available tools and processes. One, the Cassandra methodology, developed at Cranfield University, seeks to identify business objectives, whether financial or not, and link them to IT investments at every stage of a project. This is now used in several organisations.

But the tools themselves are clearly only a part of the solution. One of the most frequently cited fears of many managers is that a rigid focus on return on investment can limit an organisation’s speed of reaction and agility. How many top managers, when pressed on this, are willing to forego their right to make investments on gut feeling in favour of a painstaking benefits analysis?

There is no easy solution to this. However, one first step would be to ensure that all investments, whether gut feeling or painstakingly planned, are subject to a post-implementation benefits analysis.

A few forward looking companies have actually taken the first steps towards this by appointing a Benefits Realisation Manager – a specialist who attempts to ensure that the promised benefits from any IT projects are not only measured, but that efforts are made to ensure they actually happen.


The Mind The Gap project

In April 2004, Information Age, in conjunction with the Cranfield School of Management, BMC and Gartner, invited senior business and IT managers to discuss the issues surrounding business and IT alignment in an off-the-record executive seminar in London.

Some of the findings are represented in the ‘spidergram’ represented here. It shows that, in spite of many efforts to overcome the problem, IT and business remains poorly aligned in most organisations. In particular, it is clear that most managers have a dim view of their own organisation’s ability to effectively monitor the continuing benefits of their IT investments.

In spite of expectations to the contrary, managers from the IT side and from the business side had an almost identical view of their own business’ performance against these metrics. Information Age also collected anonymous comments from some of the delegates. Some of these were:

  • “The business side is keen to be involved in, and drive, IT projects – due to a lack of trust in IT’s ability to deliver”

  • “The business initiates most IT projects, but participation decreases as the project moves forward.”

  • “Benefits are well defined, but they are not converted to real benefits, rather than theoretical. They are never proved”.

  • “Our business managers have no interest in benefits tracking.”

  • “There is currently little or no monitoring of benefits after implementation”.

    Free places

    As part of the Mind the Gap programme, Information Age has negotiated four free places for readers at a one-day practical workshop to be held at Cranfield University later this year. At this event, sponsored by BMC and led by the Professor of Information Systems Chris Edwards, participants will be invited to build their own models for linking their IT investments with business performance, using a technique developed at Cranfield called Cassandra.

    For more details, send an email to Tim Langford, the publisher of Information Age, at



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    Ben Rossi

    Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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