Aligning IT with the Business

By Ed Carroll, Sales Executive, Agilis Systems

“Programming is easy!” says the CIO of a major Portland corporation when talking about the structure of his team. “I need business people on my IT staff,” implying that he does not worry about their technical skills. He says he needs people who can grasp the needs of the (other) business people throughout his company. “It is imperative,” he says, “that IT aligns itself with the business.” CIOs in today’s market put a couple of stakes in the ground in an effort to align their corporate IT strategy with those of the rest of the business.

Aligning IT with the business
Many CIOs say that if they are to implement any new software application it will be a commercial-off-the-shelf (COTS) package, and there will be no customization allowed. CIOs do not buy on impulse, but insist that the (other) business leaders own the IT purchase decisions by setting priorities and making choices through a thorough vetting process. Once a business has made a software decision, CIOs insist upon fast, commodity solutions--no more drawn-out evolutionary projects.

These strategies may seem harsh, but I believe almost every CIO in town would echo the same sentiment. Far too often, IT projects hold a company hostage, languishing far beyond their promised delivery dates and costing much more than the allowed or approved budget.

Poor project success

A recent study by Capers Jones compared data from 250 large software projects completed between 1995 and 2004, and found:

“… about 25 were deemed successful in that they achieved their schedule, cost and quality objectives. About 50 had delays or overruns below 35 percent, while about 175 (70 percent!) experienced major delays and overruns, or were terminated without completion.”
(http://www.stsc.hill.af.mil/crosstalk/2004/10/0410Jones.html)

With such failure rates, it seems hardly extreme to take a strong stance in order to ensure success. Capers Jones goes on to conclude that there are six major factors noted at opposite ends of the spectrum in terms of success versus failure.

These strategies seem to be focused on making it hard to change. I wonder about this, because if there is one thing that I have learned about business, it is that things change, and successful companies flex, change, evolve and morph along with the marketplace. Second, every marketing department of every successful company I know of is working hard to differentiate itself from the competition. Differentiation is often the critical factor in the marketing plan to grow revenue for any company.

A good measure of a COTS solution is one that meets a high percentage of the needed requirements, out of the box. If that is 70 percent, 80 percent or even 90 percent, what do the remaining unsatisfied requirements represent? Do they perhaps represent the uniqueness of the company, those characteristics that will differentiate the company in the marketplace?

Effective planning, etc.
How would I square with this contention? Certainly I would not suggest a return to the wild days of no-control custom software development. Capers Jones’ statistics hold real personal meaning for any CIO. If that CIO wants to keep their job, they had better deliver successfully on every project they undertake. As a prominent CIO once said, “If project goals are not met, whether it’s a project within the department or from an outside vendor, it’s the CIO’s head that gets chopped off.”

The thing I don’t hear in the IT strategies of today’s successful CIOs is an understanding and commitment to the kinds of conclusions formed by Capers Jones;

“… successful projects have effective planning, cost estimating, measurement, milestone tracking, change management and quality control processes.”

What the CIOs seem to be saying instead, is that they will hedge their bets by always buying COTS--in essence, waiting until the product is developed by someone else. Is this a bad strategy, to let the other guy swallow the delays and overruns? Not at first glance ... but what about when the company needs to flex, change or morph with the marketplace? What about the company’s unique success critical differentiators?

Focusing your IT team
Is it wrong to align IT with the business by building an IT team made up of people who are more business savvy and less technology skilled? Certainly not, if internal IT is not building software. However, the answer must go deeper than that and it makes a significant difference where IT puts it focus.

These IT strategies are good, as far as they go. However, with the team focused on business needs, it means that the team is not focused on software engineering processes, including effective planning, cost estimating, measurement, milestone tracking, change management and quality control. An IT team might perform these tasks in some fashion. But without real focus, how can they perform these essential processes well enough to be ranked in that top 10 percent of teams that consistently achieve schedule, cost and quality goals?

Selecting the right service provider
I suggest that CIOs modify their strategies just a little, to allow IT to respond to market demands, or to automate that uniqueness.

Do not change the focus of the internal IT team: Keep them closely aligned to the business and implement those COTS solutions to solve 70 percent of the business requirements. However, use the same diligence, the same thorough vetting process, to identify a service provider that can deliver solutions that will flex with your business and that has demonstrated effective project planning, cost estimating, measurement, milestone tracking, change management and quality control processes.

Conclusion
Just as CIOs are focusing their teams at their businesses, there are other companies whose business is to deliver projects on plan, without overruns and of the highest quality. A partnership strategy with a company that is focused on effective software-engineering and project-management processes can help the business to flex, change and morph as the marketplace flexes, changes and morphs--or to create automation that can provide significant market differentiation.

About the author
Ed Carroll has been building software products for more than 20 years, with particular expertise in automating economic analyses, decision support and supply-chain management processes. He is currently a sales executive with Agilis Solutions and has provided strategic technology leadership in roles such as the vice president of engineering for Egghead.com, director of technology at Nike and director of software engineering at Boeing. He can be reached at EdCarroll@AgilisSolutions.com.