A recent article in Harvard Business Review (“Radically Simple IT,” March 2008 Issue) advocates that Business and IT shouldn’t just be aligned, they should be “forged together.” One way the authors say you can do this is by having the CIO report directly to the CEO or COO, not the CFO. While we have seen this reporting structure in many of our client organizations, it does not automatically mean that IT and the business are “forged together,” or even aligned for that matter.

Certainly the Business Analyst (BA) role has done much for crossing the chasm, in both directions, for IT and the business. And where we see the most successful financial systems implementations is where there is that Finance/IS role acting as the BA. But still not a guarantee for a meeting of the minds.

We propose some “better” practices for closer IT/Business Alignment based on our 200+ client engagements over the last 20 years.

1. Start with Corporate Strategy and Objectives

It sounds all well and good, but many IT organizations miss this. We must directly correlate any and all IT initiatives with the overall Corporate strategy. IT should be able to show a “drill path” from Strategy, through Objectives, into Initiatives and on to metrics and data. For example, let’s say your company objective is 15 % year-over-year profitable revenue growth. This is a meaty one with several parts:

• Revenue Growth (sell more stuff)
• Profitable Revenue Growth (sell more stuff and make money doing it)
• Continuous profitable revenue growth (do the same year-over-year)

So how does one or more (hopefully many) IT initiatives help promote selling, product expansion, reducing cost of goods, and supporting a pipeline of innovation to feed the out-years? If you show multiple correlations from many systems to many strategic objectives, you are more aligned.

2. Take a holistic view

Usually, one part of the business, a function such as Marketing, Operations, or HR, comes to IT with a business problem to solve. For example, Sales would ask “we need more visibility into customer profitability to find out if any customers are costing us money.” It is IT’s job to take the enterprise-wide view of this problem. Who else needs to see this information (customer support, product development, marketing)? How will this information be made “actionable” so we can watch trends over time, adjust for seasonality, compare with forecasts, and eventually fire our unprofitable customers? When Sales approaches IT, IT takes the request as an enterprise request, not a Sales request.

3. Highlight the requirements gap

IT organizations usually do a very good job of gathering user requirements, data models, source system availability, etc. These are “bottom-up” requirements. Many times we see a lack of insight into “top-down” requirements: what are the line-of-business owners and functional executives looking for? Business/IT alignment happens when the BA looks into the gap between bottom-up and top-down. We did a large enterprise-wide financial system implementation for a Fortune 500 holding company – it was grueling, but in the end worked according to spec and added tremendous value to the company (it had a net positive impact on EPS). When we went to the CFO to tell him we were in production, he wanted to know where his spend-analysis was. This was never in the spec. Big gap, low alignment.

4. Have a long-term road-map into which short-term initiatives fit

Designing, building, and rolling-out systems (and processes for that matter), without a long-term IT road-map is a

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