Jan 01 2006

Get Your Ducks in a Row

Here is what you can do to ensure alignment and shore up IT's role in the business planning process.

Planning in a vacuum, lack of strategic direction and a culture that reacts only to the fire of the day: These are some of the top gripes from IT management at small- and medium-sized firms when it comes to technology's role in business planning.


Numerous lucky devils say that IT is considered essential to their business. But even then, most staffers would like more time and resources for better planning. According to a recent BizTech poll, 45 percent of small businesses report that IT figures prominently into their business development decisions. Yet the rest complain that their organizations treat IT like a necessary evil, albeit one that's consulted on a regular basis to fix broken tech gear.


"Don't even get me started on that one," says one IT manager at a small business. "Basically, IT is the fire brigade. We do what we're told to do and fix what needs fixing."



As businesses grow, their business-planning process evolves more out of growth pressure or organizational stress than by design. It's no wonder that at many firms IT plays the role of chief fire marshal. A planning process developed under these conditions oftentimes lacks multidimensional inputs, and in particular, may lack the participation of mission-critical areas of the business such as IT management.


Clearly, if your CEO sees the value of IT, you'll know it. IT is at every critical planning session, and the CEO sports a tattoo with your cell number on it. But, what if that's not the case? How can IT management get into the business-planning process to provide their value and expertise if they haven't yet been formally invited to the picnic? To achieve IT-business alignment and earn a seat at the planning picnic, senior managers at numerous small- to medium-sized businesses suggest focusing on three key areas: posting short-term gains, challenging entrenched thinking and focusing on their business' momentum drivers.


According to management guru Jim Collins, IT's strategic role in the organization is to accelerate, rather than create momentum. Therefore, while it's OK to be passionate about technology, IT leaders need to also express their passion for where the business is going. Don't get sucked into the vortex of "cool" technology without considering the real business objectives of improvements in profitability, performance and competitive advantage. No one cares about a hot technology, but your CEO will invest in brussel sprout-flavored lollipops if you can make the case that they'll cut costs or serve up an edge against the competition.


But understanding and focusing on the nexus of the organization's momentum is a difficult challenge. "It is not the responsibility of the organization to inform IT of the company's business," argues Bill Rosser, vice president and fellow at Gartner Group in Stamford, Ct. "Rather, it is the responsibility of the IT organization to understand the business. Only when IT understands the company's business objectives can it offer the organization the most appropriate solutions. Learning the economic model of the business and how other key functional areas are trying to dovetail with it is critical for any strategic partner, including IT. It should know where the business is growing and the processes that support that growth. Some are ripe for a tech makeover.


Some companies make a point of documenting their business goals; some don't. "It is IT's responsibility to dig for and define the business plan so IT projects can be aimed directly at the target," advocates Rosser. Some basic questions that will help IT understand and invest in strategic alignment are: What's the strategy for growth? What techniques will support growth? And what types of systems need to be in place to achieve these goals?


The point of answering such questions is to dig until the underlying principles and values have been exposed. It's good practice to understand linked causes and effects," Rosser concludes. "All IT decisions should link back through this chain."


In order to provide acceleration in a business, IT involvement must focus on meeting specific objectives or solving specific problems — not just providing a technological device. If you don't know what the firm's true objectives are, look around and see what makes the firm tick.


The Opportunity Advocate


Technology leaders must use clear, layman's language to establish credibility, but that must be based on understanding the functional areas of the business. It is imperative to remember that those to whom you wish to and must communicate with need you and want your advice, but they will never be able to use it if that advice is communicated in terms they perceive as coded or irrelevant to corporate objectives. Use the language of business, and in the right context. Understanding different functional areas, and how they work, will make it much easier to play the devil's advocate and challenge conventional thinking.


In organizations that get the value of strategic technology, like Harcros Chemicals Inc. in Kansas City, Kan., IT management looks at opportunities to generate new revenue, and improve the quality of existing revenue streams, as well as to reduce expenses.


"Given that IT is engrained in so much of what we do as a business, it is crucial that our IT department continues to understand both the marketing and logistical challenges customers present to our company," says Kevin Mirner, president and CEO of Harcros Chemicals. "Because of this, not only must they be involved in the execution of new projects, but more importantly, the planning phases as well, at times meeting with vendors, understanding new requirements and formulating a strategy to carry out these demands. Having IT involved in the early stages can save your business a lot of headaches in the long run."


"When we problem-solve, I always tell my team to start by asking 'What would happen if?'" says Jim Shanks, executive vice president of CDW Corp., a $6.3 billion technology provider. Strategic organizations also "have to get things done through others — the team — and give them the autonomy to do great things," he says.


Open-ended "what if" questions should spawn discussions about doing things differently and seeking out opportunities to improve the way things are done, Shanks says, and ultimately improve the quality of revenue. But he stresses that giving the opportunity-seekers and problem-solvers a stake in a project's outcome is also critical. "Ownership helps knock the ball out of the park," he says.


Those types of open-ended questions should spawn discussions about doing things differently and seeking out opportunities to improve the way things are done, and ultimately refine the quality of revenue is achieved.


Always Deliver


Attempts to create perfect plans out of perfect information are doomed to failure. Trying to foresee every possible outcome or method available isn't practical. Cut to the chase. What is important is that a sound, actionable decision is reached and then the strategic planning model is followed completely through its cycle.


There's a big difference between talking about doing things differently and actually following through with wins and truly actionable campaigns, says management expert Ram Charan, co-author of Execution: The Disciple of Getting Things Done with Larry Bossidy.


"Thoughtful execution is the key to transforming IT's perception and usefulness to the organization," Charan says. "The more you do, the more autonomy you're given. It's a signal of how things are going in terms of your progress."


Good IT insights should challenge the norm, but they should also focus on specific areas and deliverables. "Our research clearly shows a correlation between corporate profits and IT planning," explains Kay Redditt, president of CogniTech Services in Warrenton, Va. "Organizations become confident in IT when IT projects are delivered as expected, and expectations can only be met if they are well-defined up front."


This is closely linked to the confidence, or lack of confidence, that organizations have in their IT divisions. If transforming the perception of IT is a goal, delivering early wins and focusing on attainable results is critical.


"Know what is available, and take advantage of the technology in place," says Jeff Bowden, IT manager at Delmia Corp., a digital manufacturing tools maker in Auburn Hills, Mich. "IT is a cost of doing business, but it should be viewed as an investment, not as an expense," Bowden explains. "It may cost more money up front to put some changes in place, but over the long run [those changes can not only] save money, but [also] make the company more productive and generate more cash flow."




CEO Takeaway

Achieving alignment between your information technology team and your business goals will not only deliver more bang for your IT buck but also add a valuable contributor to your strategic planning team. Here's how to empower your IT leaders:

• Encourage the IT team to demonstrate short-term progress on current technology initiatives that can build organization-wide confidence in the team and improve its image.
• Add "what if" discussions to the strategic planning process and allow your IT leaders to challenge entrenched thinking with innovative approaches to critical business problems.
• Encourage your IT leaders to learn about and focus innovation on the key momentum drivers of your business.


Mike Sacco is the vice president of operations at Hickok & Boardman Insurance in Burlington, Vt.


Additional reporting by Jason Holbert and Scott Koegler.