With every dollar cut from corporate budgets, alignment between business goals and IT activities becomes increasingly important. “I don’t understand how you could possibly leverage IT in the business without dealing with the issue of alignment,” says Jan Duffy, an analyst with Toronto-based IDC Canada.
CIOs know this. Yet many have found alignment difficult to achieve. For some companies, it is simply a matter of tradition: IT is viewed as a service organization that’s brought in only when something is broken. In others, the gulf between IT and the various business units is too wide to bridge easily; because of poor communication or mistrust, IT and business have trouble getting on the same page.
In still other organizations, business units have competing goals and agendas, and line-of-business heads are reluctant to compromise for the greater good of the company if it comes at their departments’ expense. And nobody wants to surrender a share of the power to the tech guy. In these situations it falls on the CIO to prove that his department has both the technical know-how and the business savvy to anticipate business needs and translate them into IT systems-no easy task.
But what if alignment could be made painless? That’s the mind-set driving two CIOs in very different companies: Christine Modie at Springfield, Mass.-based Massachusetts Mutual Financial Group, and Sheleen Quish at U.S. Can in Lombard, Ill. Each has independently developed a rankings “game” that taps into colleagues’ natural bent for problem-solving while channeling departmental competitiveness for the greater good of the company.
Quish’s game gets business managers to prioritize the company’s IT needs themselves, while Modie focuses the attention of her IT staff on solving business problems. And although neither CIO claims to have solved the alignment enigma completely, both have found their rankings processes to be effective at bringing together the business and IT.
Open Up the Playbook
Modie joined MassMutual as executive vice president and CIO in October 1999, just in time to shepherd the insurance and investment giant through Y2K. Once the millennial dust had settled, she embarked on an ERP project to replace the HR and finance modules, which took her through the end of 2001. But when she hired a consultancy to conduct post-ERP project interviews with 60 managers of business lines and functions from across the company, she had a rude shock: The anonymous responses revealed that nobody liked IT.
Furthermore, these business execs didn’t think IT employees were qualified for the work required of them. What the results boiled down to, says Modie, was that IT was viewed as a cost center without much benefit.
“It took us a while to get through the how-could-they-say-this-about-us phase,” she says. “But we eventually moved on to evaluate what kind of actions we needed to take. We decided we had to open up the ‘black box’ and let them know more about what we were doing.”
Modie instituted a series of initiatives aimed at alignment. She had two goals: Make her IT organization more aware of business needs, and second, boost the IT group’s credibility within the company by communicating the positive impact it was already having.
In February 2002, Modie challenged her 1,500 employees to each come up with an idea that could help the company. They responded with more than 2,000 suggestions, ranging from the small-cancel a weekly meeting that wasn’t doing any good-to the really significant, such as consolidating multiple contracts with a single vendor and getting rid of old systems rendered unnecessary by new ones.
Modie’s IT leadership group, comprising her top 200 managers, spent a month sorting and prioritizing the ideas by aligning them with feedback from the anonymous interviews. Modie calls the results her playbook. By the end of the first quarter of 2003, the IT leadership team had generated 197 “plays”-91 of which had been implemented, with the remaining 106 projects in the works.
The playbook has done much to further alignment between IT and the business side, Modie says. Simply by focusing on ways to help the company, her IT staff has become more attuned to business needs.
In terms of communicating the IT department’s benefit to the business, nothing spoke louder than the money saved from instituting playbook projects-$12.6 million in just over one year. (Modie posts a giant thermometer-like display chart on her IT dashboard to keep track of the savings and to remind employees of the task at hand.)
The results of the playbook have gotten the attention of Modie’s fellow executives, who are seeing that IT can make real contributions to the company rather than simply draining funds. Modie recently completed another round of interviews with business-side managers, which, she says, confirm the positive results of her alignment process.
Stop Spinning Plates
U.S. Can’s Quish developed some of her management skills as a mother of two. When her children were teenagers, she recalls, “They would say, ‘Mom, I want to stay out till 1 a.m.’ I would say, ‘I will give you three choices: 10, 11 or 12.'” Having choices, she realized, was the key to making difficult situations easier.
While CIO of The Signature Group, a Schaumburg, Ill.-based insurer, in the late ’90s, Quish applied that lesson to her interactions with the various business heads. Each year the process for allocating IT work at Signature was an aggravating, everyone-for-himself affair. The IT department would be flooded with project requests, only a fraction of which could conceivably get done. Then at the executive-level meeting to determine the lucky few, the divisional heads would fight tooth and nail for their projects. Everyone hated the whole thing.
“It was like spinning plates,” says Quish. “I was trying to figure out a process that would engage people-how I could get people to write things down, to separate the pieces and get a direction.”
Ultimately she came up with a rankings game that got business execs playing as a team instead of competing. Quish carried that scheme to U.S. Can when she joined as global CIO in December 2001. She is also VP of corporate marketing.
Whenever a business unit employee submits a project request-whether for a tweak to an existing app or something as big as a new ERP purchasing module-he has to provide basic information about the project. This includes an ROI figure, if one exists, and a designation of which of four corporate objectives the project addresses: increased revenue, reduced cost, improved customer service or a stabilized environment.
There are three parts to Quish’s alignment process. The objective of the first phase is to mesh the corporate goals with divisional goals. Business leaders, including the CEO, COO, CFO and line managers, gather around a table to rank the four corporate priorities from highest to lowest current priority. The execs indicate their choices out loud, for everyone to hear.
The results are tallied and averaged. Then the same procedure happens with the divisional goals. The executives and business managers rank the divisions from highest to lowest priority. The results are tallied on a flip chart and opened for discussion, which concludes only when everyone agrees that the goals are ranked in the proper order.
In the second phase, Quish categorizes the IT project proposals submitted-using the priorities set by the executives-as must-do, should-do or nice-to-do. This can be a scientific assessment or an approximation; at Signature, Quish developed an algorithm to determine the hierarchy, while at U.S. Can she just eyeballs it. The important thing, she says, is that she use the business leaders’ consensus to make informed decisions.
For example, the company’s number-one priority in 2002 was to reduce cost, according to the rankings game, and the most important division was domestic aerosol. Not surprisingly, a new money-saving warehouse man- agement system for that division was deemed the company’s most important IT project.
Once she has ordered the projects, Quish takes the list back to the executive team for a final review. Out of 236 proposals presented in 2002, 100 made it on the to-do list. U.S. Can was not able to fund all 100, but the alignment process makes it clear to everyone-in IT and the business units alike-which projects are the highest priority.
For Quish and Modie, their rankings processes are a way to get their IT staffs and the business units to see eye-to-eye. “Alignment is an acknowledgment that IT is an equal player,” says IDC Canada’s Duffy (IDC is a sister company to CIO’s publisher). “IT has to speak the language of business. The business side has to acknowledge the centrality of IT.” If an alignment game works, says Duffy, then by all means, keep playing-because everyone wins.