TechWeb

Study: IT And Business Still Aren't Aligned

Feb 24, 2003 (07:02 PM EST)

Read the Original Article at http://www.informationweek.com/news/showArticle.jhtml?articleID=8700514


IT and business managers may work for the same company, but most of them don't seem to be on the same team, according to a report released Tuesday by Gartner.

About 65% of companies have either a negative or neutral view of the ability of IT and business managers to work together in supporting corporate goals and objectives, the research firm says.

It's not that companies aren't aware of the problem, says Jamie McCleary, a consultant for People3, the consulting unit of Gartner. "We're way past the point where IT is just a cost center," McCleary says. "People understand the competitive leverage they can get from a great IT function."

But the economic slump has directed funds toward projects that can increase sales or cut costs in time for the next earnings statement. Working on a tighter alignment between IT and business units tends to take a back seat.

"Given the budgetary restraints, people are saying, 'We should do it, I know we need to do it, we just can't do it right now,'" McCleary says.

But there are some simple and inexpensive steps companies can take. For example, they can take time to figure out the role IT should play within a marketing or sales campaign. A company can hire IT staff with a basic understanding of the business or educate staffers.

"We're not asking IT to be cross-functionally competent in everything," McCleary says. "But they should at least have an understanding of the business objectives."

For example, if sales and Web designers are working on a project, the designers have to understand marketing techniques that are effective in generating leads. "They shouldn't be asked to be tactical experts, but they need to provide feedback, from a technical perspective, that can help in what's trying to be achieved," McCleary says.

As many companies are learning, IT can no longer focus solely on processing transactions, such as orders over the Web or through system-to-system technologies, such as EDI or XML. "The requirement now is they have to move up the business chain and become strategic partners," McCleary says.

The Gartner report also recommends that companies develop, either through recruitment or training, IT staff with "behavioral competencies." This means IT staff needs to develop skills similar to technicians working for consulting firms. In-house staff should have a customer-service orientation and strong communication skills.

A study released last year by MIT's Sloan School of Management drew similar conclusions. That study found that while IT can improve a company's productivity, the real gains came from combining IT investments with "organizational capital," which was defined as the investments companies make in corporate culture and organizational practices.

Companies that invested in both IT and organizational capital were more productive, the MIT study found, and had much larger market capitalization than those that didn't.