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9/16/2004
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Executive Forum: Are You Aligned?

Tips for making sure your business and IT objectives are in sync--and stay that way.

The successful alignment of business and IT organizations is a powerful proposition, one that can help a company create and deliver long-term, sustainable, and scalable value. Constant awareness of how the operational strategies of the business are aligned with and supported by the IT team must be reinforced through the IT culture, the IT organization, and the actions and interactions in the day-to-day operating environment.

The first step in creating business and IT alignment is to develop and foster a culture that drives, reinforces, and rewards partnerships, meritocracy, and accountability. And the proactive commitment and sponsorship to take this necessary first (and ongoing) step has to come right from the top--the CIO, in visible partnership with the CEO, the CFO, the chief operating officer, and each of the senior business-function executives. Then it must be continuously cultivated and reinforced at all levels of the business, and within IT. This isn't always easy, but it's important.

The second step in creating alignment is to operate within an organizational structure that maximizes communication and value creation for the business. IT organizations should consider a model where there's a clearly identified, dedicated team whose role includes working directly with the business leaders. These "relationship managers" act as the primary liaisons with business leaders, defining strategies and tactics, aligning priorities for new or enhanced business capabilities, and planning and executing joint business and IT road maps. This model, when well executed, can be effective in continuously aligning, communicating, and delivering on the joint business and IT partnership activities required for success.

Another organizational consideration is the creation of an agile, flexible pool of delivery resources. This allows rapid and flexible resourcing of critical roles and skills--project managers, business consultants, systems analysts, programmers, and engineers--that always seem to be in higher demand than supply. This helps with both the rapid-cycle and iterative project demands of a business, and also enables the IT team to proactively rotate staffing assignments for employees through various skill growth areas. By deploying a strategy and cultural approach for leveraging talent on demand, IT organizations can realize a number of benefits, including accelerated project execution, increased IT productivity, quicker infusion of new technologies or techniques into the organization, and increased employee satisfaction.

Businesses need to govern IT project funding with structured flexibility, meaning they must take a decentralized funding approach that lets them align corporate strategies with business-unit priorities, thereby allocating an appropriate IT budget to each business unit. Then, governance teams, comprised of both business and IT leadership, can administer the priorities and investments. The key here is that governance teams are empowered to make decisions (up to a threshold limit), and these teams have shared accountability.

The joint management and governance of business-technology investments significantly improves the unpredictability in business spending and fosters a more timely and well-aligned approach to delivering greater value to the business. In addition, IT is better able to work with the business to balance project demand and delivery over the course of the year. This decentralized budgeting approach allows for integrated decision making between business and IT partners and streamlines the IT investment process.

Using quarterly metrics and a summary scorecard to measure progress against the business and IT objectives that have been set is a critical part of the equation for success. The most useful scorecards communicate the needs and progress to the organization in a simple and straightforward manner. The metrics should be able to quantify or illustrate key questions such as these: Is IT delivering the right value? Are we aligned with the business? Is IT delivering on key expectations (i.e., ROI, time to market, throughput, and quality)? Are our business partners satisfied?

At Harrah's, our scorecard is organized around the five key principles that make up our IT initiative: valued partnerships, the best people, leading capabilities, excellence in execution, and IT as a utility. The scorecard evolves annually as we evolve toward our goals. Ultimately, the scorecard is just a communication tool and a means to an end--delivering against our IT objectives--but it helps ensure that we're keeping our eye on the right continuous improvement areas and communicating both our progress and our improvement opportunities within IT and with our business.

Setting the strategy, planning the tactical road maps, executing against our plans, evaluating the results, and then making the needed course corrections along the way is what continues to help Harrah's align for success in IT--and within our business. This approach can help your business, too.

Tim Stanley is senior VP and CIO at Harrah's Entertainment Inc., No. 15 on this year's InformationWeek 500 list.


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