Business executives are bullish on technology, write Alex Cullen and Alexander Peters, of Forrester Research. They see it as core to products and service, central to differentiation, and vital to their supply chain and distribution strategies. But while they view technology as critical to business success, they are less satisfied with the contribution of IT to the business.

The business does not perceive that IT is aligned around their priorities. In a Forrester survey, the only accepted attribute of effectiveness from IT is reducing the cost of operations. Furthermore, business executives see many alternatives to the IT department as their technology provider to business effectiveness, including their own staff using consumer-oriented tools and applications, to consulting firms, as well as software as a service.

Insights from the Forrester-CIO discussion:
• Formalise IT department’s role in firm’s overall planning process. Clearly defining IT’s involvement with and contribution to the firm’s planning process is essential. IT’s contribution to the enterprise, business unit and department plans must be viewed as value added to these plans, not just administrative -- providing information on how technology is being used and contributing to action plans to achieve business goals.

• Formalise and Expand the role of relationship managers. Relationship managers should have their role formalised to include linkage of IT and business strategy, identifying value-add opportunities and ensuring clear understanding of business priorities and IT‘s capabilities to address them. Business execs must believe that relationship managers are valuable partners and allies – and a part of the business executive’s ‘team’. Relationship managers must be able to call on other IT roles, such as architects, program managers and business analysts, as necessary to provide quality consultation to their business clients.

• Embed IT skills within business organisations. IT can foster a more collaborative working model with its business peers by embedding or co-locating IT staff within business areas. This is more commonly used for business analysts, business intelligence, and project managers – but Web 2.0 technologies such as wikis and mash-ups can increase both the need for and the business value of embedding skills.

• Create centres of excellence (COEs) for business change skills. One opportunity CIOs see for bringing additional value to their businesses is to be a source for business process improvement and change skills that a business area is not likely to have internally. Business process analysis, Lean and Six Sigma skills were noted as examples of skills that IT can build up and offer to business areas. Relationship Managers can use these skills to build a relationship about business improvement, not IT projects

• Structure IT to separate ‘Business Enablement’ functions from IT delivery and operations. Some CIOs in this group are changing their organisation so that business focused functions, such as those involved with business innovation, are organisationally separate from IT delivery and operations functions. Their goal is to ensure that each group can have clear and distinct goals and different work practices.

This last point is the direction Forrester believes IT organisations will embrace over time: creating separate groups for IT execution and for business enablement, making sure that they have distinctly different charters and goals. Business enablement includes business architecture, innovation, and synchronisation/alignment, all working under the direction of senior-level relationship managers. This could also be the home for business change skills such as Six Sigma. While today this structure may be seen as a variation and enhancement on ‘demand/supply’ organisational models, the range of skills, functions and value provided is greater than the typical ‘demand’ organisation – and may eventually even reside outside the domain of ‘traditional IT’..

Further reports from Forrester:

CIO Leadership Analysis: Toward the business governance of IT