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Business Intelligence: How to turn it into information

In many cases, IT and the business side continue to battle each other for control. But technology, and changes in attitude on both ends, can help improve business-IT alignment.

There is a lot of talk about the need to align business objectives and the IT department, but enterprises are making little progress. Part of the problem is systemic to IT departments and technical people, but another part involves the business’ willingness to constructively engage with IT on a longterm basis.

In researching dashboard and scorecard applications, I’ve come across an inordinate number of companies in which business and IT are waging battle.

In most cases, problems arise because a business group needs to transition its highly successful dashboard project to centralized IT so the rest of the company can reap the benefits.

The business group is terrified about ceding control over the design, architecture and budget of its pet project to a central IT group, which it views as slow, incompetent and uncompromising.

The business sponsors cite numerous examples of IT ineptitude to reinforce their notions that the IT department will suck the lifeblood out of the project, leaving it to die a slow, inexorable death.

However, the IT group views the business as a spoiled child that wants what it wants when it wants it and won’t wait for IT to lay the necessary foundation to ensure the longterm success of the system. The IT group is also bitter because the business expects it to deliver an increasing number of high-priority projects faster while reducing costs, shrinking staff, standardizing suppliers and living under the constant threat of outsourcing.

The result is a tense standoff in which one group fulfills the other’s worst perceptions of the other. If the business has the upper hand, it will maintain control of the technical aspects of the project, creating another non-integrated system that will be costly to maintain. If IT gains control, it will halt development of new enduser functionality until it brings the infrastructure into conformance with its architectural standards.

So what can be done to slice through this Gordian knot? What will it take for both sides to enter into a relationship of mutual respect?

Like a marriage on the rocks, business and IT need some serious counseling before they can effectively work together. Part of the counseling involves taking a number of baby steps that improve communication and bridge mutual distrust by helping each side better understand the other’s challenges and dilemmas.

Counseling for IT
During the past 10 years, IT has come to recognize that its job is not to deliver technology for technology’s sake, but to provide exquisite service to its customer–the business. This is a step in the right direction for IT.

However, it’s only the first step. Verbal acknowledgement alone doesn’t translate into remedial action. To take the next step, IT must translate goodwill into action.

The following questions can help determine whether your IT team is merely talking about servicing the business, or acting on it. If you can respond positively to most of these questions, you’re on the right path.

Does your team:
• Read the same trade magazines as its business counterparts?
• Attend the same conferences as its business counterparts?
• Go to lunch regularly with its business counterparts?
• Read the company’s annual report?
• Read the short- and long-term strategic plans for your company?
• Understand the complete business process that encompasses the application it’s veloping?
• Have a majority of members with more than 10 years of experience in your company’s industry?
• Have a majority of members who have certifications as database administrators and master’s degrees in business administration?

What better way to align with the business than to eat, sleep and breathe like a business person? Unfortunately, the central IT department–by virtue of being a separate organization within the company–often functions as a subculture that operates by its own rules.

Central IT groups have their own jargon, incentives, reporting structures and career paths, which are different from those of the businesses they serve. In contrast, departmental or line-ofbusiness technical staff often enjoy a much healthier relationship to their business users than central IT does. Why? Rather than exist in a technical subculture, these embedded IT staff sit side by side with the business people and function as a single team with the same goals and ambitions. Strategy for collaboration I recently attended a presentation by an IT manager at a major Blue Cross Blue Shield organization who had developed a strategic plan designed to foster a more collaborative partnership with the business.

There are five key initiatives in his plan. One of the more innovative initiatives is the development of an application architecture that evaluates current and proposed business applications by both business fit, as defined by the business, and architectural fit, as defined by the IT group. Each group’s evaluation for all applications is depicted in an easy-to-read quadrant that plots business fit on the y axis and architectural fit on the x axis. (See Figure 1.) Applications in the lower-left quadrant are candidates for elimination or consolidation; those in the upper-right hand represent an optimal fit from both a business and technical perspective. Applications in the remaining two quadrants need modification before they meet either business or IT requirements for sustainability. The ongoing exercise of evaluating applications in this manner is a wonderful way for both groups to communicate their requirements and view them in a way that is complementary and interdependent. Although IT groups generally get most of the blame for the misalignment between business and IT, it takes two to tango, as they say.

Business shares equal blame for the frustration that it feels toward IT because it doesn’t always recognize how its actions and behavior have contributed to the problem. The problem with the business is that it changes too fast for IT to keep up. It harbors a short-term bias toward action and rarely takes a long-term view toward building sustainable value. This is especially true in U.S. companies, which are notorious for acting first and asking questions later.

Decentralized organizations magnify this behavior, parceling out authority to divisions and departments to make decisions faster and in the context of local markets. Although there are advantages to decentralization, there are drawbacks that contribute to the perpetual misalignment of the business and IT. The scores of analytic and operational silos, including the hundreds and thousands of pernicious spreadmarts that hamstring corporate productivity, are testaments to the business’ fixation with speed and decentralized decision making.

Project Prioritization
Finally, the business has the upper hand in its relationship with IT, and it often rules high-handedly and irresponsibly. In many organizations, executives threaten to outsource IT when it does not deliver sufficient value, rejecting how their own actions and decisions cripple IT’s ability to function effectively. The business often lacks a reasonable degree of restraint and discipline when it comes to IT projects. One IT manager I talked to recently said his company’s annual planning process is a sham because the business can’t discipline itself to live within its limits.

'At the beginning of every budget year, the business prioritizes IT projects for the coming year. Out of ninety projects, they score sixty of them as high priority, and we schedule them,' says the beleaguered IT manager. 'But even before January First arrives, the business adds 20 more high-priority projects to our list and adds another 20 projects before April. Then they tell us in March that we are already two months behind schedule!'

The IT manager said he had negotiated a new project prioritization process with the business that required the business to operate in a zero-sum environment. If it added projects after the budget, it needed to cut others. Although the IT manager was hopeful the new program would succeed, he also half jokingly commented that he may not be around in a year or two if he has to repeatedly tell the business to abide by the new guidelines.

Portfolio Planning
Another way to help the business live within its means is to establish an analytic applications portfolio that shows how IT can deliver a series of related applications built on a common infrastructure over the course of a condensed period of time, such as 18 to 24 months.

Jill Dyche, a partner at Baseline Consulting in Sherman Oaks, Calif., created a chart (See Figure 2) to help business executives understand the iterative process of building analytic applications and how they can accelerate the process if they want to pay the cost of creating parallel development teams. The chart shows executives that they can get everything they want by building on a common infrastructure instead of adopting the go-it-alone approach.

If they want their applications faster, they can pay for parallel development teams. This shields IT from accusations that it works too slowly, leaving decisions about speed and cost to the business, where they belong.

Conclusion
The ideal way to align business and IT is to combine knowledge of both disciplines in one person. While this type of individual is rare, we will increasingly see people with both business and technical literacies in the generations to come. Until that time, business and IT will be left to figure out strategies and techniques to collaborate better.

The key for now is to resist tendencies to cultivate a purely technical culture within central IT. The IT group must not be a cocoon for IT professionals to avoid the business users they’re trying to serve and to exist without knowing the strategy and processes their applications and systems are designed to support. At the same time, the business side needs to understand that although it may use its own money and technology to chase immediate opportunities, it needs to acknowledge these victories will be short-lived if it does not build enterprise resources on a solid foundation.

The good news is that during the past decade, we have made significant progress aligning business and IT.

However, we still have a long way to go.

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