I read this interesting article today on gantthead.com. In their 2007 Survey of CIO’s they found that only 20% of CIO’s felt their IT organization and services were aligned with the organization. I find that to be an amazing statistic. So 4 out of 5 companies have an IT shop that is not pursuing projects that add significant (if any) value to the business! According to the article, this is why the CIO’s have difficulty measuring the ROI on their projects. These CIO’s get paid how much to pursue projects with no ROI?
It certainly doesn’t have to be that way. There is no shortage of project portfolio analysis software which companies can use to make sure they’re investing in the right projects. By right, I don’t mean whatever is the flavor of the month. I mean projects that are aligned with the corporate goals and that have been estimated and determined that the payback will meet a corporate hurdle rate for to be given the green light.
Doing some further reading I noticed the comment from one reader on the original CIO survey page who was asking if only the IT leaders would allow the business leaders to assign the priority of the IT departments so that it aligns with the business plans and initiatives. You mean actually have the needs of the business drive IT priorities? What a novel concept! I’m actually amazed that it happens any other way.
It’s very typical for corporate leaders to struggle with decisions on which projects to fund without a documented submission and approval process and a pre-defined objectives and weighting system that green light projects that are most aligned to the corporate goals. Using portfolio analysis software obviously isn’t the only magic bullet required to achieve perfect alignment of IT projects to business goals, there are many other factors as well.
However, as shown in the CIO survey, anything that can help you achieve greater alignment will be worthwhile. CIOs who said they were aligned with the business reported that IT had enabled a new revenue stream more than twice as often as those CIOs who said they were not aligned (24 percent versus 11 percent). More important, more aligned CIOs said they had used IT to create a competitive advantage for the company than unaligned CIOs (38 percent versus 23 percent).
Now those 1 in 5 CIO’s are earning their pay!