VideoRarely has a topic engendered so much agreement yet so little progress as IT/business "alignment." Last year it topped the priority list among members of the Society for Information Management (SIM), a professional organization of CIOs that has been actively studying the issue for three years and extolling its importance for longer than that. And earlier this year, the sixth annual "Technology Issues for Financial Executives Survey," conducted by Financial Executives International (FEI) and Computer Sciences Corp. (CSC), found alignment very much on the minds of CFOs, with companies that considered themselves "aligned" reporting a high return on their IT investments more than twice as often as those that don't (24 percent to 10 percent).
Advising CIOs and CFOs as to how to achieve alignment is a consuming, and lucrative, interest of academics and consultants. But what does alignment actually look like? Most agree that it entails a defined IT strategy that's in sync with corporate strategy. Given that 60 percent of the FEI/CSC respondents said that their organizations have no strategic IT plan, that's one place to look.
But there are others. A long-term study begun in 2001 by SIM in conjunction with The Conference Board found that while many companies have created liaison positions to bridge IT and business units, most of the time the people who occupy those positions tend to communicate IT information to business units and vice versa, rather than to develop meaningful ties between the two. Often, the report says, IT is viewed as a separate career path within companies, with little managerial rotation through IT or encouragement of talent transfer between IT and business units. IT tends to be viewed as an enabler of strategy, but not a driver.
The study, directed by Jerry Luftman, executive director of Graduate Information Systems Programs and Distinguished Professor of Information Systems at Stevens Institute of Technology, in Hoboken, N.J., recommends that the role of liaison evolve from communicator to relationship-builder; that better metrics be adopted to measure IT; that IT be included in strategy-setting; that specific technologies, including data mining, supply-chain management, and others, be exploited for their business value; and that career-development programs be established to encourage job rotation and IT-business crossover.
Clearly there is a long way to go. Only 7 percent of the FEI/CSC respondents said that their company's IT plan is fully aligned with corporate strategy, another 30 percent could point to some alignment, while the remaining 63 percent reported none at all.
The Complaints You Never Hear
It's tax time again, and while that naturally gets everyone's blood boiling, Intuit Corp. hopes the level of ire is a little lower this year. Last year, when customers encountered some features that displeased them (primarily having to do with antipiracy safeguards), they promptly flooded online forums with complaints and threatened a boycott. Intuit managed to smooth those ruffled feathers, and in the process learned a hard lesson about the growing power of the Internet to tarnish reputations. The company now monitors various Websites to make sure it isn't hearing criticisms—or outright falsehoods. It did take last year's complaints to heart, making a number of changes to its TurboTax products, including a feedback mechanism that allows customers to communicate confusion or displeasure directly to the Intuit employee responsible for whichever part of the program is in question.
Intuit spokesman Scott Gulbransen admits that it can be time-consuming to monitor online sites, but says the effort is worth it. Academic researchers now study the phenomenon of online reputations, and the discipline may represent an important frontier for companies intent on better customer service. As Gulbransen notes, "Many people don't like to call and complain," but will happily type away tirelessly. The Pew Internet and American Life Project found that 83 percent of Americans with Web access have researched products online.
Will IT Be a Bonus Baby?
While capital spending has been recovering for the past two years, it still lags the levels seen in 1999 and early 2000. A tax break that expires at the end of this year may help alleviate that. Written into the Jobs and Growth Tax Act of 2003 (HR 2), it piles "bonus" depreciation onto the normal schedule that governs capital spending, allowing big first-year write-offs for money spent on IT and other assets brought online by December 31, 2004.
That's the date the provision expires, which is why many experts predict a year-end buying spree. Given that IT accounts for a sizable chunk of capital spending at companies large and small (and in fact a separate provision in the act gives an additional depreciation break to small companies), it's no wonder that Merrill Lynch economist David Rosenberg told the Baltimore Sun late last year that he expects the tax break to be "wildly stimulative" this year, and compared it to a potential Y2K.
But the break applies to a range of items other than IT, everything from security systems to office equipment. Some experts suggest that with software and hardware continually improving while dropping in cost, companies may look to leverage the tax break on other areas. The Congressional Budget Office expects the act (which includes many provisions beyond the bonus-depreciation perk) to increase the federal deficit by $350 billion over 10 years. Supporters argue that it will create jobs.
Reader Comments» Post a comment