On August 24, 1994, Lyon, Popanz & Forester sponsored a Business luncheon for 16 senior Information Technology executives. The topic for the meeting was keeping information technology and corporate strategies aligned in a changing environment. We reviewed it in April 2008 and found it still valuable.

The meeting, like all Business Forum luncheons, had the free flowing format of a forum to examine ideas rather than the structure of a presentation seeking conclusions. This LPF update is an effort to capture the content of the meeting with the free-flow replaced by sufficient structure to move the reader from idea-to-idea. We want to acknowledge the participants for their contributions and we take full responsibility for the interpretation and transcription.

This material was published in Inside DPMA A Monthly Publication for DPMA and the Information Systems Profession -- October 1994, page 6 - 7.

Strategies are the medium that organizations use to communicate where they are going and how they will get there. In today's fast paced world, the substance of organizational strategies are found more often in the speaking and actions of executives and managers than in formal planning documents.

Strategies evolve in response to changing customer needs, new competitive opportunities and threats, and advances in management concepts. Two management concepts that are being incorporated in the strategies of many successful corporations are:

Customer driven plans and programs that incorporate the defined needs of external and internal customers in the design and delivery of products and services.

Collaborative or cross-functional management of projects and programs to assure that all appropriate resources of the corporation are brought to bear on major issues.

The evolving and changing nature of strategies and the difficulties of communicating in large organizations mean that all parts of the organization are challenged to stay aligned with the corporation's strategy.

IT's Challenges

Information Technology organizations-IT-have the challenges faced by most organizations plus some that are unique:

Changing computer economics, increasing computer literacy, dramatic advances in ease of use and the need to get computer systems online quickly and then change them frequently means that more and more users are assuming responsibility for their own information services. The general trend is toward "distributed processing."

New software does more, is easier to use, and offers the possibility of lower cost per unit of output, but software upgrades often require investments in larger and faster computers and enhancement of the corporation's data communications infrastructure. The evolution of computers has taken on a life of its own. Users are addicted to new, better and cheaper-no matter what the cost.

Information is being added to products and services to increase the actual and perceived value to customers. As an example, General Motors no longer just sells cars. It uses information technology to increase value-it offers loans and leases, promotes warranties and road side services and issues credit cards with rebates on future purchases.

Competitors are using information technology to improve products and services, reduce costs, speed delivery, and provide interactive links to customers for product information, orders, shipment status and payments. Even more challenging, companies from other industries are using information technology to develop entirely new products and services to lure away customers. In addition to supporting the information needs of internal users, IT is becoming a critical source of innovation to meet competitive threats and allow the corporation to pose competitive challenges.

The environment is changing. That change is making the effective application of information increasingly critical to the success of the corporation. How can Information Technology stay aligned with the corporate strategy to assure that the information being provided is the information that is required?

When strategies exist in the speaking and actions of executives, participation becomes the most effective form of communication. IT must be where it can hear what is being said and see what is being done. In many cases, IT must change its role in the corporation so it participates in the creation and evolution of strategy, so it can be aligned rather than struggling to get aligned.

IT's Changing Roles

As IT manages the changes required to meet the challenges of the changing environment, it must also manage changes in its role in the corporation. IT's role and the needs of the corporation are moving from the delivery of turn-key systems to the on-going integration of enterprise systems. In this evolving role, IT is concerned with both the management of technology and its effective application.

Management of Technology

The role of managing technology is driven largely by advances in technology and improving economics . IT must develop the strategy for the transfer of personal productivity/desktop systems and user specific applications to user organizations. Users have, or are rapidly gaining, the required expertise and IT has more important strategic roles to play. 

IT must provide central management of the information infrastructure to assure competitive costs, current and future integration, growth, maintainability, and appropriate security for systems and data. Operating units with P&L responsibility are rewarded for minimizing current costs. That often mean sacrificing future requirements for near term results. IT must provide the balance that assures that the strategic needs of the corporation are provided for.

The most effective way to manage information technology is to develop a carefully planned, well managed, rigorously implemented information infrastructure that provides the resources users need to create and operate their specific applications and exchange information within the corporation and with external customers.

One of the lessons of distributed processing is that the time and costs for integration and security can be very high unless an architecture for the information infrastructure exists before distributed systems are designed and implemented. Some experts even argue that it is often cheaper to rebuild than to retrofit. It is IT's role to design that architecture and then assist-or insist-in its application to existing distributed systems and in all new and enhanced systems.

Some of the technology for the information infrastructure is still being developed. Historically, technology was used first in government and other special applications and then moved into corporations when it was developed, tested and moved down the cost curve. Distributed processing started as simple, inexpensive applications that are now growing in complexity, risk and cost. There are no large vendors that have fully integrated solutions. Corporations therefore find themselves participating in the development and testing of new technology. Users do not have the time, skills or immediate economic incentives to participate in this process.

IT must develop the resources and expertise to participate in the evaluation of evolving infrastructure technology and balance the risks of selecting one solution versus another.

Applying Technology Effectively

To be effective in this role, IT must change its operating style. Legacy systems-main frame based systems-were largely developed in response to customer requirements. By the time requirements are clearly defined in today's markets it is too late for effective, competitive action. IT must:

Change its operating style from one of responding to users to one of participating in the solution of business problems.

Shift from a role of selecting technology that meets defined needs to participating in the creative give and take of integrating information technology into innovative solutions.

Be the major source of new information technology and a participant in its evaluation and application.

Moving to Participation

How does IT move from a role of responding to strategy to a role of participating in its creation? By developing a plan for change and then implementing it over time. How much time? If the process is driven by IT, it will have to be implemented in phases. Both users and IT staff members will have to be enrolled in the changes for each phase and then changes will have to be implement. The process will be evolutionary and sometimes slow. At the other extreme, an executive decision to reengineer the corporation will force very rapid change. The ideal change process would involve a single user or multi-function task force that provides an opportunity to make substantial changes rapidly in support of a limited application. That application can then be used as a model for other user/IT joint ventures. 

When strategies exist in the speaking and actions of executives, participation becomes the most effective form of communication. The plan-to be implemented at any speed- must be based on a clear definition of the current situation that can be defined with the following types of questions:

What parts of our information technology are working and should be kept?

What parts are not working and should be changed?

What parts are working and should be changed anyway?

Does IT understand the customers' business needs?

Is IT knowledgeable about where the business is going and how it will get there?

In a customer driven environment, the place to start is by asking the customers-the users of IT services-those questions. The customers to ask are those who:

Deal with IT and its services on a regular basis.

Can point at successes and failures and may have considered alternatives.

Have a stake in improved information services.

Understand the business needs of their organizations.

The next step is to bring the questioning process into IT. As objectively as possible, questions need to be asked to answer: How effective are we at providing customer services in an environment where participation is the most effective means of communication? Questions like:

Is the senior member of the IT organization a member of the executive team and an active participant in the evaluation of future opportunities, threats and programs to strengthen the competitive position of the corporation?

Do representatives from IT participate in the deliberations of the operating units that are responsible for the corporation's core products and services?

Are members of IT invited to participate on project teams for new products, services or procedures while issues and ideas are still in the formative stages?

Are members of IT recognized as significant participants in the development of effective solutions to business problems, e.g., ways to reduce costs, expand markets, shorten lead times or improve customer service?

Are members of IT seen as participants in the development or enhancement of applications and able to enroll users in improving security, using common systems to reduce acquisition and maintenance costs, incorporating standard user interfaces to reduce the costs of system development and user training, upgrading to more cost effective infrastructures, etc.?

Does IT provide management tools to assist users in planning, implementing and operating distributed systems consistent with the information infrastructure architecture?

Is IT recognized as the primary source for new information technology and its effective application?

Does IT participate in conferences, seminars and trade shows to stay current and benchmark systems and expertise?

Does IT participate in strategic alliances with vendors to share the cost of developing and testing new technology and its application?