INFORMATION TECHNOLOGY

Interview: CIOs and the Importance of Alignment

July 12, 2006

Michael Friedenberg is CEO and president of CXO Media Inc.,
an IDG company that develops strategic media properties and executive programs for corporate officers who use technology to thrive and prosper in this new era of business. Outside the walls of CXO Media, Friedenberg is a frequent guest speaker at many industry conferences and user events for companies including IBM.

Performance Perspectives from Cognos, an IBM Company editor Delaney Turner spoke with Friedenberg about the findings of CXO Media's recent study, The Role and Influence of the 21^st Century CIO.

Aligning IT with business goals a top priority

DT: Your survey shows a key priority for CIOs for 2006 is aligning IT investments with business goals. To what degree would you say that they're successful?

MF: "I think in certain pockets they're doing extremely well, and in certain pockets – either due to culture, process or just overall industry pressure, they could be doing a lot better. But overall, compared to where the community was five years ago, it's a vast improvement.

Now, any initiative that the IT organization is working must be connected to a business goal. It's essentially nailed to the CIO's forehead."

Increasing "business readiness"

DT: Are there some technologies that CIOs are looking to over others to help them increase alignment? Which technologies are they relying on?

MF: "I put them into a broader theme of 'business readiness.' I think companies are really looking for IT to do business in a way that is responsive to their customers in a much more flexible and nimble manner. So you're looking at virtualization at the data center, you're looking at business intelligence – not only to make sure they have control over information, but to make it into knowledge.

You're looking at a lot of middleware that is increasing the speed at which information travels through an organization. That's where SOA is a much more common topic. Security is absolutely still top of mind because of the customer risk issues that reside around identity theft.

There's also deflationary technologies that deliver improved performance at a lower cost. Anything from open source to virtualization to thin computing."

CIOs need core business skills

DT: CIOs live in two different worlds – there are internal stakeholders they need to satisfy, and relationships with external vendors they need to manage. What kinds of skills do they need to make sure they're successful?

MF: "What we're finding is that CIOs are very focused on developing managerial and leadership qualities as opposed to the traditional technology experience. Being a good communicator, and proper project and process management skills are absolutely essential. The ability to not only communicate, but to understand different business disciplines – marketing, accounting, customer demands, supply chain. Those are the core areas where CIOs are really being asked to step up."

Research shows business intelligence a priority

DT: Let's get back to aligning IT and business goals. At Cognos we see the most successful BI deployments being those that involve IT and business users from the start. From your perspective, how important is business intelligence to CIOs?

"It's essential. And it's show up in our research as the third most important technology that CIOs are investing in. If you look at the top issues that CIOs have – integration, or workflow and business process management – BI is starting to incorporate those much more."

DT: It sounds like CIOs view business intelligence as a much more dynamic application than simple reporting.

MF: "They do. Reporting is still very important. It's table stakes. But CIOs want to look beyond their reporting structures toward gaining more efficiencies, increasing velocity, building insight. It's much more of a strategic conversation."

Balancing risks and rewards

DT: Let's change the topic slightly. At Cognos we say that business intelligence gives people the information they need to make decisions. How would you describe your own decision-making process?

MF: "I look at a risk analysis and an opportunity assessment. It can be for anything from buying a car to recently joining CXO Media. You need to weigh the risks and rewards. And I think any business decision should be weighed accordingly by what is the impact and investment needed to pursue this or not to pursue it.

You also need to do it quickly because sometimes in most new markets, first in usually wins: if you're first to a market, you win. That's why some organizations rely on the '80 percent and go' rule. I'm a big believer that if you wait until you're 100 percent certain, the opportunity has passed or a competitor has beaten you to market."