Trust and Partnership E-Book

Robert J. Benson

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley CIO
• Sprache: Englisch

Seitenzahl: 834

Veröffentlichungsjahr: 2014

Beschreibung

Proven methodologies to enhance business value by exploiting thelatest global technology trends and best business and ITpractices There is no doubt that a tidal wave of change is hitting thearea of business technology; new business models are forming aroundthe cloud, new insights on how an enterprise runs is being aided bymining massive transactional and operational data sets.Decision-making is becoming almost prescient through new classes ofdata visualization, data analytics, and dashboards. Despite thepromise of technologies to make a difference, or perhaps because ofit, IT organizations face continued challenges in realizingpartnerships and trust with their business partners. While many books take on elements of these emerging developmentsor address the stubborn barriers to "real" partnership, none makethe practices involved fit together in a highly effective fashion -until now. Strategic IT Management in Turbulent Timesreveals how this framework ensures that organizations make theright strategic decisions to succeed in times of turbulence andchange. * Draws together authors with global experience including theAmericas, Europe, Pacific Rim, and Africa * Offers a comprehensive framework for IT and business managersto maximize the value IT brings to business * Addresses the effects of turbulence on business and IT * Focuses on developing partnerships and trust with business With practical examples and implementation guidance based onproven techniques developed by the authors over the past twentyyears, Strategic IT Management in Turbulent Times considersthe challenges facing today's enterprise, IT's critical role invalue creation, and the practical road map for achieving strategicIT management competencies.

Leseprobe

CONTENTS

Cover

Series Page

Title Page

Copyright

Preface

Part One: The Challenges

Chapter 1: Business and IT in Turbulent Times

Turbulence and Uncertainty Challenge Enterprises

This Is Not about Alignment (Entirely)

The Problem of Business and IT Relationships

Strategic IT Management Changes the Mental Models about IT in the Enterprise

To Whom Are We Writing? Who Is Our Audience? Whose Mental Models Are We Changing?

Notes

Chapter 2: The Barrier

Trust and Performance Are Highly Correlated

Trust and Partnership Are Highly Correlated

Context and Performance Affect Trust and Ability to Partner

Trust and the Total Value Performance Model

Trust and Governance

A Case of Broken Trust

The Role of Executive Leadership

Notes

Chapter 3: A Staircase to Trust

What Is Trust?

Dimensions of Trust

Trust Improves Business Performance

Can Trust between Business and IT Be Built?

Personal Trust versus Organizational Trust

Maslow's Hierarchy of Needs and IT

Business Requirements for Total Value Performance

How Does Trust Affect IT Strategy in Turbulent Times?

Producing Business Outcomes—An Assessment

References

Notes

Chapter 4: IT Strategy in Turbulent Environments

Change and Turbulence Defined

How Do Organizations Cope with Change and Turbulence?

Assessing Turbulence in the Enterprise

Organizational Capabilities and Environmental Turbulence

How Do IT and IT Management Cope with Turbulence and Change?

Producing Business Outcomes Despite Turbulence and Uncertainty: An Assessment

References

Notes

Chapter 5: Turbulence in Information Technology

History of Technology Turbulence

The Impact of Technology Turbulence

Enterprise Implications Based on Turbulence in IT

Technology Turbulence Assessment

References

Notes

Chapter 6: The Effects of IT Sourcing

The IT Services Supplier as a Strategic Concern

Strategic IT Outsourcing

The Impact of Trust and Turbulence

Looking Ahead9

References

Notes

Part Two: Principles for Transforming Business in Turbulent Times

Chapter 7: Requirements for Strategic IT Management

The Impact of Turbulence and Trust

The Impact of Turbulence

The Impact of Trust

Turbulence and Trust: Requirements for Business–IT Partnership

Demand and Supply Management of IT

Demand and Supply Impact on Outsourcing

To Conclude: The Need for Relational Governance

Self-Assessment: IT Competencies

Notes

Chapter 8: The Service Relationship

IT Is a Service Business

Service Performance Is the Foundation for IT Credibility and Trust

IT Service Management Is Critical

So What?

Conclusion and Scorecards

Scorecard Evaluation20

Notes

Chapter 9: The Partnership Relationship

Reasons for the Business–IT Partnership

Defining the Business–IT Partnership

Dealing with Culture, Behavior, and Silos

Implementing the Business–IT Partnership

Engaging the Business

Implementing Partnerships Requires Agreement on Roles for the Partners

Is This a Real Problem?

“Teaming” Is the New Partnership

Partners Exist at Every Level

Summary

Partnership Scorecards

Notes

Chapter 10: The Leadership Required

Goal #1: Leadership Is Required for Partnership, Trust, and Common Goals

Goal #2: Leadership Requires Leaders—and a Good Understanding of the Leadership Requirements

Goal #3: The Requirements for (Proactive) Transactional Leadership

Goal #4: The Requirements for Transformational Leadership

Goal #5: Leadership Is Earned through Credibility, Trust, and Culture

Leadership Scorecard

Notes

Chapter 11: Enterprise IT Capabilities

Connecting IT Value, IT Competence, and Enterprise IT Capabilities

Connecting IT Capability with IT Methodologies and Processes

Breaking Down the Barriers between IT and Business: Enterprise IT Capabilities

Enterprise IT Capability Overview

The Core Ideas for Enterprise IT Capabilities

Assessing Enterprise Performance against Requirements

Reviewing the Initial Enterprise IT Capability Assessments

IT's Capability to Change: The IT Dynamic Capability

Reference

Notes

Part Three: The Road to Strategic IT Management

Chapter 12: Strategic Enterprise IT Capabilities and Competencies

Enterprise IT Capability: Planning & Innovation

Strategic IT Management: The Systemic Capabilities for Producing Outcomes for Planning & Innovation

Strategic IT Management: The Business Outcomes for Planning & Innovation

What Is the Current Status with Planning & Innovation?

Planning & Innovation Scorecard

Bottom Line: Planning & Innovation Performance

Notes

Chapter 13: Tactical Enterprise IT Capabilities and Competencies

Enterprise IT Capability: Information & Intelligence

Enterprise IT Capability: Development & Transformation

Enterprise IT Capability: Service & Resource Optimization

Summary: Tactical Enterprise IT Capabilities and Competencies

Notes

Chapter 14: Operational Enterprise IT Capabilities and Competencies

Enterprise IT Capability: Service & Operational Excellence

Enterprise IT Capability: Sourcing

Enterprise IT Capability: Cost & Performance

Summary: Operational Enterprise IT Capabilities and Competencies

Notes

Chapter 15: Managing Complex Business–IT Relationships

Clear Strategic Positioning

Formal Organizational Arrangements

Trust

Notes

Part Four: Next Steps

Chapter 16: What Should Be Done?

Applying Frameworks to Describe the Enterprise

The Power of Frameworks

Organizational Context

Turbulence and Change

What Needs to Be Done?

Summary

Notes

Chapter 17: Requirements for CIO and IT Leadership

Message #1: The CIO and IT Managers Have Important “To Do's” on Their Lists

Message #2: The Business–IT Partnership Requires CIO and IT Management Leadership

Message #3: Enterprises Need Strategic IT Management and Enterprise IT Capabilities

Message #4: The CIO Needs to Manage the Technology Well; This Is Necessary, but Not Sufficient

Message #5: Authority, Control, and “Reporting to the CEO” Are Not Sufficient

Message #6: Be Faster; Be Flexible

Message #7: An Active, Proactive Leadership Approach Is Required, with Clear Vision

Conclusions: For the CIO, What Does Strategic IT Management Offer?

Notes

Chapter 18: Requirements for CEO and Business Leadership

Message #1: The Enterprise Needs Strategic IT Management

Message #2: Strategic IT Management Requires CEO Leadership for Organizational Context, Culture, and Change

Message #3: The CEO Provides the Enterprise Leadership to Generate and Actively Communicate the Business Vision and IT

Message #4: The CEO Builds and Supports the Environment for Partnership, Teamwork, Collaboration

Message #5: The CEO Builds and Supports IT Governance as Critical to Change Management

Message #6: Engage the CMO, CFO, and Board in Strategic IT Management

Message #7: Good IT Is Necessary; Do Not Accept Poor Performance

Messages to Business Managers and Professionals

Concluding Message to the CEO

Self-Assessment for Business Leadership

Notes

Chapter 19: Reflections and Recommendations

Summarizing the Enterprise IT Capabilities and Their Importance

The Bottom Line

About the Authors

Index

End User License Agreement

List of Illustrations

Exhibit 1.1

Exhibit 1.2

Exhibit 1.3

Exhibit 1.4

Exhibit 1.5

Exhibit 2.1

Exhibit 2.2

Exhibit 2.3

Exhibit 2.4

Exhibit 2.5

Exhibit 2.6

Exhibit 3.1

Exhibit 3.2

Exhibit 4.1

Exhibit 4.2

Exhibit 4.3

Exhibit 4.4

Exhibit 5.1

Exhibit 5.2

Exhibit 5.3

Exhibit II.1

Exhibit II.2

Exhibit 7.1

Exhibit 7.2

Exhibit 7.3

Exhibit 7.4

Exhibit 7.5

Exhibit 7.6

Exhibit 7.7

Exhibit 7.8

Exhibit 8.1

Exhibit 8.2

Exhibit 8.3

Exhibit 8.4

Exhibit 8.5

Exhibit 8.6

Exhibit 8.7

Exhibit 8.8

Exhibit 8.9

Exhibit 8.10

Exhibit 8.11

Exhibit 8.12

Exhibit 9.1

Exhibit 9.2

Exhibit 9.3

Exhibit 9.4

Exhibit 9.5

Exhibit 9.6

Exhibit 9.7

Exhibit 9.8

Exhibit 9.9

Exhibit 10.1

Exhibit 11.1

Exhibit 11.2

Exhibit 11.3

Exhibit 11.4

Exhibit 11.5

Exhibit 11.6

Exhibit 11.7

Exhibit 11.8

Exhibit 11.9

Exhibit 11.10

Exhibit III.1

Exhibit III.2

Exhibit III.3

Exhibit 12.1

Exhibit 12.2

Exhibit 12.3

Exhibit 12.4

Exhibit 12.5

Exhibit 12.6

Exhibit 13.1

Exhibit 13.2

Exhibit 13.3

Exhibit 13.4

Exhibit 13.5

Exhibit 13.6

Exhibit 13.7

Exhibit 13.8

Exhibit 13.9

Exhibit 13.10

Exhibit 13.11

Exhibit 13.12

Exhibit 13.13

Exhibit 13.14

Exhibit 13.15

Exhibit 13.16

Exhibit 13.17

Exhibit 14.1

Exhibit 14.2

Exhibit 14.3

Exhibit 14.4

Exhibit 14.5

Exhibit 14.6

Exhibit 14.7

Exhibit 14.8

Exhibit 14.9

Exhibit 14.10

Exhibit 14.11

Exhibit 14.12

Exhibit 14.13

Exhibit 14.14

Exhibit 14.15

Exhibit 14.16

Exhibit 14.17

Exhibit 14.18

Exhibit 14.19

Exhibit 14.20

Exhibit 14.21

Exhibit IV.1

Exhibit IV.2

Exhibit IV.3

Exhibit IV.4

Exhibit IV.5

Exhibit IV.6

Exhibit IV.7

Exhibit IV.8

Exhibit IV.9

Exhibit IV.10

Exhibit IV.11

Exhibit IV.12

Exhibit IV.13

Exhibit IV.14

Exhibit IV.15

Exhibit 16.1

Exhibit 16.2

Exhibit 16.3

Exhibit 16.4

Exhibit 16.5

Exhibit 16.6

Exhibit 16.7

Exhibit 16.8

Exhibit 16.9

Exhibit 16.10

Exhibit 16.11

Exhibit 16.12

Exhibit 16.13

Exhibit 16.14

Exhibit 16.15

Exhibit 16.16

Exhibit 16.17

Exhibit 16.18

Exhibit 16.19

Exhibit 17.1

Exhibit 17.2

Exhibit 17.3

Exhibit 17.4

Exhibit 17.5

Exhibit 17.6

Exhibit 17.7

Exhibit 17.8

Exhibit 17.9

Exhibit 17.10

Exhibit 17.11

Exhibit 17.12

Exhibit 17.13

Exhibit 18.1

Exhibit 18.2

Exhibit 18.3

Exhibit 18.4

Exhibit 18.5

Exhibit 18.6

Exhibit 18.7

Exhibit 18.8

Exhibit 18.9

Exhibit 19.1

Exhibit 19.2

Guide

Cover

Table of Contents

Preface

Part 1

Chapter 1

Pages

iii

iv

xiii

xiv

xv

xvi

xvii

xviii

xix

xx

xxi

xxii

xxiii

xxiv

1

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

183

184

185

186

187

188

189

190

191

192

193

194

195

196

197

198

199

200

201

202

203

204

205

206

207

208

209

210

211

212

213

214

215

216

217

218

219

220

221

222

223

224

225

226

227

228

229

230

231

232

233

234

235

236

237

238

239

240

241

242

243

244

245

246

247

248

249

250

251

252

253

254

255

256

257

258

259

260

261

262

263

264

265

266

267

268

269

270

271

272

273

274

275

276

277

278

279

280

281

282

283

284

285

286

287

288

289

290

291

292

293

294

295

296

297

298

299

300

301

302

303

304

305

306

307

308

309

310

311

312

313

314

315

316

317

318

319

320

321

322

323

324

325

326

327

328

329

330

331

332

333

334

335

336

337

338

339

340

341

342

343

344

345

346

347

348

349

350

351

352

353

354

355

356

357

358

359

360

361

362

363

364

365

366

367

368

369

370

371

372

373

374

375

376

377

378

379

380

381

382

383

384

385

386

387

388

389

390

391

392

393

394

395

396

397

398

399

400

401

402

403

404

405

406

407

408

409

410

411

412

413

414

415

416

417

418

419

420

421

422

423

424

425

426

427

428

429

430

431

432

433

434

435

436

437

438

439

440

441

442

443

444

445

446

447

448

449

450

451

452

453

454

455

456

457

458

459

460

461

462

463

464

465

466

467

468

469

470

471

472

473

474

475

476

477

478

479

480

481

482

483

484

485

486

487

488

Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the United States. With offices in North America, Europe, Asia, and Australia, Wiley is globally committed to developing and marketing print and electronic products and services for our customers' professional and personal knowledge and understanding.

The Wiley CIO series provides information, tools, and insights to IT executives and managers. The products in this series cover a wide range of topics that supply strategic and implementation guidance on the latest technology trends, leadership, and emerging best practices.

Titles in the Wiley CIO series include:

The Agile Architecture Revolution: How Cloud Computing, REST-Based SOA, and Mobile Computing Are Changing Enterprise IT

by Jason Bloomberg

Architecting the Cloud: Design Decisions for Cloud Computing Service Models (SaaS, PaaS, and IaaS)

by Michael Kavis

Big Data, Big Analytics: Emerging Business Intelligence and Analytic Trends for Today's Businesses

by Michael Minelli, Michele Chambers, and Ambiga Dhiraj

The Chief Information Officer's Body of Knowledge: People, Process, and Technology

by Dean Lane

CIO Best Practices: Enabling Strategic Value with Information Technology (Second Edition)

by Joe Stenzel, Randy Betancourt, Gary Cokins, Alyssa Farrell, Bill Flemming, Michael H. Hugos, Jonathan Hujsak, and Karl Schubert

The CIO Playbook: Strategies and Best Practices for IT Leaders to Deliver Value

by Nicholas R. Colisto

Enterprise Performance Management Done Right: An Operating System for Your Organization

by Ron Dimon

Executive's Guide to Virtual Worlds: How Avatars Are Transforming Your Business and Your Brand

by Lonnie Benson

IT Leadership Manual: Roadmap to Becoming a Trusted Business Partner

by Alan R. Guibord

Managing Electronic Records: Methods, Best Practices, and Technologies

by Robert F. Smallwood

On Top of the Cloud: How CIOs Leverage New Technologies to Drive Change and Build Value Across the Enterprise

by Hunter Muller

Straight to the Top: CIO Leadership in a Mobile, Social, and Cloud-based World (Second Edition)

by Gregory S. Smith

Strategic IT: Best Practices for Managers and Executives

by Arthur M. Langer and Lyle Yorks

Transforming IT Culture: How to Use Social Intelligence, Human Factors, and Collaboration to Create an IT Department That Outperforms

by Frank Wander

Trust and Partnership: Strategic IT Management for Turbulent Times

by Robert Benson, Pieter Ribbers, with Ronald Blitstein

Unleashing the Power of IT: Bringing People, Business, and Technology Together

by Dan Roberts

The U.S. Technology Skills Gap: What Every Technology Executive Must Know to Save America's Future

by Gary J. Beach

Trust and Partnership

Strategic IT Management for Turbulent Times

Robert J. Benson

Pieter M. Ribbers

with Ronald B. Blitstein

Cover image: © iStock/PixelEmbargo

Cover design: Wiley

Copyright © 2014 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone] or fax [phone].

Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.

Library of Congress Cataloging-in-Publication Data:

Benson, Robert J.

Trust and partnership : strategic IT management for turbulent times / Robert J. Benson.

pages cm. – (Wiley CIO ; 575)

Includes bibliographical references and index.

ISBN 978-1-118-44393-4 (cloth); ISBN 978-1-118-85350-4 (ebk); ISBN 978-1-118-85352-8 (ebk)

1. Information technology–Management. 2. Strategic planning. 3. International business enterprises–Communication systems–Management. I. Title.

HD30.2.B4577 2014

004.068′4–dc23

2014005245

Preface

We began this book with the goal of describing information technology (IT) and business1 solutions to turbulence and uncertainty, while at the same time finding solutions to the weak relationships and frequent mistrust that exists between IT organizations and their business “partners.” We presumed these problems were rooted with the IT management and its governance processes; therefore, our Strategic IT Management solution would be better IT processes and organizational structure. Examples of these “better” processes include strategic IT planning, scenario planning, portfolio management, project development, and operational excellence, all of which we discuss in Part III. We characterize them as basic competencies every enterprise needs in order to cope successfully with turbulence and uncertainty. However, this is an overly IT-centric and very mechanistic view of the problems and their solutions.

As we worked through the book, we realized that the lack of trust and ineffective business–IT partnerships—together with systemic turbulence and uncertainty—are really the fundamental problems. These must be understood before we can begin to discuss how to improve the management and governance processes. Consequently, we describe (and justify the need for) a set of Strategic IT Management capabilities as building blocks for partnership and trust as well as a means to provide solutions for turbulence and uncertainty. We thought we had zeroed in on our target. However, the road to this book proved more circuitous.

The problem proved to be much more fundamental. Partly, the silos separating IT and business are an issue; Ron Blitstein talks about “breaking down the barriers” between the two. More fundamentally, though, the problem transcends IT and is actually an enterprise problem. Consequently, the Strategic IT Management solution is a systemic enterprise solution, engaging business and IT in partnership. We characterize the solution as a set of enterprise IT capabilities, bringing together business and IT and (perhaps as importantly) challenging both to view their world from the other's perspective. In particular, IT needs to embrace the business view fully, as it participates in the enterprise to deliver powerful IT capabilities that represent new sources of business value. And by the way, when we say “IT,” we do not mean just “the” IT organization; we mean all sources of IT to the business, including the “IT organization” but also the in-business IT activities, sourcers (e.g., cloud), and “do-it-yourself” IT. Our definition of IT spans the value chain of the enterprise—from raw materials to cash, from content creation to cash, and from service design to cash. All streams are comprehended.

Through our personal experiences (as consultant, CIO, professor) we've come to understand that we're dealing with business functions and IT organizations as well as individuals, collectively as cultures and individually in terms of personal behaviors and beliefs. While improved management and governance processes may be critical in their own right, our objective is to create partnership, trust, and joint actions that can accelerate the needed organizational responses to business turbulence and change. This new foundation allows the full realization of IT's transformative power on the business.

We believe the nature of economic, societal, and, accordingly, business turbulence is fundamentally different than we have seen in the past. This brings new levels of uncertainties that alter the environment and place demands on all concerned. These heightened demands require new levels of speed and adaptability for both IT and business. This combination of culture/organization, turbulence/uncertainty, and speed/adaptability is something of a perfect storm that can either invoke damage control behaviors or unleash the grace and speed of surfing for a management team. Our book reflects a choice: Maintain the status quo or change. So while Strategic IT Management does indeed ultimately consider the mundane things like planning, portfolio management, project development, and operational excellence, among many other things, it does so in this significantly different context, a quickly and continuously changing business landscape. In response, Strategic IT management offers a different perspective. Ours is a holistic enterprise view that encompasses the actions required by all parties to deliver Enterprise IT capabilities that are necessary for success.

Strategic IT Management meets a critical need. From the IT perspective, much has been written elsewhere about the future of IT, the IT organization, and, by extension, the CIO. A lot of this information has a “strategic” bent—exploring how various technical and organizational future trends will transform the business, its IT, and the CIO. IT, of course, can be transformative to the business. Certainly IT, the CIO, and the IT leadership team face significant changes.

While this description may seem primarily focused on IT, we treat the business side as “co-dependent”—an equal partner and an equal contributor to the problems, as well as their solutions. The explosion of information and IT opportunities, and the means for acquiring them, demands an effective enterprise management framework. Thus the CEO, business executives, and leadership teams have responsibilities for change as well. This merger of business and IT responsibilities is the intention for Strategic IT Management.

It cannot be said that business–IT relationship is in good shape now. In fact, inadequacies in IT management practices often prevent the evolution of trust, competency, and confidence that is required to build effective, enduring, and resilient business relationships.2 Please note that business management does not escape scrutiny; there are plenty of gaps and necessary improvements in business attitudes and practices as well. This joint responsibility is an important and parallel theme of the book.

The book's subtitle is to Transform Business in Turbulent Times. This is a bit misleading, for our focus is on enabling the business (and government) to adapt successfully (and continuously) to turbulent times. This surely has some considerable transformation in it—but the point we make is not based on a perspective of strategic planning toward specific new business opportunities. Rather, it is the perspective that planning (and everything else) has to occur under conditions of turbulence and change. Unlike other books, we do not intend to inventory all the possible sources of turbulence or the menu of possible business and IT responses; others do this well. We start with these opportunities as a given; the problem here is exactly how business and IT executives will deal with these opportunities successfully. So while “transformation” is in the picture—and transformation is certainly occurring—it is a consequence of turbulence, not a traditional catalog of possible business and IT innovations.

Strategic IT Management is about the seven critical enterprise IT capabilities every business and government organization must have, especially under conditions of turbulence. It is about the environment of trust, partnership, and leadership required for success. These core capabilities are particularly necessary today, as turbulence and change increasingly characterize the landscape for businesses, governments, and the global economy. It is a handbook for both IT and business professionals expecting to enhance shareholder value and to do so while recognizing IT as a full partner in achieving competitive and mission performance goals, achieved in the face of increased turbulence and uncertainty.

Strategic IT Management enhances the enterprise's systemic capabilities for exploiting IT. It not so much a set of methodologies; rather it is a set of mind-sets, mental models, and management commitments to creating the environment in which the potential of information technology is fully exploited by the enterprise. It moves IT and the enterprise from reliance on individual capabilities and efforts—its heroes and gurus that have singlehandedly moved the enterprise's IT forward—to reliance on partnership, trust, and individual managers and professionals with the skills to work in this new context. Individual technical and business skills remain important and need to be upgraded; we provide the roadmap. Overall, Strategic IT Management upgrades the ability of the enterprise as a whole to cope with rapid change, business environmental challenges, and turbulence. Strategic IT Management also upgrades the ability of individual managers and professionals to contribute significantly to the success of IT in the enterprise.

What is new about this book? Among the three of us, we have read hundreds of books on management theory, IT's role in the enterprise, and so on—all the “classics”—and countless journal articles and doctoral dissertations on the subject of business and IT. They have all made great contributions, so it is a challenge to do more. What is new here?

We define the firm's IT capability as an organization-wide capability that depends on competences of both business and IT functions. As a consequence, creating business value with IT is an enterprise-wide responsibility, where business and IT functions have their distinct roles to play.

We understand that turbulence, change, and transformation are occurring rapidly, and are a critical component of enterprise management challenges. We also understand that IT is both a consequence (providing responses to turbulence) and a cause (creating new opportunities, new transformations).

3

We establish the fundamental importance of trust, partnership, and leadership. This is equally a business and IT issue, and affects every manager and professional.

We address business and IT issues as a holistic enterprise issue. At the same time we emphasize the need for effectively dealing with the silos of individual business units and their distinct requirements for IT.

We apply IT in a business service framework with the attendant business-oriented Service Management implications.

We emphasize strengthening the relationship between business and IT. This is done in trust/partnership terms as applied in seven enterprise IT capabilities.

We address the increasing turbulence in IT, its effects on organization, the emergence of new IT sources, and the rapid evolution of new business capabilities and hence demands on IT. Our slogan here is “dynamic IT capability,” an IT requirement.

We provide a wealth of self-assessment tools to permit the reader to apply the concepts of Strategic IT Management to his/her enterprise, together with a clear roadmap for addressing the self-assessment results. These tools and roadmaps are simple and practical. They also apply to every reader by providing individual self-assessment.

We understand that IT governance is woven through every aspect of Strategic IT Management. While we do not have a governance chapter, the business-engagement, decision-making, and organizational issues of governance are discussed throughout.

Who is our audience? Business and IT, CEOs, CIOs, and all level of management. This is not a “role of the CIO” book; it is about how everyone in the enterprise plays the roles needed to create business value and respond to turbulence and uncertainty. So, in effect, we're writing to the enterprise in describing the systems capabilities it requires; we're also writing to every individual involved, suggesting that all stakeholders—both business and IT—get their collective and individual houses in order in these difficult and challenging times.

Important Message to the Individual Reader

This book talks about large-scale ideas such as enterprise-wide issues, organization, and culture. It has, for example, chapters for the CEO and CIO. The primary messages seem to be targeted on the enterprise as a whole, for example, “Enterprise IT Capabilities.” However, the individual reader—perhaps a project manager, a student, a business supervisor—should ask “How does this apply to me?” More the point, “What can I do? What should I do? What's the lesson I should be learning?”

The answers: The individual reader should think about the skills and capabilities he or she has or needs to develop, particularly focused on trust and partnership. Focus on behavior, values, personal objectives. The reader should consider how best to contribute as an individual professional, as a project leader, a supervisor, to the goals. The important questions: How can I help improve my company's Service & Operational Excellence? How can I best contribute to our Development & Transformation? To our Cost & Performance? How should I behave? The answers are in this book.

The point is not to emphasize technical or management processes or methods, or to train the reader in any given methodology. The point is to have the reader understand the underlying values, cultures, goals, objectives, behaviors, and the imperatives of working well together with counterparts within IT, within the business, with sourcers. So, ultimately, this book is directed at the individual and his/her role in partnerships. Yes, it would be good if the CEO and CIO and other executives could initiate appropriate actions. But in fact, the message for every reader is “It is up to me.” And at the appropriate points in the book, we will have sections about “what this means to me.”

A Note on Vocabulary and Cultural Differences

Our audience is not limited to North America and Europe. While English is a common business language in all areas, significant differences in usage of common words can lead to confusion. We adopt several specific conventions as follows.

IT, I/T, ICT, IS, IT/IS, MIS

The distinctions among these alternative names and acronyms are sometimes obscure and, without taking care, can be understood as synonyms. In some areas (e.g., Europe), IT is a narrow name covering just the technology and information systems (IS) covers the use of the technology via applications and information management.4 Some use information and communications technology (ICT) rather than IT. Often the term IT is understood to be the organizational unit responsible for IT or ICT or IS or MIS and so forth.

For our purposes, we use IT as the single name for all these variations. We also include all forms of information technology—for example, communications and its application in manufacturing. We use specific modifiers when a narrower meaning is intended (e.g., “IT Organization”). IT also includes “IS” as it is being used in Europe.

IT Demand and IT Supply

These terms describe the organizational relationships between IT organizations (and more broadly, the external or internal source of any IT services) and the business organization—the consumers of IT. IT Demand engages the business in working with the IT organization(s) to express requirements, whether for applications, projects, or user services, of information for analysis…anything that the IT organization(s) are prepared to provide as a service. IT Demand engages the IT organization(s) in communicating with the business, in processes like planning or prioritization or project requirements. Artifacts used may include service-level agreements, IT budgets, priority lists, and so forth.

IT Supply consists of the processes and organizations used to produce the IT services, such as infrastructure, projects, and IT architectures. IT Supply can be an internal IT organization, an external IT provider (e.g., a third-party cloud provider or outsourcer), an internal-to-the-business group, or individuals in the business using do-it-yourself IT facilities.5

The connection between IT Demand and IT Supply—in effect, the connection between business and IT—begins to describe what we will be calling Strategic IT Management.

Differing Perspectives on the Management of IT Demand and Supply

Who is responsible for managing the IT Demand and IT Supply connections between business and IT? This is not the question of who manages the technology of IT, but rather of who manages the performance of the connective links of demand and supply: ensuring their performance, ensuring outcomes. Different practices exist. In Europe, the chief information officer (CIO) tends to represent the demand side, and consequently is a lynchpin between the business organization and IT. As a matter of fact, (s)he is responsible for managing the business–IT linkage. The supply side then is the responsibility of a chief technology officer (CTO) or IT director.6 In contrast, in the United States, the CIO tends to be more technology-focused. Of course, these distinctions are company-specific, particularly given the global environment in which companies operate.

On some level, it does not matter who is responsible, as long as someone is. Our focus is on the business–IT connection itself and how the relationships can be strengthened to deal effectively with the issues of turbulence, change, partnership, and the related matters that are the subject of this book. Again, the goal is to transcend these forces to deliver superior business results.

Capability, Total Value Performance Model, Competency, and Culture

We use four distinct concepts to characterize the connection of business and IT.

Capability is introduced in Chapter 1 and describes the systemic ability of the enterprise as a whole to perform the partnership roles and tasks necessary to 1) create superior business value from investments that exploit IT, and 2) produce superior response to turbulence and uncertainty. “Capability” includes all the systemic elements that make up this overall ability. For example, in describing the enterprise IT capability for Planning & Innovation, the elements may include an organization's:

Ethos

(can it be accomplished within the current business and IT cultures?)

Leadership

(is there appropriate business and IT leadership for the efforts and tasks?)

Partnership and trust

(can the business and IT groups work together in performing the efforts and tasks?)

Organization

(are the skills and accountabilities available in business and IT?)

Resources

(are the funds and staff available?)

Opportunity

(is there acceptance of the need to perform the tasks in the current business and IT context and the courage to execute?)

Capability is a characteristic of the enterprise. Capability, as we use the term, describes the enterprise IT capabilities.7 It is instructive to note the definitions others have used.

Hagel and Brown say, “We use the term capabilities broadly to refer to the recurring mobilization of resources for the delivery of distinctive value in excess of cost…. We use the term capability rather than competence because the latter's common usage has tended to denote technology and production skills. For example, we could say that Dell has a distinctive capability in organizing pull-based production and logistics processes on a global scale.”8

Teece, in defining dynamic capabilities, says they are “the ability of an organization and its management to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments…and the essence…is resident in its tacit knowledge and its organizational processes and in the leadership skills of its top management…and display the ability to learn and adjust.”9

The Total Value Performance Model (TVP M) is introduced in Chapter 2 and describes the current success (of lack thereof) of the enterprise in producing the actual outcomes required to achieve superior business value from investments in information technologies and, perhaps more importantly, the specific performance outcomes and therefore credibility that is the foundation for business–IT trust. The TVPM describes this for both business and IT, and also reflects an ordering of these outcomes (performance and trust is built up from step to step in the model).

Competency is introduced in Chapter 7 and describes the specific knowledge, skills, and experience foundation needed for actually performing the processes and methodologies required. Competency is the demonstrated command of tasks producing the specific outcomes expected. So, for example, the enterprise IT capability for Planning & Innovation depends on all the resources necessary, including the culture, leadership, partnership/trust, organization, and assets that join business and IT. The specific competencies required may include command of the specific methodologies and tasks required, such as Strategic IT Planning, Scenario Planning, or Innovation Planning. Competency is a characteristic of the specific organizations (and individuals) charged to perform the tasks, processes, and methodologies. These may be business and/or IT organizations, including those external to the enterprise (e.g., suppliers).

Our use of capability, competency, and the TVPM is completely consistent with these definitions, as we apply them to the task of achieving superior business value from IT and superior response to turbulence and uncertainty.

Culture is discussed throughout the book. It is a term we use to describe the context in which process/decisions/behaviors occur and the conflicts that may exist within and between the business and IT silos in the enterprise. Culture is a slippery word, though; Leidner and Kaywroth wrote an extensive review of culture applied to IT, laying out the many definition and application permutations.10 For example, they report 164 different culture definitions. Their review focused on basic assumptions/belief systems and values. This is the context in which we apply the term culture—in terms of basic assumptions and beliefs (e.g., in business, in IT organizations) and values (e.g., what is good behavior). In this sense, we apply Schein's recent statement: Culture is the “pattern of shared basic assumptions learned by a group as it solved its problems…which has worked well enough to be considered valid…as the correct way…to think.”11

A Note on Our Perspectives and Prior Work

The three of us have had a terrific time working through this book and its content, conclusions, and recommendations. We bring very different perspectives to the subject: Ron has very extensive CIO and consulting experiences worldwide; Piet has a leading Netherlands- and European Union–based academic research and teaching career; Bob has extensive academic, CIO, and consulting experience, largely in the United States, Netherlands, and Mexico. The point is that these three perspectives do not always match, as the practices and mental models used in the United States, European Union, and elsewhere are not always comparable. These differences have enriched the book but, perhaps, may lead to somewhat different vocabulary and perhaps conclusions. We worked very hard to reconcile these, and hope we have succeeded for every reader.

This book builds on our prior work. Bob Benson and Pieter Ribbers in their professional lives share an interest in the impact of IT on business organizations. Bob Benson's earlier publications focused on the business–IT relationship, particularly how to improve it. He co-developed the concepts of business–IT alignment and impact; the former ensuring that IT supports the existing strategy and structure of the business, the latter shaping the enabling impact of IT on new strategies and structures. The economics of the IT decision-making process has been a key element of his approach. Information economics in this regard is a multicriteria decision-making method to prioritize among competing IT investment proposals. These approaches were developed in the following books:

From Business Strategy to IT Action

(Wiley, 2004), with Tom Bugnitz and Bill Walton

Information Economics

(Prentice Hall, 1988), with Marilyn Parker and Ed Trainor

Information Strategy and Economics

(Prentice Hall, 1989), with Marilyn Parker and Ed Trainor

Bob has since written well over 100 monographs, articles, and management advisories further developing the ideas underlying these approaches.

In his earlier publications, Pieter Ribbers studied the impact of IT on business models. Key issues he addressed include the implications of changes in marketplace structures on trade with customers and other partners; which business models and revenue models to consider to exploit the Internet; and the importance of online marketplace hubs or exchanges to the business. In line with this, one of his areas of interest concerns outsourcing and insourcing of IT and its impact on business models. These studies were published in the following books:

E-Business: Organizational and Technical Foundations

(Wiley, 2006), with Michael Papazoglou

Managing IT Outsourcing

, 2nd ed. (Routledge, 2011), with Erik Beulen and Jan Roos

Notes and Acknowledgments

Note from Bob Benson

The road to this book has taken many turns. My business partner in our consulting firm, The Beta Group, Tom Bugnitz, has been a supportive and integral part of my thinking and practices for more than 30 years now. My academic partner, Piet Ribbers, has been equally supportive and a crucial contributor to my thinking. He contributes substantially to this current book. We have worked together for almost 30 years as well. I have been fortunate to work through Cutter Consortium for the last several years, with its unique business plan of engaging leading practitioners as associates. One of them, Ron Blitstein, with a CIO's wisdom drawn from experience, is also a major contributor to this book.

Many individuals contributed to the process and review of our thinking and writing on this book, among them Carlos Viniegra, Cuitlahuac Osorio, Kevin Guenther, Charles Bartels, Bill Keyworth, Mike Rosen, and Charmane May. Thanks to all.

Without question, the most important support and encouragement comes from my wife, Noreen Carrocci. Efforts like this could not be done without her limitless affection and support.

Note from Pieter Ribbers

In 1987, when I started the executive master program in Information Management at TiasNimbas, the executive business school of Tilburg University in the Netherlands, I got in touch with Bob Benson. At that time, Bob was the dean of the School of Technology and Information Management at Washington University in St. Louis, Missouri. We both shared a passion for the impact of IT, particularly on business organizations. Our relationship has survived almost 30 years of discussion. During our yearly meetings, a recurring theme has been “We have to write a book about this.” However, we seemed better at discussing than writing; our wives, Lia and Noreen, smiled at us each time we brought up the subject. Eventually, two years ago, we picked up the challenge. What you hold in your hands is the result of all those years of discussion and a lot of hard work. It has been a challenging journey, and it still causes lively discussions between us, as our European and U.S. views on the topic do not always match. An important contributor to the discussion and its outcome has been Ron Blitstein. His analysis and opinions, based on his many years of experience as an IT leader, CIO, and consultant, continuously forced us to sharpen our ideas. Ron, thank you for your tireless perseverance when critically “fileting” my views.

During my years as a professor at Tilburg University, I have had the privilege to be able to stand on the shoulders of a few strong leaders in our field, two of whom I particularly want to acknowledge for this book. My thoughts have been shaped by Professor Chris Nielen, who has been my lecturer, colleague, and friend. He loved to pioneer with groundbreaking controversial views. His passing away left an empty space.

Through Bob Benson, I also met Marilyn Parker; Marilyn and Bob coauthored Information Economics, published in 1988. I had the pleasure to work closely with Marilyn when “supervising” her Ph.D. at Tilburg University—I use quotes here, as one can hardly supervise a strong leader. Our long discussions in Tilburg and Florida have also shaped my ideas for this book.

Writing a book is in itself an intensive process; it is all the more if you do that with authors located on different continents. As Skype meetings prove to be useful but certainly not sufficient, the more we appreciated the support and hospitality of Bentley University in Waltham, MA, which allowed us to have week-long face-to-face meetings in one of their offices. In particular, our thanks go to our colleagues Professor Nader Asgary and Mrs. Patricia Foster who have made this possible.

Finally, Lia, my wife, said, “I hope this is your last book for the time being.” However, I am not sure. Whatever comes, I still hope I can count on your support.

Note from Ron Blitstein

I wish to acknowledge the patience of my coauthors as we “actively” explored the various themes developed in this book. I would also like to acknowledge some exceptional leaders from whom I have learned much. These include Pat Cusick, Peter Dew, Lynne Ellyn, Fred Purdue, and Michael O. Sawyer. Lastly, I would like to thank my wife, Harriet, for her boundless support; after our many years of marriage, she continues to steal my heart.

Notes

1.

We use the term

business

with the understanding that turbulence and uncertainty—and Strategic IT Management—apply equally to government and nonprofit agencies.

2.

See, for example, Paul A. Strassmann, “In Search of Best Practices,” in

The Squandered Computer: Evaluating the Business Alignment of Information Technologies

(Information Economics Press, 1997): 135.

3.

See John Hagel III, John Seely Brown, and Lang Davison,

The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion

(Basic Books, 2012): 3: “we face two challenges: making sense of the changes around us, and making progress in an increasingly unfamiliar world.”

4.

For example, the U.K. Academy of Information Systems (UKAIS) defines information systems as the means by which people and organizations, utilizing technology, gather, process, store, use and disseminate information. See J. Ward and J. Peppard,

Strategic Planning for Information Systems

(Wiley, 2002).

5.

Marianne Broadbent and Ellen S. Kitzis,

The New CIO Leader: Setting the Agenda and Delivering Results

(Harvard Business Press, 2006): 32.

6.

A recent (2011 and 2012) study by the Business School INSEAD in collaboration with CIONET (a network of over European 3500 CIOs, CTOs and IT directors) revealed that only one third of the participating CIOs see their strategic roles as primarily technology-driven; instead, they see their roles as more business process– and client-driven. Moreover, the findings indicate that almost a quarter expect their roles to change from either technology-driven or client-driven to business process–driven in the next three years. See Fonstadt, “E-Leadership Skills,” in

e-Skills for Competitiveness and Innovation: Vision, Roadmap, Foresight Scenarios

(Final Study Report, 2013).

7.

See also the discussion in Joe Peppard and John Ward, “Beyond Strategic Information Systems: Towards an IS Capability,”

Journal of Strategic Information Systems

13 (2004): 167–194, and John Ward and Joe Peppard,

Strategic Planning for Information Systems

(Wiley, 2002).

8.

John Hagel III and John Seely Brown,

The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization

(Harvard Business School Press, 2005): 17.

9.

David J. Teece,

Dynamic Capabilities & Strategic Management: Organizing for Innovation and Growth

(Oxford University Press, 2009): ix.

10.

Dorothy E. Leidner and Timothy Kayworth, “A Review of Culture in Information Systems Research: Toward a Theory of Information Technology Culture Conflict,”

MIS Quarterly

30, No. 2 (June 2006): 357–399. This article provides a thorough discussion and extensive bibliography about culture.

11.

Edward H. Schein,

Organization Culture and Leadership, 4th ed

(Wiley, 2010): 18.

Part OneThe Challenges

Chapter 1Business and IT in Turbulent Times

Chapter 1 introduces the basic challenges facing business and IT management. These range from business and technology turbulence and uncertainty to the critical need for transformed relationships and management processes between business and IT. Mutual trust and partnership establishes the foundation for the transformation, and applying strategic management principles to the business–IT relationship and processes provides the means.

However, in addition to these factors, every enterprise must also overcome a number of existing challenges successfully. First, the relationship between business and IT organizations has not been functioning well. Second, business managers do not understand their responsibilities for their part of the relationship with IT. Third, IT managers and professionals do not have the needed competencies for successful delivery of business transformations based on developing and maintaining trust and partnership relationships. These three challenges combine to create inadequate governance and IT management processes that do not deliver a closer linkage between IT and the business. Without significant changes and improvements, neither party will achieve its aims.

Our goals are simple: superior business value from the use of information and IT, and superior business responses to turbulence and uncertainty.

Turbulence and Uncertainty Challenge Enterprises

We write this book at a time when turbulence appears rampant and is increasing throughout the world. It affects all domains: government, economics, society, individuals, and of course the ways in which information technology plays a compelling and leading role in business and government. To be fair, IT is both causing some of the turbulence (e.g., social media, big data, the ubiquitous Internet) and enabling enterprises to craft practical responses to the turbulence (i.e., enabling stronger and more adaptable enterprises). Perhaps it is this duality that adds a degree of tension to the mix. Inarguably, IT is the only enabling function that serves the business by facilitating its current goals and strategic ambitions, while at the same time acting as a disruptive force that challenges existing business models and enlarges the plate of future opportunities. In 1942, Joseph Schumpeter1 coined the term “creative destruction” to describe the “process of industrial mutation…that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” The rapid advances in information technology continuously force successful business leaders to reexamine business models and the basis for competition. They also serve as an epitaph for those businesses, no longer relevant, that failed to stay current.

Turbulence affects everything and compels effective, continuous, adaptive, and swift responses from both business and IT management. But achieving this goal is difficult, in that the trust and partnership gap that separates IT and business prevents the necessary effective and continuing responses; they simply are not adequate to the challenge. “Best practices” must evolve into forms that build trust and partnership (in our terminology, bridging the gap between IT and business) while also enabling businesses and government to adapt rapidly to the turbulence and change that surrounds them.

We have revisited hundreds of books, numerous professional articles, and countless research reports, adding this knowledge to our many industry contacts and direct hands-on experiences. In the process, we have found that it is easy to be overwhelmed by the volume and noise of the recurring theme; we are in a period of intense turbulence—represented by concepts like dynamic capability, rapid innovation, “outside-the-company” sources of value, nimbleness, and implications of dispersion and networking of enterprises. Uncertainty due to government actions and regulatory changes only adds new spice to the turbulence. One only has to have a subscription to popular business journals (e.g., Bloomberg) and professional journals (e.g., HBR, Sloan), and even such outliers as Foreign Affairs to increase that sense of being overwhelmed.

And then there is the turbulence present in technology itself. From a relatively stately sense of regular process to lurching and breathtaking leaps, every year technology offers us the promise of bigger, faster, cheaper versions of essentially the same stuff. However, it also provides a sense that a whole new dimension is coming at us, and a lot of it is already here. One only has to look at the web sources reporting on the Gartner Hype Cycle2 for just a taste of this.

All this puts great pressure on enterprises to find ways in which to cope with the turbulence. It also puts great pressure on them to deploy IT effectively, a task made considerably harder when there is a lack of trust and partnership between IT and business/governmental enterprises. Many of these challenges have been with us for a long time (e.g., “alignment,” effective planning and deployment, etc.). But—and this is fundamental premise of this book—turbulence and resulting requirements for change and adaptability have the potential to render much of the current “best practices” ineffective and perhaps dangerous to the enterprise. Equally compelling are the historic gaps between business and IT, which have in the best of times made it difficult to perform and now, under conditions of turbulence, degrade the ability of enterprises to respond effectively.

This Is Not about Alignment (Entirely)

IT has grown up in a context that emphasized the need for supporting business objectives. The tools and methods for doing so have been bundled under the term “alignment.” Alignment has proved a satisfying way to think about and deal with many of the business and IT relationship problems successfully.

Alignment, however assumes the enterprise management knows what it is doing. Surely it does, with respect to its strategies and operational activities that carry them out.

The problem, though, is that enterprise management may not have a clear view of the business opportunities afforded at a strategic and an operational level. Exactly how would business strategy and/or business operations change, if the possible IT innovations were fully understood and expressed in business terms?

Exhibit 1.13 has done well over the years as a vehicle for explaining the relationship between these two factors: one of alignment and one of innovation/transformation. The diagram itself began life as an explanation of enterprise-wide information management, developed through a joint-study research project between the IBM Los Angeles Scientific Center and Washington University's Center for the Study of Data Processing. The diagram has been modified and adopted by others, including Henderson and colleagues,4 as a way to express strategic IT and business relationships. Over the years, the terminology has changed slightly (e.g., “Transformation” started out as “Impact” and then became “Innovation”) but the meaning did not. The two factors of alignment and transformation do state exactly what is needed: to have a common view of the manner in which IT supports the business strategy and operations, and at the same time to provide a clear path to finding transformational opportunities. Turbulence and uncertainty, as we will see, make this even more important.

Exhibit 1.1 Business and IT Cause-and-Effect Connections

Unfortunately, one side effect has been to emphasize the separation of business and IT. For a long time we described the gap between them as being overcome through the processes of alignment and of transformation (e.g., strategic planning.) This represents part of the objectives of Strategic IT Management, to eliminate more directly the gap through trust and partnership relationships.

We will refer back to this two-factor relationship in subsequent chapters, particularly highlighting the responsibilities of CIOs and CEOs to fully understand and communicate the transformational potentials provided by IT. And certainly (as we will show in Chapter 5), those potentials have been often realized as contributors to business turbulence, namely big data, the Internet, the collapse of supply chains, and so forth.

The Problem of Business and IT Relationships

In most enterprises, the business–IT relationship is not functioning well. This has been the case for a very long time, all the way back to the origins of data processing. Every enterprise of any size has a history of establishing IT as a separate organization and then trying many different processes of governance, planning, and performance management to bridge the gaps between business and IT. Every so often, new organizational approaches are tried (e.g., centralization, decentralization, federation), new forms of governance attempted (e.g., prioritization, planning, service management), new technologies and methods adopted (e.g., green screens, Internet, thick or thin PCs, agile development, enterprise architecture). Despite these interventions, the relationship continues to function poorly, as we will describe in Chapter 2.

Everyone has anecdotal examples of the relationship problems. When we do group exercises with IT managers, typical concerns they express include 1) we're always asked to corral increasing IT costs; 2) business executives are dismayed with IT performance; 3) they don't believe we can get projects done on time on budget, and when we do, business does not use the result or does not like the result; 4) there's no strategic direction; 5) we need modernization but there's no support for it; and 6) we're simply not at the table. When we do group exercises with business managers, their typical concerns include 1) IT does not speak our language; 2) IT does not understand the business; 3) IT cannot produce good business outcomes; and 4) each business unit has distinct requirements.