The VP Global Markets walks into the office of the CIO.  She impresses on the CIO that her profits are being squeezed and IT must do its part to reduce costs.  She quotes a report from a reputable consulting firm that IT costs are not competitive.  The CIO takes this as a call to action and embarks on outsourcing significant parts of the IT organization to cut costs.  Three years later, the same executive, now promoted to President, approaches the CIO and laments that profits continue to be squeezed and IT is not moving fast enough to support new markets.

So what went wrong?

The CIO thought they were fully aligned with what the business asked of him.  Although the CIO was able to achieve cost savings through outsourcing, it was at the expense of agility and flexibility that were required to meet the revenue growth required by the business to enhance profits.

Simply taking orders from the business without this understanding, the business and IT lose significant opportunity and can cause long term harm to the business.  So much has been written and sermonized about the alignment of business IT that the true meaning has been lost.  It is not about alignment – it is all about knowing your customer.

So what do you do?  I suggest the following:

Meet with your customers. Consider meeting with the business’ customers (together with the business), if it would help better understand their perspective.

Listen to their objectives, needs and wants in their terms. Ask questions (avoid IT speak):

• What does success and failure look like?
• What and how much change is expected?
• What is IT doing well and what needs to improve?
• What is the business doing well and what needs to improve?
• How is the business planning to grow revenue, profitability?
• Is the business looking for agility and flexibility from IT to respond to changing business demands and conditions?
• What IT capabilities help the business differentiate from its competition?
• Where can the business taken on more or must reduce risk?

Confirm your understanding of their objectives, needs and wants.  Put it in writing and confirm.  Keep it simple.

Provide input to their objectives, needs and wants. Now this is where tremendous value can be realized by collaborating with your customer.   IT should not just be an order taker to the business, but suggest opportunities where the business can benefit from IT’s experience and available technologies.  This can include ability to deliver new services, expand to new markets, and reduce cost.

Prioritize needs and wants with their customers. Focus on needs only.  And wants only when you’re done.  I’ve seen too many projects expend most of the resources to customize and configure the 20% of functions that were treated as needs but were in fact wants.

Commit to what you can deliver. Know your capabilities and don’t over promise.  Build confidence and track record with delivering significant changes in phases.

Deliver on commitments. This is key to building and maintaining the trust of your customers.  There will be challenges; be transparent with the customer, involve them in making key decisions and trade-offs, and manage expectations.  Engage the customer in delivery to ensure solution is adopted and benefits are realized.

Confirm that that customer objectives and needs are being met.  If not, why not, and together take corrective action.

Repeat. This is a continuous process of improvement.  The business environment continues to change and so should you.

Sounds simple — don’t get me wrong  — it is not easy.  It is a long-term relationship with conflicts, competing demands, and unwritten expectations.  Keep at it.  Engage the customer.  Understand your customer.   Work with your customer on defining their needs and prioritising your efforts.  Then repeat.

Good luck.

Please comment. I am interested in your comments and experiences.