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After nearly two decades, technologists and strategists are still working out a productive alliance in the business world. Many companies accept that information technology enables their competitive edge, but their efforts to partner it with business are failing. A critical disconnect persists between strategy and technology, which is why a company can spend years planning IT initiatives and implement only half of them. Or why a bank can outsource its failing IT function in the mid-1990s and still be unhappy years later when IT has improved but its business processes have stagnated.
Part of the problem is that strategy has become a moving target — it’s hard to build a technology platform to support visions based on capabilities a company might have. To explore exactly how difficult it is, we surveyed chief executive officers and chief information officers at 97 companies in the United States, Europe and Australia that had moved or were moving to e-business.1 Predictably, most were responding to an increasingly volatile business environment by shrinking their development and planning cycles. Half don’t extend plans beyond a year, and half of those with infrastructure plans update them quarterly. Some companies prefer to keep even short-term planning loose, calling themselves “managers of change” or “providers of project solutions.”
The shifting competitive landscape is creating a larger gap between strategists and technologists. Executives are busy creating and refining visions and have little time to focus on technology. Technologists are busy keeping the platform current and have little time to understand the business in depth. Said one IT consultant, “These guys have a great vision, good infrastructure, useful information and strong operational systems. Now how do we get them to understand what it all means?”
Without a mechanism to force communication, each group retreats into its specialty — a state worsened by outsourcing. As one senior manager remarked, “We tell them [the supplier] what we want, and we get exactly that technically, but that’s all we get. What we really want is a dialogue about our changing needs.”
The widespread frustration with traditional attempts to align business and technology seems to argue for a greater organizational transformation. Companies we surveyed agreed that e-business strategy is a moving target and that IT planning cannot keep pace.
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1. We interviewed and surveyed 145 executives in companies across diverse sectors: technology suppliers (including Oracle, IBM and Vistorm), distributors, financial services companies (credit card, stock brokerage, insurance and banking firms), information providers, pharmaceutical companies, utilities, and retailers and service operations (including Safeway and Avis). We focused on questions about building e-business infrastructure. We asked about business models and initiatives and how these related to developing the requisite technology. Interviews typically lasted between 45 minutes and two hours. See C. Sauer, “Managing the Infrastructure Challenge,” in “Moving to E-Business: The Ultimate Practical Guide,” L. Willcocks et al. (London: Random House, 2000): 210–235; and C. Sauer and L. Willcocks, “Building the E-Business Infrastructure: Management Strategies for Corporate Transformation” (Wimbledon: Business Intelligence, 2001): 1–338.
2. M. Earl and D. Feeny, “How to Be a CEO for the Information Age,” Sloan Management Review 41 (winter 2000): 11–23.
3. D. Feeny and L. Willcocks, “Core IS Capabilites for Exploiting Information Technology,” Sloan Management Review 39 (spring 1998): 9–21.