Economic crisis fosters change in relationship between IT and business

The difficult economic environment is providing an unprecedented opportunity for IT leaders to show their added value and significantly increase their impact at board level.

This is one of the surprising findings of the third edition of Deloitte's IT-Business balance survey. The 2009 Survey On IT-Business Balance: Shaping The Relationship Between Business and IT For The Future explores some of the key themes that are changing the relationship between IT and business.

Against the background of the worst recession in 70 years, the report queries both IT and business professionals about their interaction and evolving roles. The 2009 edition finds that IT is under tremendous pressure to deliver business value. Although the IT voice is still not sufficiently heard at board level, both IT managers and their business counterparts confirm that the crisis has intensified fruitful dialogue between the two sides.

Respondents express cautious approval of IT outsourcing, a decision increasingly taken jointly by IT and the business. An alarming finding is that there is a general lack of awareness about the severity of the threat posed to IT security, making it difficult to justify the investing in countermeasures.

"The role the chief information officer (CIO) plays in the business is gaining in importance," says Rik Vanpeteghem, CEO Deloitte Belgium. "We are witnessing a clear evolution, from mere technology implementer to trusted business adviser. This is a fundamental trend, which reflects the imperative for Business and IT to get closer to face today's challenges."

The report says that current economic context has permitted CIOs to act as leaders and intensify their dialogue with the business side. Hence the crisis is an opportunity not to be missed to better anchor the role of the CIO as adviser and strategist. Organisations must build business skills within IT and ensure that the integration, and thus alignment, between Business and IT trickles down to all strategic, tactical and operational levels, it points out.

"Our survey shows some evolution in that direction," said Christian Combes, partner, Deloitte Consulting, and a co-author of the report. "But it also confirms that there is still some way to go before true integration of IT and Business is achieved."

Co-author Chris Verdonck, partner, Deloitte Enterprise Risk Services, added: "Most companies are still fighting the impacts of the crisis.

"But in spite of the urgency and the uncertainty which rule today, now is probably a good time to reflect on how IT and Business can work further together to create value."

Steve K. Cachia, Deloitte Malta partner, said: "The results of this survey clearly show the challenges faced by IT globally which are also a concern to IT in Malta." The alignment between the IT and company strategies must go beyond budgeting - aligning IT and business strategies is too often unfortunately a one-off exercise.

Survey highlights

• Evolution and trends: IT is expected to go beyond automation and efficiency to deliver business value. IT will bring more business value than the traditional "more automation at less cost" approach. There will be more emphasis on delivering value to dimensions with a direct business impact: customer satisfaction, better products, growth in turnover and profit.

• IT governance: IT isn't heard enough at the top, which impairs alignment. About half of the responding companies rarely or never discuss IT matters at board level. One out of five says that IT strategy is rarely or never aligned with company strategy. For the majority it is still a yearly exercise tied to the budget. Organisations must further focus on the compatibility of IT direction with overall strategic orientation.

• IT management: Not the driving force it should be, yet IT is getting closer to the business for decision making. Only 41.5 per cent of respondents see IT as the driving force of business decision-making. But the crisis, with its drastic reprioritisation of IT investment portfolios, has intensified dialogue between IT and the business. Institutionalising this level of dialogue beyond the crisis should be on the CIO's mind as a means to get business and IT aligned.

• IT (out)sourcing: Still an option - with caution. In the current economic climate, outsourcing IT services is seen by both IT and business as viable, with 60 per cent of respondents moderately comfortable with this option. On-site sourcing models remain the most common, with significant differences between regions. Most respondents indicate that the decision for IT outsourcing is a joint affair.

• IT security, privacy and fraud: Still not enough awareness. Business wants to spend more on security and data privacy than their IT counterparts. Over 50 per cent of both believe IT is highly committed to combating internal fraud. Yet a lack of awareness about the number and severity of actual incidents makes it difficult to appreciate the value of security and privacy management, and thus justify the required investments.