Agile Companies Can Avoid the Alignment Trap, Says CIS Professor
November 27, 2012
|Dr. Robert Plant|
The role of the CFO is increasing in scope and responsibility, even though those holding the position are required to do the most with the least. That’s according to Robert Plant, associate professor of computer information systems, speaking to South Florida CFOs and finance leaders at a CFO Roundtable Discussion hosted by the CFO Alliance and the School of Business on November 16.
Plant said CFOs are often focused on maximizing return on investment (ROI), which he described as a potentially dangerous centralized control. He added that maximum ROI can be achieved when IT successfully aligns with the company’s core strategy through process and technology architectures. Without this alignment, companies tend to stall.
“Most companies find themselves in the ‘alignment trap’ – trying to become strategy-aligned but pouring too much money into it,” said Plant. “They end up swimming against the current and going nowhere.”
Instead, becoming highly efficient and highly aligned should be a company’s goal.
“People view IT as a cost center, not a value center,” said Plant. “People try to do more with less and build on top of that. Instead, try to become more efficient in the process model, think about the business model, and build IT on top of it.”
A CFO differs from a CIO or CEO in that he or she is required to be the most reactive person in an organization. The lens through which they view their organization also differs, something that Plant refers to as the “Technology Window.” Through this window, a CFO looks at the financial horizon and examines available technologies, leading to the formulation of strategy.
Also to be taken into consideration, advised Plant, are four “CIO Mandates” identified by IBM Research:
- Leverage what IT provides – view IT as provider of fundamental tech services
- Expand organizational strategy – should an organization be an early adopter or laggard?
- Transform current processes
- Pioneer into a new space
Plant cited Amazon and Wal-Mart as companies that are experiencing IT-enabled growth through what he called an “Agile ROI” approach. These and other companies also remain agile by leveraging “Big Data,” an information technology trend towards larger data sets accessed by a large group of users that can provide strategic or operational information to an organization when used effectively.
Companies with Agile ROIs place an emphasis on this relationship of speed to benefits, such as taking action when selling an item that is nearly out of stock to preserve a company’s reputation. Moving forward, Plant suggests other companies can achieve similar agility by avoiding a single ROI metric for IT projects, aligning IT with an organization’s strategy, and working to develop a 360-degree vision of ROI for IT-related projects.