Learning the lessons for IT Alignment, from Sainsburys and RFID

Alignment of IT to the business currently is talked about more than most other hot-topics in technology circles these days, and in my opinion, for good reason.
Organisations woke up to the fact that technology service providers, whether they are internal or external, have until recently enjoyed years of blissful isolation from the realities of commercial and operational responsibility. As a result, terms such as "alignment" and "governance" have become commonplace in boardrooms across the country. However, many IT professionals have struggled valiantly over the last five years to bring about change so that alignment can take place, but with little success. They have encountered problems partly because of the legacy and reputation that their predecessors have left behind, and partly because of the technophobia that exists within many companies.

To me, a prime example of what happens when these two influences come together is the recent problems at Sainsbury's plc. The failed attempt to automate and integrate the companys supply chain has sent shock-waves around the supply chain technology industry. For perhaps the first time since Nike fell-out with i2, a major, renowned, high-profile company has backtracked publicly on a strategic business and IT programme, at huge cost to both the business and the reputation of all parties involved.

The adoption of RFID on the other hand, has demonstrated how well technology can be adopted by an organisation, if it is packaged and promoted properly. The exponential growth in the interest and acceptance should be taken note of by those of you who are looking for clues as to the best way to engage with an organisation and help align the IT to its stated objectives.

With the globalisation of trade and commerce growing all the time, many CIOs and IT directors are going to find themselves involved in, or responsible for, similar types of projects, so learning the lessons from Sainsburys and RFID could be key to aligning the technology to the business drivers.

"Sainsbury's problems will have given every IT sceptic, laggard or operations person wanting to protect their job, an excuse to delay and obstruct the valiant efforts of the CIOs and IT resources throughout the industry."

Looking at what can be learned from the Sainsbury's situation, you only have to read the articles and press releases to know that the board sees the IT function and its third-party vendors as the major cause of failure. In this case, I suspect that the majority of the blame should not lie at their feet. Not for the first time do I find myself filled with a mixture of frustration with business decision makers and sympathy with unfairly treated IT resources.
I am frustrated and angry because of the way the operating business appears to have deflected most of the blame. What frustrates me even more is that fact that Sainsburys problems will have given every IT sceptic, laggard or operations person wanting to protect their job, an excuse to delay and obstruct the valiant efforts of the CIOs and IT resources throughout the industry. It gives them a reason not to engage with IT as a cost-reducing, value generating, business enabler, an ultimately damage their own organisation.

"I would have thought that a boardwould have been more mindful of the internal damage that its public statements must have caused."

Equally, concern and sympathy has to be expressed for all of the IT resources and suppliers involved, who it appears, will have to endure the blame for a very costly and public failure. What must the level of moral be like for these people now? I am sure most of the people reading this will appreciate how hard it is going to be for the IT management to motivate these people again for the huge amount of work that must now be done to ensure Sainsbury's remains competitive. I would have thought that a board, which supposedly understands how critical IT will still be to their long-term success, would have been more mindful of the internal damage that its public statements must have caused.

Perhaps, I should be appealing to the CEO and Operating Directors and asking them what they hope to gain by blaming IT? Those of us who have been involved in delivering major projects know that more often than not, the majority of the issues lie with the business, and their lack of involvement. Unfortunately, those appeals rarely work and the case for alignment has to be owned by the CIOs, or their equivalents.

So the lessons learnt from this in terms of what not to do are:
1. If a CIO fails to understand the drivers that affect a business, or are unable to communicate how the IT resources can help organisations manage these factors more effectively, then the credibility and esteem of the IT function will always remain low
2. A business should never set out on a critical project without giving clear accountability to the key functions
3. The board only have themselves to blame if the IT organisation fails to understand what the business objectives are
4. Blame-cultures damage IT alignment programmes.

"Having been involved in a number of commercial discussions and business case studies for RFID over the last five years I have seen a completely different attitude by management to anything that I have been involved with before."

On a more positive note, RFID appears to be a phenomenon that has most business executives, strategists and users excited and engaged more than any other technology I can think of since the sudden growth of the Internet a few years ago.
For many years, RFID was just another technology solution waiting to solve an undefined business problem. Then a number of major factors brought about a sudden change in fortune, from which successful alignment lessons can be learned.
Having been involved in a number of commercial discussions and business case studies for RFID over the last five years I have seen a completely different attitude by management to anything that I have been involved with before. In many cases, the business has been keener to adopt RFID technology than the IT functions themselves! Business cases have been funded based on possibly gaining competitive advantage, or increasing more often these days, in order to retain market position with those customers dictating compliance to their particular RFID standards. Other than these, I believe that the underlying reasons why the business community has accepted RFID so readily are as follows:
1. RFID is often positioned as having no direct competitors or credible alternatives; even though many people recognise that bar codes and other types of data recognition systems can solve most isolated business issues, for less money
2. The technology can be explained in simple terms and within the context of an existing business process. This way the senior decision makers have no complex or conceptual technologies to understand and can relate it back their core business
3. The benefits to retailers, asset owners and most manufacturers can be defined and quantified as cost-savings, whether they are achievable, or not
4. Last, but not least, the main force behind the acceptance of RFID has been the combined might of world-renowned academics and some of the worlds largest companies.

Putting this into the context of successful alignment strategies, when the boards of major companies went to their respective IT executives for advice and recommendations, the CIO or IT director had the ability to:
1. Declutter the issue so that their appeared to be only one solution
2. Position the solution as if it were designed to become part of the operational process, rather than separately owned and run by the IT function
3. Relate the cost-savings directly to the operational processes identified above
4. Use academic research (preferably from the same University that the CEO went to) to support their recommendations.

Of course, not all of this will be relevant every time someone is trying to align a particular IT strategy or project to the business needs. However, those of you in senior positions, who are struggling to get management buy-in should think carefully, especially when you consider that the analyst firm Gartner is predicting that within the next five years up to a third of IT directors will lose their jobs to business process directors. The reason? Well apparently, that is where the business will see most value being created. If this is to be believed then it is really a case of align your business to your IT, before the board aligns you!

Lennox Coutts is Consulting Director for business technology consultancy Tilley & Coutts Associates. The company focuses on rapid evaluation and decision-making for IT related activities, as well as programme start-up and mentoring within the Manufacturing, Supply Chain, Retail and Mail Services sectors.