The first order of business for new CIOs is to restructure IT so that it better aligns with the business. Key to this restructuring are the “business relationship executives” — persons well-versed in a business domain or market segment but also capable of building a business case for a new IT investment.
Business relationship executives can hold their own with business leaders but they are also knowledgeable about IT (and the processes of delivering IT). They can work across the architecture, infrastructure, application development and project management offices, ensuring those units deliver on their promises. Finally, they are are highly strategic and help shape IT demand with business leaders in their companies.
This plan to align IT and the business sounds simple enough. Restructure the IT team by having a centralized group to run operations (help desk and data centers, which are most likely outsourced to third parties). Likewise, have a centralized application development and project management group that reports directly to the CIO. The business relationship executive’s role will be to face off with each major line of business or business function. But there are challenges, including:
1. Defining authority.
How much authority over delivery should business relationship executives have? Give them too little, and they wind up as toothless account representatives making promises to their business peers that they cannot fulfill. Give them too much, and they wind up in the weeds putting out operational fires rather than staying at the strategic level.
For example, when Joseph Santamaria became CIO of the $12-billion electric and gas company PSEG, he inherited an IT organization that already had business relationship executives in place, but the structure wasn’t working.
“The [business relationship executives] were the one throat to choke for everything from demand shaping to project execution to operations,” Santamaria told me. “But these people struggled in their roles because they had too many priorities and rather then set strategy, they wound up fighting fires.”
To avoid this, be sure your CIO defines accountability over delivery carefully. The business relationship executives and centralized IT leaders need to be crystal clear on who is responsible for what.
2. Breaking legacy relationships.
Just because you put a new name on an organizational chart and tell your business peers that this IT person is their new business relationship executive does not mean that the new relationship will automatically work. Old traditions die hard, and if your head of marketing has always called Bill when she needs IT resources, she will continue to call Bill, despite the fact that her new point person in IT is Sally. For the business-relationship-executive model to work, the new relationship requires some care and feeding.