Unless you’ve been living under a rock, you know that we are experiencing tough economic times and that those times may continue for a while. Tough economic times shed a bright light on the true perception of IT within the executive ranks of your company. Is your IT organization a partner in developing and implementing strategies to meet the economic challenges or is it one more overhead item that needs to be reduced?

Although budget cutting and cost containment are common tactics for financially stressed companies, many are pursuing more sophisticated strategies for improving their economic situation. These strategies include:

• Enhancing operational efficiency to reduce long-term overhead
• Protecting or expanding revenue sources
• Investing in capabilities that will allow them to capitalize on trends or markets that gain momentum as the economy picks up

Whether, and to what extent, your IT organization is asked to participate in these more strategic endeavors is the yardstick by which it can measure its worth to the corporation.

When Bad Things Happen to Good IT Organizations

In recent months, I have been helping a mid-size IT organization develop its strategic plan. The impetus for IT’s plan was the circulation of the company’s five-year plan laying out the business strategies and objectives for the entire company. Each organization was invited to craft its own plan, showing how it intended to help the company achieve its larger goals.

In response, the IT team drafted a comprehensive plan outlining its objectives and tying them back to the company’s goals. Moreover, the team designed a measurement program to ensure that its efforts would remain aligned with corporate objectives going forward. Upon presenting the plan to senior executives, the IT managers were chagrined by the response. Rather than appreciating how the IT organization could support the company’s stated strategies, the executives were solely focused on how IT could contain costs and reduce its budget.

What became abundantly clear was that senior management viewed IT strictly as an overhead function and did not believe that it could directly contribute to strategic corporate goals.

How Did Things Go So Wrong?

Does the scenario above sound familiar? If your company executives do not treat your IT organization as a true strategic partner, remember that their view of your organization has been formed over a long period of time and reflects their attitudes and misconceptions as well as actual observations of IT performance. Ask yourself:

• Has your organization demonstrated sufficient knowledge of the business and its processes to contribute meaningful recommendations for improvements?
• Does IT have a historical track record of solid performance under challenging conditions?
• Has IT proactively offered innovative new ideas and recommendations or has it been primarily the implementor of other people’s ideas?
• Is IT willing and able to have its performance (and perhaps compensation) based on quantifiable and objectively measurable business objectives?
• Has IT invested sufficient effort to educate its business counterparts about its capabilities, tout its successes, or advertise its competencies?

In short, has your IT organization made a strong case for a place at the executive table? If not, expect IT to be out of the loop when it comes to strategizing or decisionmaking. The symptoms will be an executive focus on IT cost cutting rather than seeking increased IT contributions.

Lessons Learned

If your IT organization is suffering from the image problems cited above, don’t despair. You can take several positive steps to change the company’s perception of IT. But be advised that this is not an overnight fix.

• Leverage IT’s position.

Unlike other departments, IT has a central position within the company, serving business units, customers, and suppliers. This position gives IT great insight into how the business and its processes work. Leverage this knowledge to offer increased value to the business, and to show that IT understands more than just the technical side of operations.

• Keep your sources of strategic ideas.

Resist making severe cutbacks in sources of strategic ideas such as consultants, research, and publications. Losing these resources can be the beginning of a strategic downward spiral.

• Build proactive capabilities.

By continuously seeking to acquire more business knowledge, IT can become a source of proactive ideas, recommendations, and strategies. Combining its business and technical knowledge will allow IT to identify opportunities where technology can be applied to better support and drive the business.

• Measure performance.

It is incumbent upon IT to measure its performance frequently and objectively. Just as every other corporate department must justify its existence and continued investment, so must IT. IT should have confidence in its abilities and welcome a chance to prove its worth.

• Learn PR skills.

To value IT properly, the rest of the company needs to know IT’s capabilities, knowledge, and successes. Technical prowess alone is not enough. IT must drop its "back office" mentality and learn how to promote, in business terms, the value that it can provide to the company.