Hence, IT is historically considered ineffective by business leaders. When CIOs are asked why they have trouble keeping the business side satisfied, they say “we do not know what the business needs, only what they want.” So IT tends to deliver data and information on a “squeaky wheel basis” that is unaligned to real business needs and fragmented. The joke goes that CIO stands for Career Is Over. This dark humor has roots in the lack of alignment between IT and business direction. This chapter [excerpt] will cover why business alignment is so important to information asset management (IAM), and review the essentials of the EIM processes for alignment.
Efforts to link business directions to information and content needs are often not effective. Organizations try alignment exercises, but successful efforts that demonstrate linkage with IT — and especially with EIM — are rare. Often the alignment exercise is done against an entire portfolio.
This exercise is valuable and focuses increasing business value on the ROI of achieving business change with IT. But such an exercise falls short in terms of asset management because information is relegated to a kind of application to be managed vs. a business asset that IT is interacting with.
Too often the shortcoming is that business goals are aligned with one-off projects, or focus on short-term activity. (The famous “low-hanging fruit.”) This is not to say that short-term needs are not met by EIM. On the contrary, we will show in this chapter they are actually met more readily.
We will also see how deriving the correct business drivers and aligning the EIM effort with them is a key step in managing information as an asset.
How Do EIM Objectives Tie To Business Goals?
There are many needs to be met by an organization that understands that data and content are fuel. There is also a balancing act that has to occur. Goals requiring some sort of data or content enablement cannot all be met simultaneously. We have to understand the nature of the business needs, and present a picture of what the data and content can make possible. Alongside the satisfaction of business needs, we have to blend in the formalizing of information as an asset so the meeting of business needs is sustainable.
Figure 1 represents the intersection types of business drivers and managed information. When data and content are considered in support of the business, we need to understand there are three distinct benefit areas:
- Business benefits that stem from efficiencies — Organizations can drive numbers to the balance sheet or bottom line by getting leaner. We can do things faster. In the information arena, we have promised data efficiencies via reuse or low redundancy, but these tend to be squishy, and rarely drive a hard dollar to a financial statement.
- Direct support of business initiatives — These are hard dollar benefits that have eluded being attributed to IM efforts. However, information certainly does support new business projects. The benefits are there, but aligning them with the information project in terms of contribution, cost, and benefit does not happen often.
- Risk avoidance — This category of benefit has been remote from EIM-type efforts until recently. Risk can stem from traditional fiduciary risk, or risk from noncompliance, civil suits, or fraud. However, using and managing information to avoid risk has become more prominent in recent years as regulations requiring advanced IM (privacy law and regulations like Sarbanes-Oxley) come into play.
As we view these benefit categories from an asset management standpoint, we want a balance point where information adds the most value to the organization. We may be able to justify and reap benefits simply from the efficiency context. We have done this with IT for years. Occasionally, we deploy new technology that supplies huge business benefits. But after the initial rush of benefits, we always seem to end up with a dénouement where the data supplied by the radical new technology does not stand the test of time. The large returns initially experienced are not sustained.
So let us add the asset management view. What combination of benefits will not only supply early payback (i.e., improve the income statement), but also improve our balance sheet? To improve a balance sheet means improving assets or equity, or reducing risk.
Assets must be used or they have no value. An empty factory is written off. Machinery that is depreciated and no longer supporting required capacity needs is replaced. So the assets must contribute to a financial benefit. Figure 2 shows that IAM must display a decidedly deliberate drift AWAY from the IT efficiency play to align EIM with business activity and direction. The efficiency side covers benefits generated from “making better decisions” and “getting reports faster.” Granted they are legitimate benefits, but they do not align to the business at all. The business improvement (increase equity and assets) and risk management (reduce liabilities) sides move us closer to benefits that change financial statements and better justification to handle content as an asset.
