Deloitte

June 17, 2008 10:13 ET

Deloitte: IT Takes Two to Tango

Deloitte reports benefits of alignment between IT and business: reduced costs, improved operations and clear performance metrics

TORONTO, ONTARIO--(Marketwire - June 17, 2008) - A Deloitte report released today reveals that IT departments in Canada's financial services industry need a stronger, more strategic voice at the decision-making table to be considered true partners to the business. In particular, the alignment between IT and the business enables constructive discussions on ways to reduce costs, improve internal operations and provide clear performance metrics.

Titled "Running IT as a business" the report, based on interviews and discussions with senior executives in Canada's financial services industry, pinpoints the key challenges faced by today's senior IT executives in Canada's top financial institutions, and provides ways to overcome them and increase their value to the business.

"In order to become strategic and valued contributors to the business, IT must adopt a business mindset, learn to communicate in business language and offer proactive solutions to problems, rather than simply taking orders to fix them," says Terry Stuart, Deloitte partner and national Consulting financial services leader. "In order to shed its image as a commodity service provider, IT must in effect act like a strategic partner in order to be accepted as one," he adds.

The following seven strategies for better alignment should be considered by IT departments seeking to become true partners to the business:

1) Improve alignment between IT and the business - An overwhelming majority of respondents - 18 of the 21 - favour including IT in the planning process as a way to create alignment. Just over 15 of the 21 also indicate that a shared understanding of IT issues and performance metrics would improve the quality of discussions on ways to lower costs without sacrificing critical services.

2) Focus on business value - Adopting business terminology breaks down language barriers and increases the odds of IT and the business arriving at consensus on ways to tackle business issues. Survey results show that IT functions recognize the need to define their service offerings and performance measures in terms that are meaningful and understood by the business, but still need to communicate these in business, not technical terms.

3) Choose the right IT projects and activities - 16 of the interviewees view investing in IT initiatives that do not align with business value as a waste of precious time, money and resources. Clear and detailed business requirements and an accurate calculation of benefits and value, must exist in order to properly select IT investments with the strongest returns.

4) Execute projects effectively - Due to their scope and nature, IT projects often face overrun costs and extended deadlines. Nearly half of the interviewees point to successful delivery of critical projects as the priority issue for IT to address in the coming year. In order to avoid project overruns, respondents highlight the importance of communicating and managing expectations where business and IT functions intersect.

5) Manage workforce and talent needs - An aging workforce and shifting demographics continues to place ongoing strains on recruitment and retention efforts in Canada's financial services industry. IT functions must therefore develop and implement strategies designed to attract and keep the types of IT professionals that are most critical to their success.

6) Centralize without losing alignment - The results show a continuing shift towards centralization of IT functions and services as a way to reduce costs. Merging the right activities without losing efficiency requires maintaining close collaboration between IT and the business in priority areas such as analysis and performance metrics.

7) Innovate for strategic advantage - Although innovation is considered a relatively low priority for many IT functions, 9 of the interviewees identify it as a strategic differentiator. Innovation leads not only to better competitive positioning in the marketplace, but is also the only way for IT to deliver more value for less money.

About the report

The findings in the report are based on interviews and discussions with 21 senior IT leaders in Canada's Financial Services industry on a wide range of topics. The executives were asked questions about business aligned structure and leadership, pragmatic governance, performance-based metrics, product definitions and cost drivers, innovation, and talent management. They were also asked to rank their priorities in areas focused on running IT as a business.

About Deloitte

Deloitte, one of Canada's leading professional services firms, provides tax, audit, consulting, and financial advisory services through more than 7,600 people in 56 offices. Deloitte operates in Quebec as Samson Belair/Deloitte & Touche s.e.n.c.r.l. the firm is dedicated to helping clients and its people excel. Deloitte is the Canadian member firm of Deloitte Touche Tohmatsu.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its Member Firms.

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