CIO Insight Article: Measure of Alignment Predicts Success

In the Fall Alignment issue of CIO Insight magazine, there is a very good article on IT/business alignment. IT consultants Thomas Lodahl and Kay Lewis Reditt talk about measuring IT contribution to profit margins and earnings growth. In the article, Lodahl states "...profit margin is a great measure of performance, because it deals both with revenue growth and cost reduction." Some companies miss this point when it comes to their IT departments. All too often, companies think about IT in terms of cost reduction. These companies ask questions like, "How do we automate to reduce costs? How do we save money on hardware, software?" Those companies that view IT as a strategic partner look beyond costs to the impact of IT on revenue growth. They ask: "How can we leverage our IT to promote revenue growth? What systems do we have, or can we obtain, that add value to our customers and can give us an advantage in the marketplace?"