When 'IT Alignment with Business' Isn't a Buzzword

of most imminent strategic return.

CIO: In your talk, you said an economic downturn can be a time of significant opportunity for your internal development staff.

Winright: Businesses in Michigan are acutely aware of the economic downturn. Our health plan directly supports those businesses, so we are optimizing our spending just like everyone else.

Maximum benefit must be gained for every dollar spent. Every area of the company is competing for expenditures in ways they weren't before.

Yet when budgets are cut, business' core values dictate keeping talented people. In IT, a talented development organization can seize the opportunity of frugality and provide help across a plethora of business opportunities in an extremely cost-effective way. Developing applications using internal resources and open-source technologies have a more favorable cost portfolio than do third party vendor applications with their extensive implementation costs and recurring, escalating maintenance expense. Additionally, the decline of major third-party software implementations allows IT more bandwidth to partner side by side with the business.

CIO: What other steps have you taken to win trust?

Winright: We converted costly contracted labor associated with MOOSE to internal staff. Given exposure to the true cost of our business applications, we ferociously negotiated costs with our vendors. We took advantage of virtualization and other convergence technologies to maximize benefit from spending, and eliminated over 10 items from our environment (such as consolidated environments, consolidated hosts through virtualization, converged to one scheduler) in this first year by embracing the theme of convergence.

The fruit of our labor is an estimated 12 percent reduction in expense spending (actual dollars spent) in 2008. More importantly, we have proven a 6 percent shift of spending from existing service costs to new services. This is a powerful message to share with business partners. They will ultimately benefit when 6 percent more IT spending is directed to new initiatives rather than to existing services costs.

CIO: What's been the most painful part of this process for you?

Winright: Two things. First, it was difficult and time consuming to gather all actual budgetary expenses and tie them to a specific service. For most organizations our size, this information is held across several cost centers and managers, and the technical infrastructure itself is complex.

Second, it is always difficult to take 90 technologists and get them aligned around common themes. We continue to strive for internal alignment and eventual embodiment of these themes.

CIO: Pretend for a moment you are speaking to peer at an organization the size of Priority Health or a little larger. What advice would you have on quick wins, and things to do tomorrow?

Winright: Although painful and time consuming, it is imperative that you and your business peers understand the complete picture of IT spending in terms of business strategy. Then, and only then, will transparency into IT spending be an effective tool to increase business alignment.

Get your internal resources aligned around common themes, because an aligned group of highly intelligent people on a singular mission can yield incredible results.