Successful Business Relationship Management: Collaboration for Co-Creation of Value

by Lynette Ferrara and Alex Mayall

Today’s business leadership knows that IT matters. This renewed business interest in IT was confirmed by a recent CSC survey of senior business and IT executives. A surprise that emerged from the survey was that these senior executives viewed the business, rather than the IT function, as the principal barrier to the use of IT (see Figure 1). These executives believe they can best overcome these barriers by working collaboratively with their IT function.

This article addresses the issues of today’s CIOs, who now have the attention of their business. Many CIOs told us they were developing a new role in their organization called a business relationship manager to respond to and cultivate this new business interest in working collaboratively with IT. To determine whether a business relationship management program was the best way to fulfill these new demands by their business colleagues, we conducted 70 interviews in over 30 organizations in the United States and Europe. We found that successful BRM was not just a new role in IT. Instead, both the business and IT had to agree to new ways of working together.

Four distinct collaborative “deals” between business and IT

Invitations to collaborate could mean a wide range of things, from sharing the frustration and disappointment with IT services at one extreme to an offer of a seat on the executive board at the other. There is no one-size-fits-all solution here. The CIO has to interpret requests from individual business executives and then negotiate appropriate agreements on how business and IT will work together. Our research found four underlying patterns in the requests made by the business, and we used them as the basis for four models of business-IT collaboration:

Passive: Business and IT work in isolation. The IT function does what it is told to do, as and when budget allows.

In this model, business executives decide how they want to spend “their” IT budget, and when the money runs out, the work simply stops. In many such organizations, IT has “account managers” who take orders, or else IT expects the business to engage directly with representatives of several IT functions.

Provider: Business and IT continue to work largely in isolation. However, each party appoints a liaison officer, who is expected to bridge the gap.

In the provider relationship, a “business buyer” is responsible for aggregating and communicating business requirements to IT. The IT relationship manager mirrors the responsibilities of the business buyer. While relationship managers are generally chosen for their experience in planning and executing IT projects or services, the critical skill they bring to this role is the ability to manage and set expectations.

Partner: Business and IT work together to achieve joint business goals. IT is regarded as having a specialized, business change support and an enabling role on the management team.

The relationship manager in a partner role serves as a consultant to the business, facilitating the discussion of business objectives, educating the business on available technology, and planning the change programs needed to deliver the desired business capabilities. The business in turn agrees to go through the painful exercise of defining objectives in sufficient detail to enable the relationship manager to provide meaningful advice. As importantly, the business agrees to provide the time and resources needed to implement the change programs.

Peer: Business and IT responsibilities are fused, at least at the top management level. An IT expert is recruited to the top leadership team to drive business innovation and growth. One among equals, he or she is expected to help the remainder of the top team become technology literate. The primary focus is on the needs of the external market.

In a peer relationship, the board of directors seeks new leaders to exploit IT-enabled opportunities in the marketplace. Peer relationship managers come to this role with a wide range of business and IT experience to establish their credibility. They spend much of their time in industry meetings where they can network with their businesses’ customers and suppliers. They are accountable for the IT organizations but delegate responsibility to their lieutenants, whom they trust to deliver the capabilities that will support the business strategy.

Within a business, members of the executive team are highly likely to have different concepts of collaboration. The CFO may wish to deal with a “passive” IT organization that delivers exactly what is asked for and keeps within budget. The R&D function may want an IT “provider” that insulates the R&D teams from the complexity of the IT supply chain. Sales may want an IT “partner” who will proactively suggest ways in which Internet-based technology can support a new customer strategy. The CEO may need a “peer” who will educate the rest of the top team on how IT can generate new opportunities for the business and open up new markets.

Two alternative paths for deploying business relationship management: evolution or revolution

This research began as a study of a role in IT. We soon found that we were in fact studying the evolution of the IT function into a demand-driven organization focused on business results. Relationship managers as well as rank-and-file IT staff are required to learn new behaviors and master more sophisticated management disciplines as the relationship with the business grows.

Any program of change in the role and structure of the IT function has to ensure business continuity during the transition. The most common approach, followed by 60 percent of BRM programs conducted by the CIOs we interviewed, was evolutionary. Typically, the CIO first establishes credibility with the business by achieving a strong track record as a provider. The appreciative business team then invites the CIO and his top team to take on the partner and eventually the peer roles.

Forty percent of the CIOs did not have (or want) the time to improve operations before signing up for the additional responsibilities of a partner or peer. These CIOs were recruited for their track record of solving serious performance problems at the same time as enabling change or driving the business forward. We called this the revolutionary scenario. Here the CIO is typically recruited as a partner or a peer to revive a struggling business or assist a successful business in achieving ambitious goals within a limited time frame. This new leader is often parachuted into an IT organization that is failing to respond to business needs. In order to accomplish his or her mission, the CIO launches a program aimed at rapidly transforming the IT organization. This reflects business demand for IT leaders who are willing and able to radically restructure IT in order to create a dramatic improvement in the function’s contribution to business performance.

Business relationship management will go away when it becomes everyone’s business

The call for improved business relationship management has arisen in response to demands that the IT organization should help the business to exploit opportunities, counter competitive threats enabled by the technology, and to protect itself in the face of increasing regulatory pressures. The IT response includes creating new roles to face the business, new management disciplines, and also redesigning the IT organization to focus on business objectives rather than just managing technology. Once business relationship management is successful, it will no longer be needed as a separate function. At that point, IT will truly be everyone’s job.

Lynette Ferrara is a researcher with the Leading Edge Forum Executive Programme. Alex Mayall is the managing director of the Leading Edge Forum Executive Programme.

  “Business imperatives for information technology – survey report 2005,” CSC Leading Edge Forum -Executive Programme, June 2005