In research done with business and IT executives, it’s usually the business executives who put their IT peers on the hot seat. But in the latest McKinsey & Co. survey, fielded online from October 13, 2009 to October 26, 2009 with 444 C-level respondents, 55 percent of the non-IT executives said their IT department’s performance in providing basic IT services was very or extremely effective, an increase over last year’s 50 percent score. For their part, IT executives were less sanguine. Forty-nine percent of them said their IT department’s management of IT infrastructure was extremely or very effective, down from 62 percent the year earlier. And that was the good news!

When it came to rating their IT organization’s effectiveness in several areas the scores the IT executives gave were even lower:

• 30 percent of the technology executives said IT was extremely or very effective governing IT performance,
• 22 percent said IT was extremely or very effective introducing new technologies faster or more effectively than competitors,
• 21 percent said their IT organization was extremely or very effective in driving technology enablement or innovation in business processes and operations,
• 21 percent said IT was extremely or very effective in targeting places in the organization where IT can add the most value.

Now that’s a pretty dismal record. No wonder business people often criticize IT for not being strategic. And while the business executives were reasonably satisfied with basic IT services (giving the 55 percent score cited above), they only scored IT performance in the 30 percentiles (on being extremely or very effective) for on-time/on-budget project delivery and proactive engagement from IT.

Business executives, however, are hopeful that things can get better. They continue to say they want a closer relationship with IT so that performance can improve and the company can be better positioned to handle the risks ahead. That’s a good goal. And it’s one you hear every year in these types of surveys. But I have to admit that I found it depressing that only 16 percent of all 444 respondents said they have put into place tightly integrated business and IT strategies. What the #*!#* is everyone waiting for? Hasn’t this been the subject of countless articles, books and conferences for years?

And it certainly was no surprise that the business respondents who were able to say that their company was successful at integrating business and IT strategies also thought IT was effective--66 percent of them actually claimed this. Likewise, 46 percent of the IT execs that worked at companies with well-aligned business/IT strategies said that IT was effective.

The grim fact, however, is that almost one-half of the respondents said that “business strategy is developed first and used to guide IT strategy” and in this scenario, only 27 percent of business leaders, along with 27 percent of IT leaders, could say that IT was effective. One out of four does not make for a good track record for IT effectiveness.

So what will it take to get business and IT leaders to collaborate and tightly weave together their business and IT strategies? I know I only want to invest in the companies that get this right. They are the ones that will pummel their competition.