Business and IT managers at some leading companies have been working together to change the way information technology supports the enterprise. As a result, they have cut the cost of IT, made it easier to change the business, avoided the constraints of inflexible support systems, and increased the participation of business leaders in the management of IT.
As companies that binged on new IT systems during the late 1990s know, insufficient business involvement in IT programs can depress returns (see "What CEOs really think about IT"). To avoid repeating this mistake, business and IT managers are starting to gather IT systems into "domains"—sets of applications and databases that are managed as units for business reasons—instead of managing them on the applications level or organizing them by the types of computers and operating systems on which applications run.1 A company might, for example, bring together the systems that contain customer information and rethink the links among them; in this way, it streamlines the tangle of interconnected systems, roots out duplication, and retires unneeded applications, thereby slashing its maintenance and development costs. IT employees find it easier to change or scale such systems and can thus support...