As Good as IT Gets
Without a doubt, some good IT organizations exist, as illustrated by this McKinsey interview with Marina Levinson, the CIO of NetApp. This organization, like many others, has IT focused on the right principles. I’ve pulled some highlights from the interview as evidence:
| Organizational Component | Organizational Principle | Levinson's case-in-point quote |
|---|---|---|
| Vision | IT as a business enabler | “Never want IT to show up in a quarterly report as the reason the company didn’t meet its revenue numbers” |
| Decision Rights | Business leaders held accountable for getting value from IT | “Business to justify its IT investments and to present a tangible return on investment for all projects” |
| Processes | Fast-cycle innovation tied to long-term interests | “Deliver tangible business value within 90-day increments” “Build quickly while also looking at least two or three years ahead” |
| Staffing/Skills | Business people are smart about IT and IT people are smart about business | “IT leaders who challenge [the business]” “Each cross functional process has a sponsor at the senior or executive VP level…with operational leader whose responsibility includes that business process” |
| Motivators/Values | Top-line and customer focused | “Any system that allows us to get closer to our customers and partners...” |
This is good, but it isn’t nearly as good as IT can get. That’s because Levinson’s model is still based on the current IT operating framework, which has two inherent flaws, which she herself acknowledges:
- Governance slows down innovation. (Levinson: “Folks in the lower levels of the organization occasionally criticize the process as painful and time consuming.”)
- Delivery of services remains within the domain of IT. (Levinson: “Don’t worry about how we are going to get there”)
As a result of these flaws, passionate professionals looking for IT approval and resources are forced to wait in line before they can test and implement their great ideas. In turn, the business’ overall capacity to innovate is diminished.
Improving on this flawed model is a good idea, but it’s not the end goal.
The end goal is to manage IT as an organizational asset, not an organizational structure. Achieving this goal requires tools that allow everybody in the business - across, up and down the organization – to modify their “applications” and underlying infrastructure. What Excel was to innovation in the 90’s and business intelligence to the ‘00’s, tools can be developed (such as the ideas embodied in business process management) that encourage IT self-sufficiency and reduce the need to funnel all IT requests through IT.
Of course, reaching that goal won’t happen overnight – maybe not even in the next decade. But there is much that you can do to bring the future forward:
- Accept that managing IT assets is your responsibility, just as managing financial or human resources assets is. That means you fix your IT “systems” just as you would fix your budget problems or employee problems.
- When IT asks you to expand your role leading IT-enabled business change, don’t assume that IT is trying to shirk their responsibilities. Agree to share the responsibility.
- Get smart about IT through education, hands on interaction and problem solving with your current systems and consumer technologies.
- Refuse to promote ideas that don’t include commitments to realize tangible value (process measures are a great way to define and manage value).
- When defining system requirements, insist on functionality that will “externalize the logic” so that much of the enhancement and maintenance can be done by your team without involvement from IT.
- Learn how to manage projects and change, perform business process and data analysis, and start complying with IT standards and processes. Doing so will earn you the right to manage internal and external IT resources yourself rather than through IT.
The truth is business leaders have always wanted direct control over information technology, as evidenced by their willingness to create “shadow” IT organizations, select technologies without involving IT, and contract directly with vendors.
Governance clamps down on these IT “end runs” but it harms the innovative process. It’s time to start moving to a new model that enables both innovation and distributed control over IT. To start, leaders need to get smarter about IT and assume control over the IT assets that fuel their business.
Share your views – how are your business leaders getting smarter about IT?
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Comments
Susan,
I think that the definition of value in IT as to go further than ROI.
ROI was good at the beginning, when ERP or similar were able to reduce costs by cutting personnel (sw costs $X, we save $Y in heads).
What's the ROI of a upgrading (or not upgrading) a service? What's the ROI of moving from 98 to 99% of availability of email? What's the ROI of installing a CRM system?
We have to move to a different definition of value.
PierG
http://pierg.wordpress.com
- Posted by PierG
June 17, 2008 4:37 AM
Because technology and the use of IT systems are highly integrated into most organizations, the "value add" occurs only when the senior management TEAM (including IT) work together to provide: 1) clear prioritization of IT investments, 2) accountability for defining and achieving success, and 3) methods for keeping the business engaged in the change management process. The IT department must be capable of guiding the process thru education of the business executives while the executives must have an open to listen and be willing to do some of the heavy lifting (i.e. dirty work) that occurs as part of change management. Too often the integration and change management tasks seem to be abdicated to levels of the organization (both IT and business) where the opportunity to support change is not available and the outcome is either broken or duplicate processes and lost opportunities to garner the power of new functionality.
- Posted by Marty Luffy
June 19, 2008 4:50 PM
Susan,
I'm not sure I completely understand your point, but it sounds like you're advocating decentralized IT or taking it all the way to outsourcing IT. The points you made about IT being a bottleneck and seeing governance used as a way to keep order in the queue of work needing to get done is exactly what I experienced at a large financial services company.
In our case, the executive team woke up and realized the weren't getting the benefits IT had promised, were waiting far too long for solutions, and were hostages of an unwieldy governance process. Solution? Fire IT and use dedicated services providers aligned by business unit. Yes, there was addition work involved in service monitoring and account management, but the environment changed almost overnight once IT started having to earn the business or lose it to outside competitors.
Thank you,
-Russ
- Posted by RustyS
July 23, 2008 2:00 PM