Has IT really moved on?

This week I have been reading an interesting yet somewhat antiquated book first published in 1993 by Harvard Business Revenue called "The Business Value of IT".  Comprising a set of detailed, real-life case studies written by a number of CIOs and IT managers in high profile global companies, the book covers the challenges that they faced and the IT strategies they used to achieve success.

Given the age of the book in relative terms, you would expect this to be a quaint snapshot of a bygone era, but the really interesting thing is that the problems these guys faced in the early 90s would be easily recognisable by the CIOs of today.  This raises a somewhat embarrassing question - have things moved on in IT, or are we actually just going round in circles?

The iPad 3 will incorporate a new, intuitive user interface.

These guys, speaking from within very notable companies such as British Petroleum and Andersen Consulting (now Accenture) faced the big strategic decisions that are still current today:

• How to respond to rapidly changing customer needs
• How to make IT more 'human-centric' - what we would now call Business-IT Alignment
• Whether to insource or outsource IT
• How involved should CEOs be in IT decision-making?

So why haven't things moved on?  Almost 20 years later, shouldn't we be living halcyon days of a mature IT organization playing the shining star in the business? - driving the business forward with fast-paced innovation.  The truth is that we're not quite there yet, but we're getting there.  As the old device-oriented perspective is pushed aside to make room for more service, business and human-centric paradigms, the IT body of knowledge is finally growing out of adolescence into maturity.

We don't know what it is, but they said it's going to solve all our problems

It has become obvious that those IT organizations that have achieved notable success in supporting business with a competitive edge have been driven by people making the right problem-solving decisions, not the implementation of raw technology as a silver bullet.  To twist the words of Ronald Reagan in his inaugural speech - technology is not the solution to the problem, technology is the problem.  Technology is a means to an end, and will only ever deliver true value when deployed in the context of good strategy, good processes, good people, and good business decisions.  If any one element is missing, or one link in the chain is weak, there is a higher risk of project failure and IT will continue to tread water.  Much time is wasted on continually changing one enterprise technology toolset for another - and every time the promise is that 'this one is the one that will solve our problems'.

For those that are interested, "The Business Value of IT" is available from Amazon. A brilliant, readable book for anyone involved in IT.

So has IT moved on?  Has IT delivered what we were promised?  Answers on a punched card.

Business Technology vs. Information Technology

Business technology isn’t about different technology; it’s about a different way of thinking about technology – as a means to an end, not just a raison d’etre for the IT group.  Communication is the lynchpin of a business technology approach, allowing both groups to integrate and understand each other’s objectives and challenges in order to work together towards the ultimate objective of the organization – generate revenue.

 

Unify IT with the business

The term business-IT alignment has been around for a long time, but many organizations are struggling with putting this somewhat ethereal objective into practice.  IT needs to become part of the business, not just a ‘business partner’.  But what does this really mean?  It is difficult to devise a concrete strategy for integrating IT into the business to form a unified entity and dissolve departmental silos.  Fundamentally, it’s about involving both groups in business processes.  IT needs to be involved in business decisions and the business must be involved in IT decisions.  That means having business and IT people sitting in the same room when decisions are made – getting IT people involved at the earliest possible stage in new projects before there is a clear requirement for IT services and support and getting business units involved when IT is making changes to business systems.  IT can provide valuable automation solutions to business processes, and the business can communicate how changes will have impact in the context of customer interactions and patterns of business activity.  Business Technology goes beyond alignment, beyond integration – it’s about creating a symbiotic relationship between business units and IT to create a single aggregate business entity.

 Burt Reynolds 'gets' Business Technology

 

Measure IT with business metrics

The accepted metrics for IT mean nothing to the business.  99.999% availability might be considered a worthy goal for an e-commerce system, but if the 5 minutes of downtime that does occur coincides with, or is caused by, the busiest business period of the year then IT has failed to meet the needs of the business.  Business impact is simply not represented in this metric, so it hides a problem that IT won’t identify and ultimately address.  They need to understand the patterns of the business so that they can properly reprioritise incidents, problems and changes based on what is important at the time – e.g. which service interruption is costing the company most money.  In short, Business Technology metrics have a dollar sign in front of them to indicate how well IT is supporting business objectives.

 

Scrutinize both the business and IT when there is a failure

When IT fails to meet the needs of the business, the failure must be scrutinized to identify the problem and changes that must be made to both infrastructure and business process.  Fault does not always lie inside a little grey box – communication, competence and process could be at fault.  If an IT department decides to take a system offline over a holiday weekend, they might not be aware that it’s traditionally the busiest time for the business.  Is that a fault in IT, or a fault in the way the company communicates?

 

Tackle IT overspend to focus resources

In the past, technology has enjoyed a ‘silver bullet’ status, with technology investment taking a huge slice of the annual budget pie.  The current economic climate is exerting huge pressure on CFOs to identify savings, so they are naturally turning the microscope on the mysteriously opaque IT department and its massive price tag.  As a result, justifying budget is a number one challenge for the CIO.  If IT investment is justified in business terms (a difficult task) then the identification of redundant IT is a useful bi-product of this process.  Software and infrastructure that does not contribute tangible business value can be shut down or reassigned to form an IT function that is more ‘right-sized’ to the needs of the organization.

 

Takeaways:

• Business technology is technology that adds value to the business.  If it doesn’t add value, it’s probably redundant IT ready for the chop.
• Tackle IT-to-BT transformation service by service – prioritised by business importance.
• Extract the silver bullets - consider all IT to be legacy IT until its value has been proven as BT.
• CIOs should be pro-active about cutting costs now, before the CFO wields the hatchet.