Tag Archives: Wall St Journal

Are your IT projects ‘drivers’ or ‘supporters’?

By David Bicknell

An article by Art Langer in the Wall St Journal argues that IT projects are either ‘drivers’ or ‘supporters’.

Drivers are those projects and activities that affect the relationship with an organisation’s clients i.e. projects that drive revenue directly or indirectly. Supporters, on the other hand, are those everyday activities that are more operational in nature.

Langer cites the work that Dana Deasy has done firstly at Siemens  and more recently at BP.

He writes: “We all know that executives are more interested in implementing technologies to drive the business, than they are in using cutting-edge technology for its own sake. For Deasy, the biggest challenge was mostly building internal consensus about  how the technology would help  customers–and how Siemens could be more competitive in the marketplace.

“Deasy also had to show his executives that the evaluation of investments in these projects would be different than evaluations of other kinds of IT work. With e-business, the market reaction to different product and service offerings can be less certain.

“So Deasy established the concept of “revalidation.” Approved technology projects were reviewed every 90 days to determine whether they were indeed providing the planned outcomes, whether new outcomes needed to be established, or whether the technology was no longer useful.

“Siemens was moving from a traditional process of analyse-develop-deliver to a new process of sensing what a customer might want, and then responding to it more dynamically.”

Langer concludes by saying that, “The idea that all IT projects must succeed is outdated and unrealistic in true “driver” initiatives. CIOs must learn from Deasy’s lesson: If you are engaging in true “driver” initiatives, you cannot evaluate them on the “supporter” method of simple success rates.”

Interesting piece – worth a read.

How to Develop and Evaluate Strategic IT Projects

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Why ignoring the human factor can lead to failed IT projects

By David Bicknell

In a column for the Wall St Journal, Frank Wander, a former CIO of the Guardian Life Insurance Company, has warned that ignoring the human factor is a sure route to the failure of IT projects.

He points out that, “Sixty years into the information economy, information technology projects, especially large ones, still fail, or under-perform, at disheartening rates. Trillions of dollars of collective project experience, and, what long ago, should have become a predictable undertaking, remains an area of dissatisfaction. Yet, the performance of our technology infrastructure (devices, networks, storage) has made quantum leaps forward over that same time period.”

He argues that workers are the most expensive, but least understood tool. In the insurance industry, for example, talent represents 63% of IT cost, according to a 2011 Gartner report.

He concludes: “As an industry, we must remove this blind spot, recruit the best talent, nurture it and unlock the full productivity potential by designing social environments where the chemistry enables IT to flourish. Companies that understand this, and embrace it, will win; the rest will compete in a race to the bottom.”

IT is from Venus, the Business is from Mars

By David Bicknell

Monday morning and another week for IT and the business to work together in the best interests of the organisation – though if you were to read this article from the Wall St Journal, you might think otherwise.

The  piece, “IT is from Venus, non-IT is from Mars”, by research scientist George Westerman from the MIT Centre for Digital Business, suggests  that in many companies, the relationship between IT and business leaders is a very troubled marriage. Miscommunication is rife, leaving executives struggling to figure out what’s working for the company, what’s not, and how to improve the situation.

The article argues that ‘the marriage’ can be saved, provided IT and business executives have a clearer understanding of the needs of both sides, how they work and the challenges they face. That means business leaders and IT executives must talk with each other about their operations and about how IT can help the company fulfill its goals, instead of talking past each other about how one side or the other is preventing that from happening.

The article cites four separate studies by researchers at MIT that show that transparency—clear communication about IT performance and decision processes—is the best predictor of the business value of IT. These studies all show that transparency creates an environment that improves both IT performance and the IT/Business relationship.

The article discusses four areas where IT and non-IT executives fail to understand each other clearly, and how transparency can help bridge the gap between two completely different interpretations.

On IT Cost and Performance:

The Business says: “IT costs too much; we’re not getting the service we’re paying for.”

IT says: “Given our budget constraints, we’re doing really well.”

On Risk Management:

Business says: “I want it this way.”

IT says: “We can’t do it that way.”

On Prioritisation:

Business says: “I need this right away.”

IT says: “Sure, but three other executives just told me the same thing.”

On Accountability:

Business says: “Why do you make me go through all of this bureaucracy?”

IT says: “Our methodologies are how we make sure everyone does the right thing.”

The article concludes that “creating transparency takes extra time and effort on everyone’s part, especially IT’s. But this is one project that definitely pays. Transparency around performance and decision processes improves the business value of IT and builds trust between business and IT people. As everyone learns to work better together, IT becomes part of the company’s business-level decisions and initiatives, not its own world. When that happens, the marriage of IT and the business side is really working.”

Has the CIO become the Chief Invisible Officer?

I read an article in the Wall St Journal today all about the role of chief financial officers (CFO) in increasing investments in IT to maintain a competitive edge.

The piece refers to a Colorado company, CH2M Hill, which is cutting back on expenses like corporate events and bonuses for employees, yet it plans to boost its $100 million-a-year IT budget by upto 20% this year. In part, the money will go to fund new systems that will make it easier for workers to use a variety of mobile devices on the job.

“We’re very concerned about the economy and trying to take some measures to cut costs,” says Mike Lucki, CH2M’s chief financial officer. “But this is an investment that we need to make to stay competitive. If you don’t do it, you’re not in the game.”

The thought struck me that when I read that quote that how often do you ever hear a CFO talking about getting a competitive edge? Shouldn’t that be the language of the CEO? And, aspirationally, what the CIO should be saying?

There’s nothing in this Wall St Journal piece about the role of the CIO. That’s not a criticism of the piece at all, simply  the fact that CIOs seem to be anonymous in the corporate culture.  As the article suggests, ‘CFOs are often the executives calling the shots on tech purchases. According to research firm Gartner, for instance, 44% of IT departments report to CFOs.’ The article seems to suggest that there are IT departments – but no IT leaders. (Or at least, in this case, none that the Wall St Journal deemed noteworthy enough to speak with)

Has the CIO become the Chief Invisible Officer? Perhaps, to take a line from Mike Lucki’s quote, it’s time CIOs made a strategic investment (in their visibility) to stay competitive, because, to nick another line, “If you don’t do it, you’re not in the game.”

Or has the corporate balance of power so shifted in current times that the corporate officer that pays the piper is so clearly now calling the tune?

Is it time that CIOs started to shout more from the rooftops about their value?

Heads of finance hate big-bang IT projects