Thanks to Confused for this article from the always readable Andrew McAfee. He summarises the problem I and many in positions who work closely with technology groups, fully understand. (emphasis added)
Adding to executives’ diffidence, corporate IT projects have often delivered underwhelming results or been outright failures. Catastrophes – such as the one at American pharmaceutical distributor FoxMeyer Drug, which went into Chapter 11 and was sold in 1997 when a $100 million IT project failed – may be less frequent today than in the past, but frustration, delay, and disappointment are all too common. In 2005, when IT consultancy CSC and the Financial Executives Research Foundation conducted a survey of 782 American executives responsible for IT, 50% of the respondents admitted that – aligning business and IT strategy – was a major problem. The researchers found that 51% of large-scale IT efforts finished later than expected and ran over budget.
Only 10% of companies believed they were getting high returns from IT investments; 47% felt that returns were low, negative, or unknown.
Source: Mastering the Three Worlds of Information Technology
His main point, is that failure to understand or appreciate technology is unacceptable.
Executives need to stop looking at IT projects as technology installations and start looking at them as periods of organizational change that they have a responsibility to manage.
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But managers who distance themselves from IT abdicate a critical responsibility
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executives usually operate without a comprehensive model of what IT does for companies, how it can affect organizations, and what managers must do to ensure that IT initiatives succeed.
To help us business types understand technology he derives a model with three types of IT; Function, Network, and Enterprise:
Enterprise IT has the following primary capabilities:
- Redesigning business processes. Because CVS employees couldn’t fill prescriptions until they had completed the two checks in the new sequence, the revamped fulfillment process wasn’t just a good idea in theory—CVS employees had to execute the process in that particular sequence. EIT gives managers confidence that employees will execute processes correctly.
- Standardizing work flows. Once companies identify a complementary business process, they can implement it widely and reliably along with the EIT. CVS rolled out its new process in 4,000 outlets across the United States in less than a year.
- Monitoring activities and events efficiently. EITs can allow managers to get an accurate and up-to-date picture of what’s happening throughout the enterprise, often in something close to real time. CVS’s software lets executives know how many prescriptions are filled every day in each location, how long it takes to fill each prescription, and what kinds of fulfillment problems employees had to tackle.
Across the three IT categories, executives have three tasks:
IT selection
The discussion centres on the importance of clearly understanding the business requirement first, then the technology requirement will be clearer.
Once the company’s business needs are clear, the technologies it requires will come into focus
IT adoption
The biggest mistake business leaders make is to underestimate resistance when they impose changes in the ways people work.
IT exploitation
A business leader’s third IT-related responsibility is to extract the maximum benefit from technologies once they are in place
Its all good stuff, and forms the basis of a model to have an intelligent conversation with the IT groups.
Bankwatch 