Even IT managers sometimes have difficulty justifying their existence. Their case is not enhanced by the lack of proper benchmarking standards and agreed methodologies for discerning the wise IT investment from the potentially disastrous.
The culture of divisional accountability that has grown up in organisational leadership and the rapid emergence of more technically savvy managers, is highlighting the problems associated with making excellent IT decisions. The combination is, consequently, stalling good deal of IT investment.
IT decisions are being put on hold and it seems no one gives damn. Corporate envy over what has been an ever-increasing slice of expenditure on IT is, in part, finding expression. According to IDC researcher Peter Hind, who deals with hundreds of IT bosses every year while running his InTEP Forum programme for IT executives across New Zealand and Australia, “funds are not being allocated by business leaders to projects. That reflects that business leaders are driving the ship.” Management generally has jaundiced view of IT, according to Hind. “It probably reflects tough economic times and perception that IT has failed to live up to past promises.”
IT has always been complex investment area because it is as much about infrastructure as it is about particular functionality. The expenditure across these two facets of IT has been conveniently confused for years providing IT bosses with wide range of excuses for explaining over-spent budgets and failed projects. good IT decision demands that the two issues be separated and justified independently. Failing that, project should stand on its functionality gains alone, with the infrastructure benefits delivered as bonus or vice-versa. In the current fiscally tight environment organisations want to know where each cent is going and insist that each cent spent makes money.
The danger in recent years has been management’s increasing tendency to ignore the IT department and go it alone. On the other hand, IT executives claim in their defence that it was hyped-up business leaders who drove the dot-com boom and bust.
Consider the case of sales division that wants Customer Relationship Management (CRM) system to increase the efficacy of its customer contacts, reduce complaints and increase sales per customer.
The division has no interest in infrastructure. It just wants the functionality. Eager-beaver software vendors are always happy to sell it to them. They’ll even take them to lunch or dinner, and maybe toss in an overseas trip to show them how to get what they want. I interviewed number of CRM vendors and none target the IT manager.
In these days of the internet and invasive technology every manager must or is assumed to be tuned in to IT. If only it were that easy. The IT department is still racked over the knuckles if the solution doesn’t work and integrate with the rest of the systems. IT decisions are very much an infrastructure and compatibility issue that can lead to marked conflict with the requests of the divisional manager.
The IT boss is now heavily exposed to decisions made by divisional managers, who know just enough about IT to be dangerous. As Queensland Health state manager information services Anton Donner recently said: “The big problem for IT managers is that the business managers want to get involved. Then the vendor will sell to the business manager and the IT manager is seen as speed bump.”
But in the wake of the dot-com bust divisional managers seem to realise they are out of their depth and are holding back from making IT decisions. They are reluctant to deliver the next IT cock-up. In some cases they’ve tried to involve more people in the decision to spread or avoid responsibility. Committee meeting deadlock follows.
IT managers are fighting back. They are looking to recentralise again. While business units are holding off major IT projects, IT departments are piloting or implementing ‘thin client’ projects that put terminals on the desk and run all IT from central servers as they did in the good old days. They argue that if divisional managers are going to go their own way then there is perhaps no other way to regain control and do their job of providing sound IT solutions.
This should not set off alarm bells. It is simply case of considering infrastructure and functionality separately. These are questions that the IT department can take the lead on because no one else will champion the cause.
Server-based computing systems are likely to be economical because they allow for lower cost centralised maintenance and the elimination of the PC replacement cycle. They do this by extending the life of existing PCs by reusing them as terminals. This is the IT department at its best, cutting costs out of the organisation.
IT managers are also investigating storage resource management. Storage is generally regarded as the highest cost component of IT but analysts such as Gartner say up to 60 percent of storage is wasted. This can be reduced to 20 percent through analysis and good management.
Out of the conflict new business model is emerging – partnership and team between divisional leaders and IT managers. It is an acknowledgement that IT knows what it’s doing, but that the impetus for particular project should come from the division involved. To that end other managers must learn all they can about IT and set aside think time. IT investment management is the third major skill set, along with people and finance, that complete manager needs. “Organisations have three key resources – people, money, and technology. Managers should know how to lead people, how to leverage money, and these days how to leverage technology,” says Donner.
The IT manager as witch doctor is gone He or she is now consulting physician.
“IT is not the saviour people thought it was 10 years ago,” says Hind. “IT’s role is to organise and advise on the investment portfolio and to leverage the technology just as the finance manager’s job is to leverage the balance sheet, leverage the financial aspects of the organisation,” adds Donner.
The two-headed approach, with appropriate financial and strategic signoffs on top, is essential to get projects through speedily and pragmatically. It’s also about ensuring someone has the overall ‘town planning-style’ picture of the IT infrastructure. IT is not something you can change every month. It is long-term investment that determines the way in which company operates.
Despite the current stalling of major IT projects, Hind believes that in the long run IT decision-making will return to the managers experienced in working closely with the IT department. Then the decisions will pay off with more successful projects. M
Richard Wood is an Auckland-based freelance journalist who has previously edited number of IT publications in New Zealand and Australia.
