SIX IT DECISIONS YOUR IT PEOPLE SHOULDN’T MAKE – SUMMARY This article focuses on the disconnect between IT employees and Non-IT executives. Specifically how the non-IT executives don’t understand IT well enough to manage it in detail and how IT people, although they work hard, don’t seem to understand the very real business problems that the non-IT executives face. -Most CEOs / COOs / CFOs don’t believe much business value is obtained from high-priced IT capital outlays. -Additionally, according to this article organizations are not generating the value from IT investments that they could be, i.e. under using the system. Companies that are managing IT successfully generate returns that are as much as 40% higher than their underperforming competitors. Biggest difference between underperforming entities and those that utilize IT efficiently is that Sr. managers at the successful entities take a leadership role in a handful of key IT decisions. When this decision making is left up to a few IT executives, chaos often ensues. IT executives fail to realize that adopting systems poses a business, not just a technological challenge. 6 IT Decisions that Senior Management Should Take Leadership Responsibility Over: 1.How Much Should We Spend on IT? -The two concerns are that either you are spending too much or too little. The successful companies define the strategic role that IT will play in the company and then determine the level of funding needed to achieve that objective. Failure to approach IT capital outlays with this mentality can result in an IT platform that will not further the company’s overall business strategy despite the high IT spending. 2.Which Business Processes Should Receive our IT Dollars? -IT initiatives can multiply quickly, yet they are not all equally important. Additionally, Sr. managers are often reluctant to step in and choose between the projects that will have a significant impact on the company’s success and those that provide some benefits but aren’t essential. Sr. managers need to differentiate between the two and make the hard but clear decisions about which IT initiatives will and will not be funded. Failure to do so will result in an IT unit that is overwhelmed and tries to deliver many projects that may have little companywide value or can’t be implement well simultaneously. 3.Which IT Capabilities need to be Companywide? -Executives are recognizing the significant cost savings and strategic benefits that come from centralizing IT capabilities and standardizing IT infrastructure across an organization. Unfortunately, standards can restrict the flexibility of individual businesses units limiting the company’s responsiveness to differentiated customers. Sr. managers should decide which IT capabilities should be provided centrally and which should be developed by individual businesses. Excessive technical and process standardization limits the flexibility of business units, or frequent exceptions to the standards increase costs . 4.How Good do Our IT Services Really Need to Be? -An IT system that doesn’t work is useless. At the same time, every system does need to be wrapped in gold-plated functionality. Characteristics such as reliability, responsiveness, and data accessibility come at a cost. Sr. managers need to decide which features – for example, enhanced reliability or response time – are needed on the basis of their costs and benefits. Failure to do so can result in a company that may pay for service options that, given its priorities, aren’t worth the costs. 5.What Security and Privacy Risks will we Accept? -Security, like reliability and responsiveness, is a feature of IT systems that requires companies to weigh the level of protection they want against the amount they are willing to spend. Increasing security not only involves higher costs but also greater inconvenience. Sr. Managers need to lead the decision making on the tradeoff between security and privacy on one hand and convenience on the other. An overemphasis on security and privacy may inconvenience customers, employees and suppliers; an under emphasis may make data vulnerable. 6.Whom do we Blame if an IT Initiative Fails? -If IT efforts fail to generate the intended business benefits, there often tends to be finger pointing. The thought is that there must be something wrong with the IT function in the company. In reality, the problem more often reveals that something is wrong with the way non-IT executives are managing IT enabled change in the organization. Sr. managers need to assign a business executive to be accountable for every IT project. Failure to do so will result in a business value of IT systems that is never realized.
This article focuses on the disconnect between IT employees and Non-IT executives. Specifically how the non-IT executives don’t understand IT well enough to manage it in detail and how IT people, although they work hard, don’t seem to understand the very real business problems that the non-IT executives face.
- Most CEOs / COOs / CFOs don’t believe much business value is obtained from high-priced IT capital outlays.
- Additionally, according to this article organizations are not generating the value from IT investments that they could be, i.e. under using the system. Companies that are managing IT successfully generate returns that are as much as 40% higher than their underperforming competitors. Biggest difference between underperforming entities and those that utilize IT efficiently is that Sr. managers at the successful entities take a leadership role in a handful of key IT decisions. When this decision making is left up to a few IT executives, chaos often ensues. IT executives fail to realize that adopting systems poses a business, not just a technological challenge.
6 IT Decisions that Senior Management Should Take Leadership Responsibility Over:
1. How Much Should We Spend on IT?
- The two concerns are that either you are spending too much or too little. The successful companies define the strategic role that IT will play in the company and then determine the level of funding needed to achieve that objective. Failure to approach IT capital outlays with this mentality can result in an IT platform that will not further the company’s overall business strategy despite the high IT spending.
2. Which Business Processes Should Receive our IT Dollars?
- IT initiatives can multiply quickly, yet they are not all equally important. Additionally, Sr. managers are often reluctant to step in and choose between the projects that will have a significant impact on the company’s success and those that provide some benefits but aren’t essential. Sr. managers need to differentiate between the two and make the hard but clear decisions about which IT initiatives will and will not be funded. Failure to do so will result in an IT unit that is overwhelmed and tries to deliver many projects that may have little companywide value or can’t be implement well simultaneously.
3. Which IT Capabilities need to be Companywide?
- Executives are recognizing the significant cost savings and strategic benefits that come from centralizing IT capabilities and standardizing IT infrastructure across an organization. Unfortunately, standards can restrict the flexibility of individual businesses units limiting the company’s responsiveness to differentiated customers. Sr. managers should decide which IT capabilities should be provided centrally and which should be developed by individual businesses. Excessive technical and process standardization limits the flexibility of business units, or frequent exceptions to the standards increase costs .
4. How Good do Our IT Services Really Need to Be?
- An IT system that doesn’t work is useless. At the same time, every system does need to be wrapped in gold-plated functionality. Characteristics such as reliability, responsiveness, and data accessibility come at a cost. Sr. managers need to decide which features – for example, enhanced reliability or response time – are needed on the basis of their costs and benefits. Failure to do so can result in a company that may pay for service options that, given its priorities, aren’t worth the costs.
5. What Security and Privacy Risks will we Accept?
- Security, like reliability and responsiveness, is a feature of IT systems that requires companies to weigh the level of protection they want against the amount they are willing to spend. Increasing security not only involves higher costs but also greater inconvenience. Sr. Managers need to lead the decision making on the tradeoff between security and privacy on one hand and convenience on the other. An overemphasis on security and privacy may inconvenience customers, employees and suppliers; an under emphasis may make data vulnerable.
6. Whom do we Blame if an IT Initiative Fails?
- If IT efforts fail to generate the intended business benefits, there often tends to be finger pointing. The thought is that there must be something wrong with the IT function in the company. In reality, the problem more often reveals that something is wrong with the way non-IT executives are managing IT enabled change in the organization. Sr. managers need to assign a business executive to be accountable for every IT project. Failure to do so will result in a business value of IT systems that is never realized.