A seminary founded in 1795 is perhaps an unlikely venue for high-level discussions of the value of information technology in business. But in June 2011 a number of CIOs, IT directors and industry executives descended on St Patrick’s College in Maynooth, the last major university for priests in Ireland, for just that.
The reason is that Maynooth is also home to the Innovation Value Institute (IVI), a division of the National University of Ireland that researches IT management in business. And the location is not really so unusual – both Intel and Hewlett-Packard have research facilities nearby, attracted by the supply of mathematics graduates from NUI Maynooth.
The IVI’s main contribution so far has been the IT Capability Maturity Framework, a set of capability definitions, assessments and benchmarks designed to allow organisations to articulate and enhance the value that IT contributes to business. The framework splits that challenge into four broad capabilities – Managing IT for business value; Managing the IT budget; Managing IT like a business; and Managing the IT capability. Each of these comprises a number of critical processes, such as innovation management or benefits realisation.
IT-CMF provides an assessment that allows organisations to find out how good their processes are, and therefore the maturity of their capabilities. It also allows them to benchmark their investment in these processes against others organisations.
Even among the assembled IT-CMF adopters at Maynooth, there was an acknowledgment that the framework is just the latest in a long line of initiatives that have promised to resolve the perennial issue of aligning IT to the business. There was also talk of the dangers of ‘framework fatigue’, when the initial excitement about a particular framework gives way to a feeling of being trapped in a set of management guidelines that no longer make sense.
But IVI argues that IT-CMF is different. It says it is the first to focus directly on business value. And because it has been developed in academia, it is not tied to the agenda of any particular management consultancy.
The organisation does have close links to nearby Intel – one of its directors, Professor Martin Curley, is also chairman of Intel Labs Europe. Curley explains that the motivation for Intel’s involvement in IT-CMF is to help organisations get better value from IT, which should in turn lead to more IT investment.
Three examples of IT-CMF in action are presented here, from three very different organisations, although all from the framework’s native Ireland. In each case, the CIO praised the framework’s ability to tackle one of the perennial challenges in IT management – articulating IT’s contribution to the business.
Central Bank of Ireland
Gerry Quinn was in no hurry to learn yet another IT management framework when he was appointed chief information officer of the Central Bank of Ireland last year.
“I’ve lived through many different methodologies and frameworks,” explains the former CIO of Ireland’s national telco, Eircom. “I never recovered from the ‘case engineering toolset’ of the mid-90s.”
However, the bank’s business agenda is changing rapidly. The Central Bank is also Ireland’s financial services regulator, and since the credit crunch the regulatory division has become more integrated. Meanwhile, the organisation has grown in size and profile.
“All this has generated a whole new set of requirements of the bank’s IT department,” explains Quinn. “The expectations for speed, efficiency, business process engineering and information management have all increased.”
To connect the IT department to the bank’s rapidly evolving agenda, Quinn devised a new mission for the department: to generate demonstrable organisational value through business process improvement. “We wanted to try and reposition the IT department away from being a technology factory, towards adding value to the organisation.”
Quinn felt that this change needed to be driven from within the organisation. “I could have brought in a consulting company with its own methodologies, but then it would have become that company’s agenda,” he explains. “You can disenfranchise people when you bring in consultants.”
Instead, he adopted the IT-CMF, which is independent from any particular consulting firm. “It gave us a framework to drive the agenda ourselves, which is a big advantage.”
By defining certain IT management capabilities, and assessing the maturity of the organisation through staff questionnaires, the framework defines a common vocabulary between IT and the business, Quinn argues. “It means you can talk to business colleagues in rational terms about processes, about capabilities and about differences in the way that IT and the business behave,” he says.
Quinn is currently in the process of moving the IT organisation away from a purely functional hierarchy – in which employees are organised in functional silos – towards a matrix structure, where workers may report to project managers or functional managers, or both.
“In functional organisations, ownership [of processes] tends to gets forced upwards: no-one owns the processes at a low level,” he says. “My hope is that I can push ownership of service management, for example, down through the organisation.”
Again, IT-CMF is helping in this regard. “The framework allows us to talk about processes that tie components of the matrix [structure] together,” says Quinn.
Quinn believes it is IT-CMF’s independence, both from the internal IT organisation and from external consulting partners, that allows it to become a shared vocabulary for both IT and business.
“I’m not trying to impose my personal view of IT; I’m saying, ‘Here’s an industry framework, it is not proprietary to any consulting business,’” he explains. “That gives it the credibility to engage both IT and the business.”
When Martin McCormack became ICT director of Dublin’s Beaumont Hospital in 2009, there was, he recalls, a trust issue between IT and the business.
On one hand, the ‘business’ did not trust the IT department with the money to invest in innovation. “IT investment was heavily pointed towards keeping it all running, not changing the business,” he recalls. “That meant the way healthcare was delivered, as enabled by IT, had not progressed.”
Meanwhile, the IT department lived up to the role it was entrusted with. “IT positioned themselves as a support function to the hospital service, rather than an integrated part of that service,” McCormack explains. “They were afraid to take any risks.”
McCormack set about finding a way to restore the trust between IT and the business, and to find a common language for them to understand each other’s concerns. It was this search that led him to IT-CMF.
At a previous conference organised by the IVI, McCormack has heard a presenter ask the crowd of assembled CIOs how many of them could say explicitly what value IT had delivered in the past year. Not one CIO put their hand up.
“I realised then that, although I knew what the IT budget was, I had no idea what value was delivered in return,” McCormack explains. “I talked to the CEO and he agreed that this would be a fantastic thing to do.”
The first step was to undergo the IT-CMF assessment, based on interviews with both IT staff and business leaders. This revealed some of the hospital’s strengths, which included project management, and its weaknesses.
“We saw a deficit in the maturity of our strategic planning,” says McCormack, mainly because so much of the budget was dedicated to ‘keeping the lights on’.
“After the assessment, we could see that we needed to change our culture. Since then, we’ve changed the lifecycle of our projects to include innovation management, and we’ve brought benefits assessment and realisation in at an early stage.”
This has had some direct benefits, McCormack reveals. For example, it allowed the IT department to put together a solid business case for virtualising the server estate and upgrading its storage infrastructure. “We showed that we could deliver a return on investment in year one.”
That in turn is helping the hospital to function better. When the cystic fibrosis team recently asked for its own patient care record system, the IT department was able to get infrastructure up and running in an hour an half. “Previously it would have taken us six months,” says McCormack.
He sees this as a vindication of the decision to use the IT-CMF. “It’s important for us to deliver what we said we’d deliver,” he says
Mainstream Renewable Power
Mainstream Renewable Power is an unusual adopter of IT-CMF in that it is a start-up. Founded in 2008, the company develops offshore wind and solar generation facilities around the world.
Thanks to founder and CEO Dr Eddie O’Connor, Mainstream is a company that has always valued information, and therefore information technology.
“Our CEO has this concept of converting data into information, then into knowledge and then wisdom,” explains CIO John Shaw. “He wanted our organisation to be able to capture wisdom, which gave us a mandate for our technology strategy.”
This explains why one of the first IT systems that Mainstream built was its document management system.
“Documents are the currency of our business, and the process of bidding for a contract is essentially a document management process,” explains Shaw. “You’ve got all this information – from plan drawings of the sea bed to GPS data – that needs to come together as a document to be approved.”
The value of prioritising document management early on has already proved itself, Shaw says. “We successfully bid for a 6,000 MW project from the UK Crown Estate offshore programme, and part of our success came from our ability to make a very compelling argument and to show our position very clearly.”
However, it is not enough simply to recognise the value of a system at the beginning of its life, Shaw says. Instead, organisations must have an ongoing framework with which to define, measure and manage the value of IT resources, to ensure that they continue to deliver.
“Delivering an initial outcome is one thing,” he says. “But managing IT to make sure that it is available, responsive, secure and sustainable is another.”
This understanding is what led Shaw to apply the IT-CMF from the very beginning of the company. Straight after hiring his IT team, he conducted a capability maturity assessment to find out their strengths and weaknesses, and repeated the assessment after a year.
He says that for a start-up, the structure provided by IT-CMF was invaluable. “You have the opportunity to be very creative at a start-up, but there’s also a lot pressure to deliver value very quickly.
“The rest of the IT team latched on to the framework very quickly, because they were anticipating a lot of pressure and it provided them with a common vocabulary with which to focus on value,” he says.
Document management is just one process that has benefited from the framework, he says. “The fact that we could share content with third parties throughout the process; the fact that it was secure and scalable; the fact that we could manage changes throughout our environment – none of these things can be done without a mature set of management processes.”
It has also helped Shaw to assert his Microsoft-only technology policy, despite that fact that the company’s engineers often have their own favourite software packages. “We had an internal customer who wanted their own process-modelling solution,” he explains. “By speaking about value, we were able to show the customer why it was more important to preserve our existing investment [in Microsoft] than it was to try something new for that particular function.”