During a recent recruitment campaign for the head of IT delivery at a leading retail bank, one of the nine shortlisted applicants, George Stantin, stood out from the rest of the candidates for what might have been perceived as the wrong reason: he did not have a technology background. Stantin had previously been a regional sales manager and a branch manager at the bank, but he had always harboured strong enthusiasm for the application of IT in business. He got the job.
Stantin now sits in the bank's retail business, but he reports directly to the CIO. A team of business relationship managers (BRMs) report to him as their IT director, but are also scattered around the organisation, creating a network that bridges both IT and the business.
The rationale behind this approach was overt: to involve the IT department much more closely with the business it serves, ensuring that the traditional divide between IT and the business is narrowed.
Historically – and for an assortment of reasons – success rates of IT projects have been shamefully low. More often that not IT gets the blame for failing to absorb business requirements and therefore successfully deliver the systems it requires. The impact can be extreme: negative headlines, demoralisation, wasted time, money and resources, and above all, simmering distrust of the IT function.
Research conducted by project management software vendor Primavera, found that a third of CIOs experience project ‘failure' at rates of between 40% and 70%. Such patterns have placed a heavy burden on IT management to improve communication and understanding between IT and the business, and so increase the likelihood of projects being delivered successfully.
Moreover, current attempts to drive down costs and simplify the IT landscape have resulted in the centralisation of many IT departments and the consolidation of data centres. This has had the effect of sucking IT expertise out of the regions and the business units, and into much less distributed IT organisations.
Pearls before swine?
Drinks giant Allied Domecq, which operates more than 50 businesses, mostly across the UK, North America and Spain, found the fragmentation brought about by a string of acquisitions had sent costs soaring. So Brian Jones, who was appointed CIO in 2002, launched the ‘Transformation Programme' to centralise IT. But to avoid the problem of isolating the IT department, he introduced a number of business relationship managers, each tasked with keeping the lines of communication open.
"[They] are internal account managers, responsible for all of IT demand, prioritisation and management of services to the business units to which they are responsible," says Jones. BRMs are responsible for communicating IT opportunities to users, fighting on their side for discretionary investment and understanding regional requirements. It is a strategy that is working.
For example, at its Mexican agave plantations – the source of the succulents that are fermented to make tequila – the touring BRM was instrumental in absorbing the message from local management that they needed help with tracking the health of the highly valuable plants. The solution from centralised IT was to provide RFID chips that monitored each agave, checking for disease and temperature and humidity changes.
According to Bob O'Keefe, professor of information management at Surrey University's School of Management, the inherent reluctance to place staff directly in business units is a result of the acute shortage of IT skills throughout the 1990s; back then, IT staff were regarded as a precious resource that needed to be carefully nurtured and deployed.
Now skills are more readily available and there is much greater pressure on IT to foster links with the business – and for skills to flow in both directions. It is now common that management training schemes such as MBAs incorporate IT as well as business training. This creates an environment where IT issues are better understood and appreciated. "It is very different to taking someone who's been in IT for 15 years and plonking them in the business, where they will sink," says O'Keefe.
Lesley Ottery, director for business improvement at West Sussex County Council, has spent her career encouraging IT staff to get closer to the coalface in order to understand the front-end customer. That career includes posts as director of IT at British Nuclear Fuels, CIO at airline communication services provider SITA SC and technology services company Fujitsu Consulting, and director of information services at British Gas. She emphasises the need for physical proximity as well as the need for close communication between IT and the business.
"It's all about sitting side by side, creating a location in which both parties are physically close," says Ottery. At Fujitsu, this eliminated any sense of hierarchy, or ‘fish out of water' syndrome, and allowed the professional change managers (as they were called) to act as interpreters. These positions were created by Ottery when Fujitsu abandoned its global IT operation in favour of local departments.
At construction and technology services provider Aker Kværner, the divide between IT and business units was so great that it was delaying projects. "We get feedback from programmers that business departments are often not able to provide a detailed enough specification at the start of the project, which leads to project overruns and overspends, which both departments are then blamed for," says Alison Adams, VP of group financial systems at Kværner. The solution was to create a shared services group, taking elements from both IT and business units.
Some vendors providing tools in this area, such as Primavera, have developed project portfolio management (PPM) software that enables IT and business units to work collaboratively on projects, sharing visibility into progress, the impact of changes and resource consumption. Arguably, such tools obviate the need to embed IT staff within other departments or relocate IT professionals.
David Oates, president of international sales at Primavera, says this approach helps keep projects on track: "Most of the stakeholders don't want to spend two hours talking about where a project is if they can look at a screen and see its status instantly."
Others argue that the issue is not technology but people. Chris Edwards, professor of management information systems at Cranfield School of Management, dismisses the purely technology-based approach as "utter rubbish".
"The whole purpose is soft skills, and computers can't replace soft skills," he says. "It's all about talking to people and treating people in different ways."
While Primavera's Oates concedes that tools are best used to augment co-operative working practices, he believes that the increased focus of legislative compliance will drive the adoption of PPM tools to help regulate projects.
For some organisations the idea of transplanting IT staff into business units – or business managers into the IT function – can be both too daunting and unnecessary. Instead, a hybrid approach is favoured: creating roles that can be filled by staff with knowledge of both disciplines.
Information Age knows of one leading high street retailer which employs business architects in its IT department to act as the prime contact with the business. These are permanent positions for which the IT department is responsible. Secondments are also offered to the IT staff, giving them the opportunity to get a flavour of how the business operates.
While it might be a culture shock for the IT worker to suddenly be dealing face-to-face with customers, they soon pick up an intimate understanding of how business is affected when the stock system fails to replenish the shelves. As a result, the IT department is more advanced in thinking about business processes.
Training IT about operations can help them flourish within the business; indeed, planting a technologist in the business without adequate training will result in disaster, says O'Keefe.
"IT people become scapegoats, like traffic wardens, and will just get grief," he warns.
Paul Coby, CIO of British Airways, says there is a new maturity of understanding in the business world about IT. Until relatively recently, many senior executives could be sold systems that were more promise than actual business improvement, because these executives had no real understanding of what was going on, he says.
That is no longer a characteristic of the senior management of BA: "Rod Eddington [chief executive] and indeed Willie Walsh [chief executive designate], absolutely do get how technology is used."
That level of sophistication among senior management is no accident – and Coby has used several approaches to cultivate a greater understanding.
"We put quite a lot of effort into education, if that is the right word, to get people using technology," he says.
After becoming CIO in 2001, Coby appointed a technologist to the job of looking after the technical requirements of BA's leadership team "because you want them to be able to use this stuff". That has stretched from issuing them with iPAQs (when the PDAs were seen as executive fashion accessories) through to ensuring they are not having problems with their wireless LANs so they can use their laptops at home. "It takes the fear away," says Coby.
Aside from the dedicated handholding, senior management are exposed to IT in other ways. The IT division runs an annual IT Fair and a ‘What's New in IT' forum, plus distributes a monthly newsletter that talks about where new technology is going – "both the ‘lemons' and what some of the good things are", he says.
That focus on the senior decision makers is not uncommon.
"Having been an IT provider for many years, we always provide the gold service to the executive level team," agrees West Sussex County Council's Ottery. "You differentiate, but you differentiate for a purpose. Why would they give you money if something as simple as their printer isn't working?"
All such efforts may be paying off. There is a building mound of evidence that suggests the divide between IT and the business is (slowly) being bridged. In 2005, 8% of Cranfield's MBA graduates came from an IT background. Likewise, a 2005 survey funded by global online learning provider SkillSoft found that 84% of IT employees know their organisation's business objectives; other functions average just 69%. And as a new generation of tech-savvy graduates hits the job market, so the business's inherent understanding of IT is improving.
"It all goes back to that principle of better IT service delivery," says Ottery. "If your service delivery is rubbish, then you're building on sand." To promote better understanding and empathy across the organisation, ensuring that the right balance of people, process and technology is achieved, is of mutual value to both IT and the business.
Back at the bank, IT director George Stantin wraps up a meeting in which his team of business relationship managers are conveying the IT concerns of branch-based financial advisors with regard to a proposed voice over IP implementation. He leaves his office in the retail business department and heads over to the IT department to report to the CIO for his monthly performance review, in which the MD of the retail business will also be present.
As organisations gradually learn how to promote collaborative working between IT and the business, so they will place even more value on those who act as interpreters. "In terms of pay and rations they are typically pigs in the middle," says Edwards. "But if you were to step forward 10 years I have no doubt they will end up on the business side."