For years, observers of IT in practice have talked about the business-IT divide, and bemoaned its damaging effects on the many, many organisations affected. And almost universally, they have put the blame squarely on IT, rather than business.
These IT managers, it is charged, do not fully understand business or its methods and terminology; they use too much techno-babble, often using this to shield the shortcomings of their department; they are lured into a self-serving alliance with their suppliers and consultants; they fail to align their departmental objectives with those of the business; and they have poor project management skills. The list goes on.
The impact of these management failures is clear for all to see: expensive project failures – sometimes catastrophic and headline making, more often chronic and demoralising; mistrust and an over-cautiousness about new investment, resulting in lost opportunities; and, above all, waste – of resources, time and money.
But there is a serious problem with this analysis: it no longer appears to be the case that senior IT managers are to blame for most of the problems caused by the misalignment of business and IT – even if this was once true. And that means that if there is still a business-IT divide, and it is still causing problems, then other explanations and solutions need to be found.
The evidence for this assertion is three-fold. The first involves simply looking around: throughout Europe and North America, there are now dozens of executive level CIOs, many of whom have been profiled in magazines and spoken at conferences, who have clearly demonstrated their ability to straddle the IT-business divide. These include Paul Coby of British Airways, Robin Barret of American Express, David Weymouth of Barclays, Ford Calhoun of GlaxoSmithKline and many, many others.
Two recent pieces of research have backed up this perception. CIO Connect, a UK networking organisation for IT directors, recently interviewed 100 CIOs, of whom 80% said that IT spending approval is largely subject to the same processes as other business projects, and three-quarters of respondents said that senior business colleagues are closely involved in managing significant implementations.
The report concluded: “The gap between IT and other parts of the business, which has been a feature of business for so long, is now finally closing. IT is ceasing to be something separate that has to be treated differently, and is instead becoming an integral part of business change.”
This research was partially confirmed at a unique seminar for both business and IT managers recently organised by Information Age, BMC Software, and Cranfield University (see below). At this event, most participants agreed that IT spending approval is increasingly subject to the same scrutiny – if not more security – as other areas of the business. And most said that, in recent years, greater efforts have been made to control IT spending and tie it into business objectives.
But does that mean the business-IT divide is disappearing? Not at all. When both IT and business managers were asked to score their organisations’ performance on five key metrics of alignment such as ‘How well do you monitor and evaluate business benefits from IT investments?’, the average score was 4 on a scale of 1 to 7; but in a smoothly run business, it should be between 6 and 7.
Further discussions revealed a startling array of ways in which the IT departments and the business objectives were not clearly aligned; and in many, if not most of these areas, the business side – and not the IT side – were mostly responsible.
Take just two examples: managers were asked ‘How well do you monitor and evaluate the business benefits from IT investments?’
They gave an average score of 2.8 out of 7, with even very highly regarded, blue chip IT using organisations admitting that those benefits so rigorously identified at the outset of a project are almost never measured. One delegate described benefits as “anecdotal”, another as “a new word in our organisation” and another said that “our business managers have little or no interest in benefits tracking”.
Another example: delegates were asked ‘How rigorous and effective is your project approval process?’ Again, there was a clear contrast between a highly disciplined approach and a completely undisciplined, almost whimsical approach. In several cases, both approaches were evident in the same organisations, with delegates describing how certain high level executives took sudden decisions that bypassed, over-ruled or rendered meaningless existing and carefully agreed projects.
The key finding: The business-IT divide of modern folklore – which causes so many projects to go awry and which causes so much internal friction and waste – still exists. But the true, underlying reasons are very different from those commonly cited.
Three common patterns of behaviour were identified at the recent seminar. First, the historical failure of IT departments to deliver promised benefits, and especially the recent excesses of the dot-com period, has engendered a deep mistrust of the IT function in many organisations. This is compensated for in many ways, including very tight control of expenditure and projects, as well as a reluctance by business managers to stake their reputations by getting too involved in IT-based projects. Frequently, now, IT managers feel themselves to be victimised, undervalued and over-scrutinised – in short, not just misaligned, but maligned.
Second, many of those business managers who have become involved in IT projects do not necessarily impose the same disciplined approach they have for so long castigated their IT departments for lacking.
And third, it is apparent that both business and IT side managers lack the tools and the processes to work together on a project from start to finish. That, in particular, means they have almost no way of measuring to what extent an IT investment is contributing to business objectives after it has begun.
What is the remedy? One starting point is to use some of the available tools and processes. One, the Cassandra methodology, developed at Cranfield University, seeks to identify business objectives, whether financial or not, and link them to IT investments at every stage of a project. This is now used in several organisations.
But the tools themselves are clearly only a part of the solution. One of the most frequently cited fears of many managers is that a rigid focus on return on investment can limit an organisation’s speed of reaction and agility. How many top managers, when pressed on this, are willing to forego their right to make investments on gut feeling in favour of a painstaking benefits analysis?
There is no easy solution to this. However, one first step would be to ensure that all investments, whether gut feeling or painstakingly planned, are subject to a post-implementation benefits analysis.
A few forward looking companies have actually taken the first steps towards this by appointing a Benefits Realisation Manager – a specialist who attempts to ensure that the promised benefits from any IT projects are not only measured, but that efforts are made to ensure they actually happen.