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How to change the corporate mind-set towards IT

Nilesh Chandra and Chris Gallacher

CIO Update

15 November 2011

 

The IT function exists to support the business in achieving competitive advantage. However, many business users often see IT merely as a barrier to their initiatives; a function that over-spends and under-delivers. In order to foster a better relationship with the business, IT must strive to change the corporate mind-set and demonstrate that it can be a reliable technology partner for the business.

In this article, we argue that a common engagement model can be valuable and we explore practical ideas by which IT can improve its relationship with the business exploring different strategies that apply to different stages of a service lifecycle from strategy to implementation and delivery.

The IT function exists to support the business. Business and IT leaders recognise this and thus continue to make investments in the IT organization and infrastructure. However, this view of IT as a strategic asset changes as you move down the organisation chart.

To most business users, IT is often a barrier rather than an enabler. IT is perceived as the organisation that says “no” to innovative ideas -- the organisation that over-promises and under-delivers. Much of this criticism is unfair and arises from a lack of appreciation of the complexity of technology implementation and day-to-day management. However, there is also some truth to this criticism. In every organisation there are plenty of examples of delayed projects, unrealised benefits and technology that simply don’t address user needs.

If IT is to have an improved relationship with the business, then it has to be perceived as a trusted technology partner to the business. IT leaders must work hard to address these concerns by fostering a consistent and intuitive engagement model between IT and the business with clearly defined roles and responsibilities, clearly agreed strategy and scope, and strict adherence to priorities and timelines. In the rest of this article, we apply some of these strategies to a standard service lifecycle.

Strategy - Understand the business strategy and ensure IT is aligned to support it.

In our experience, the high level details of a business strategy are well known in most organisations. However, IT often lacks a detailed understanding and appreciation of the business’ expectation from IT to support the execution of the strategy. This happens because IT is seldom engaged by the business during the development of the strategy. Instead, the business groups develop a strategy and then hands it off for “implementation” to IT. As IT begins to implement solutions, the rationale behind the strategy is not well understood and thus incorrect assumptions are made. This undermines the very strategy that IT was asked to support.

  • Learning point: Engagement at the strategy level must include all relevant business and IT stakeholders

 

Design - Involve the business during design decisions.This is much easier said than done since most business users assume that design is a technical activity where they have little to contribute. However, in our experience, the single biggest cause of failure of any IT initiative is flawed design decisions.

One way to involve the business in design is by removing technical jargon from discussions and talking about design decisions from the business point of view. Not only does this ensure that business stakeholders can contribute to the discussion, it also helps IT get a better understanding of the business they support.

Getting the IT organization and the business to talk a common language can help bridge the historical divide between business and IT and go a long way in changing the corporate mind-set towards IT. Business users often have very clear ideas of the solutions and services they want, but do not appreciate the technical complexity involved or the costs of delivering their requirements. This causes numerous instances of “sticker-shock” as well as the common refrain “Our IT organization is so expensive, we could get external contractors to come in for half the cost”, or “The solution vendor said this would only cost half of what IT is saying."

In both cases, the most common reason is a lack of understanding of the solution’s total cost of ownership (TCO). By closely involving the business in design decisions, IT can help them better understand the complexity of a technology and TCO associated with any solution or service. Implementing a gated approach to projects can help ensure the right information is prepared and reviewed at the right time. This can avoid the common “throw it over the fence” approach whereby the operations team are left picking up the pieces in order to provide a sustainable service.

While IT needs to refrain from using complicated jargon when describing the solution and they also need to describe value in business terms and metrics, e.g., the output of a payroll service is number of payees/pay checks issued rather than 99.99% server availability.  In contrast, the business needs to understand that IT should be considering the availability, capacity, continuity and security requirements of the solution as well as the utility or functionality required and these requirements can drive up TCO.

  • Learning Point: Time and effort spent engaging at the design phase will pay dividends by reducing costly errors that may only be identified after solution build and test.

 

Transition - IT has to educate the people who will be most affected before new solutions go "live."

During the transition of any solution to live status, one of the biggest complaints from the business is that IT makes flawed assumptions and plans that result in the transition not being very smooth. For most end users in the business, the testing part of transition is their first contact with IT for a new implementation (whether of a product, platform or a service) and any problems in transition simply feed a negative impression that lingers for a long time afterwards.

IT can address potential issues in transition by engaging in detailed transition planning involving business stakeholders. IT must ensure the plans are realistic and take into account business concerns with the aim of standardizing on the approach, from small modifications through to large deployments, to ensure the correct level of due diligence is performed.

Throughout the whole transition period IT and the business need to work collaboratively by providing initial pilot support through to end user training. A diligent approach to risk management is also very useful in this context, so that when risks turn into issues, there is a plan to mitigate that can be set into motion quickly.

  • Learning Point: Engagement to plan, prioritise and test changes requires significant effort and involvement from the business and IT

 

Operations - Once solutions and services are live, a common problem faced by the business is inconsistent levels of service.

IT can mitigate this by adopting a common engagement model that is based on service level agreements (SLA). IT needs to work closely with business leaders to understand the relative priority of services and define service level agreements to reflect the business priorities.

Once service levels are defined and agreed with the business, closely track adherence to these service levels and develop a highly visible plan to address any short-comings. Maintenance activities are usually undervalued by the business, yet this typically represents a high proportion of the workload for IT operations team. It is important for IT to clearly show the value these activities provide in contributing to sustained service levels.

  • Learning Point: A formal engagement model will identify these service level requirements at the Design phase, so that they are well understood before the solution is delivering value, and operations can focus on managing the service.  Of course, the engagement model will also have regular service reviews between IT and the business

 

Governance - Having an effective governance framework that covers decision making at all relevant layers within the organization is absolutely critical to success.

In our experience, governance models can become ineffective if either side lets them deteriorate into “food-fights” over budget and resources. In such cases, representatives from the business merely use the IT governance forum to push for more resources and budget to support their priority initiatives and IT loses control of how its scarce resources are allocated.

There may be circumstances where IT has to push out a project -- to close a security hole, for example -- and they must be able to use the governance forum to discuss this priority.  In order to avoid such a fate, IT must engage the leadership of the organization within a formal governance structure and define clear rules for engagement as well as mechanisms for the prioritisation of requests and allocation of budget. This helps to ensure that the business representatives take a holistic view of the business, rather than a parochial view of their own constituency.

IT must also use its knowledge of the business strategy and technological innovations in the market to help define the agenda for technology within the organisation. This does not mean pursuing technology for its own sake, nor does this imply wasting budget on a never-ending pursuit of the next, new thing. Instead, IT leaders can take a practical view on ways to meet the strategic needs by leveraging the most effective technology and present these options to the senior leadership.

  • Learning point: By defining clear rules for engagement and helping the business in setting a technology agenda that helps meet strategic needs. IT can help establish an effective governance mechanism to govern technology decisions in an organisation.

 

In conclusion, changing the corporate mind-set towards IT is achievable but it is a two-way effort between the business and IT; both need to change. By making the changes we have suggested throughout a service lifecycle from strategy, design, transition through operations, supported by effective governance IT can act as an effective partner to the business and help change the corporate mind-set.


Nilesh Chandra and Chris Gallacher are IT strategy experts at PA Consulting Group



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For more information on PA’s expertise in IT consulting and CIO strategy, please  click here or contact us now.

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