Posts Tagged ‘alignment’

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3 Ways To Fix An IT Department (Suggestions From Europe)

Wednesday, February 11th, 2009

An European Consulting Company Has Some Ideas About How To Organize Your IT Department

An European Consulting Company Has Some Ideas About How To Organize Your IT Department

Kuppinger Cole + Partner (KCP) is a European consulting firm that specializes in identity management. So it goes without saying that they spend their time in and out of multiple IT departments on a daily basis. They know all of our dirty little secrets. One of their founders, Martin Kuppinger has been doing some thinking about how to fix IT departments…

Martin starts out his thinking with some pretty basic suggestions. Specifically, he thinks that IT should be limited in what tasks it performs: do what the company wants you to do and nothing else. Now he follows this up with some clarification: an IT department needs to be able to support new business initiatives, provide insights on how the company is running, and keep itself lean and mean.

I’m pretty much in agreement with Martin, except for one thing. IT is not like accounting: in IT things change and they have a tendency to change quickly. I believe that an IT department has a responsibility to always be pushing the envelope and trying out new things before the rest of the company does. How can you roll a Wiki service out to the company if the folks in IT have not played around with it for awhile in order to get to know its ins and outs?

Martin goes on to suggest that IT should be reorganized. He’s got some interesting thoughts here. He’s recommending that strategy be done in house by the IT department. Next he starts to whip out the acronyms like GRC (governance, risk management and compliance) when he says that part of IT needs to be keeping an eye on how the business is being run and providing reports to all who need them. Finally, he suggests that IT knowledge be decentralized and placed in the business organizations.

I’m going to go both ways here. I’m not sure if IT needs its own stand-alone strategy department. Instead, I believe that IT needs to participate in the strategy planning that is being done for the whole company. What I think is needed is an architecture department that the IT part of the strategy team reports to.

I’m all for having part of IT monitor the business and provide the business with the reports on how it is performing. This is a critical resource that too many businesses don’t know how to do well.

Finally, I think that Martin might be on to something when he suggests that parts of IT should be moved out and into the actual departments that we support. I’m always for getting closer to the customer. There are some tricky questions here about who these IT staffers would report to and how they would be evaluated at the end of the year.

Martin ends up talking about the need for a layer to exist between IT and the rest of the business. His thinking here is that what’s been missing from IT is some sort of business control by which IT can be managed.

Once again, I think that he’s got some interesting ideas here, but I think that he’s missing the mark. I always get nervous when I hear people talking about “layers” because that sure doesn’t seem like the best way to streamline an organization. I do agree that an effective way for IT and the rest of the business to communicate is needed.

My thinking on how best to do that is where Martin and I differ. I believe that he’s hoping that implementation of standardization will result in smooth communications. I beg to differ. At the end of the day, communication will only occur if the proper motivations are put in place to help it along.

I’m just about out of space here, but my thinking goes like this: I believe that IT should be judged on results – how did ITs actions help the rest of the business to succeed? Likewise, I think that part of the way that the rest of the business should be judged is on how well they used the tools and information that IT provided them with.

Do you believe that Martin Kuppinger has the right idea? Do you think that IT should only do what the business asks of it? How should IT be organized in order to make it more efficient? Got any thoughts on how IT staff could be successfully placed in other departments? Leave me a comment and let me know what you are thinking.

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Posted in alignment | 2 Comments »

Can’t We All Just Get Along (In IT)?

Monday, January 26th, 2009
IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

So there you are, manning the laptop, doing your utmost best to guide your IT department and, of course, your company on to greater glories. Do you really need to network with your colleagues at other firms? For that matter, do they really have anything to teach you?

Peter Whatnell over at Sunoco has some thoughts on this subject. Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the importance of remembering to look outside the company for ideas.

Whatnell makes the good point that the colleagues that you network with don’t even have to be in the same industry as yourself. As an example, if you talk with someone who is working in IT for the construction industry and they start to mention how they are starting to use mobile devices to quickly distribute design changes, then you may have found an idea that you can use in your neck of the woods.

One of the big questions that we all deal with is “am I giving away competitive information if I talk shop with a colleague from another firm?” Whatnell makes the point that by now we should all be able to realize that what makes our firms competitive is not the underlying technology that we use. Talking about technology is not going to reveal any big company secrets.

What makes our firms competitive is how we go about using these pieces of technology in order to solve the problems that our firm is facing. This means that even if you and your competitor have access to the same technology, you’ll end up putting it together much differently.

Whatnell believes that the true source of a competitive advantage is knowing exactly how you can use IT to help make your business more successful. One interesting way to do this is to ask key executives how the firm makes money. If they don’t know, then this is an area that IT can help simplify.

In these tough times, it’s interesting to hear what Whatnell has to say about what his biggest challenge is. Sunoco is an oil company – it’s a commodity business that’s competing in a mature market. In order for Sunoco to be successful, the firm is going to have to find a way to become THE low cost provider.

What this means for IT is that we need to find ways to help the business side of the house cut expenses, reduce cycle times, and improve their overall agility. The goal should be to avoid having IT being told to just “cut your budget to help our bottom line.”

In the end, Whatnell says that an IT department needs to have earned its credibility within the company in order to be able to be able to contribute to helping the company reduce costs. The key here is that you need to have already earned this credibility.

Do you routinely meet and talk with colleagues that work outside of your firm? Do some of these colleagues work in different industries? Does your IT department have the ability to work with the rest of the business to trim costs? Do you feel that your IT department has the credibility that it will need to have these discussions with the rest of the business? Leave me a comment and let me know what you are thinking.

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Posted in it strategy | 3 Comments »

3 Secrets That Oil Companies Use To Run A Great IT Department

Thursday, January 15th, 2009
Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

If you had to guess as to what the secret of running a great IT department is, what would you say? Peter Whatnell over at Sunoco has some thoughts on this subject. Peter breaks it down to three key items: knowing how your company makes money, choosing to not run against the company’s culture, and remembering to never fall in love with technology. How hard can that be?

Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the role that an IT department plays in a company’s success.

Whatnell pointed out that the arrival of a global recession has caused all IT departments to take any plans that they had created prior to the end of August and basically throw them away. The big hit is going to be especially felt in new projects.

The difference between current events and the dot.com crash that happened back in 2001 is that that crash really only impacted the IT community. This time around, it’s really a global meltdown and it’s impacting the whole business.

IT is facing a significant challenge in that there is now a lot of easy-to-use IT technology that is available to consumers. Examples include the iPhone (of course!) and free on-line email accounts with virtually unlimited storage. What this means is that corporate users are now expecting to see similar products available to them while they are at work.

IT departments have some valid security and support issues for not diving headlong into offering such services internally. However, they do need to seriously consider how to offer their customers such services.

Whatnell stresses that we need to make sure that we don’t “…waste a good crisis.” What he means by this is that 2009 is going to be tough and it’s going to force every IT department to investigate nontraditional ways of delivering IT services.

Whatnell is somewhat famous for saying that he’d consider moving to a cheaper alternative, such as Google’s email system, if he could get 90% of the functionality for 10% of the cost. One of the reasons that he’s taken this stance is because he realizes that most users only scratch the surface of the functionality of the applications that they have available to them. Give the power users access to the fancy, expensive version of the apps and give everyone else the basic version.

Whatnell has some very specific thoughts when it comes to evaluating potential IT projects. He says that he evaluates projects based on what they do to support the company’s strategy, what the business case is, and finally, what the business risk is.

He points out that the more change that an IT project would cause to how business is conducted, the bigger the risk is. This does not mean that you don’t do the IT project, but that you need to be very careful and make sure that you give your full attention to all of the change management activities that would be required.

What do you think about what Peter has to say? Do you think that his view from inside an oil company is relevant to the rest of the IT industry? Which of his suggestions do you think is the most important? Leave me a comment and let me know what you are thinking.

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Posted in it strategy | 10 Comments »

Are CIOs Looking Down When They Should Be Looking Up?

Thursday, November 6th, 2008
CIOs Should Be Looking Up At Strategic Goals, Not Down At Tactile Ones

CIOs Should Be Looking Up At Strategic Goals, Not Down At Tactile Ones

Rob Preston over at Information Week was talking about some interesting CIO studies that were done recently and what they show is that it looks like CIOs are not spending their time where they should be. As the U.S. (and the rest of the world!) sufferers through a financial downturn, you’d think that everyone would be trying to show just how valuable they are to the company. Sadly, in the case of CIOs it doesn’t look like this is happening…

The surveys of CIOs showed that “IT / Business Alignment” is still a top priority for CIOs. Now what makes this interesting is that this has been on the top of CIOs to-do list for a very long time. Preston makes the point that he is hoping that internal alignment between IT shops and their business counterparts has already occurred. He is hoping that what CIOs are talking about is taking IT / business alignment to the next step and extending it down the supplier path and perhaps even reaching out to align with the customer. I hear his frustration; however, I don’t think that internal alignment has actually occurred yet, but more about that later on.

One of the pieces of good news that came from the survey of CIOs was that items such as “IT strategic planning” have moved up CIOs to-do list. The hope is that if IT departments are involved in these types of activities, then as things get tighter due to the economic downturn IT funding won’t be slashed as much as it has been in the past. When IT projects are seen as “nice to have” instead of “must have”, it’s far easier for a firm to take money away from an IT department.

The biggest concern that came out of the two CIO surveys that Preston talks about are how the CIOs identified how their departments were contributing to the overall success of their firms. You would be hoping to hear some solid business thinking here; however, that was not the case. Instead, traditional IT tasks such as maintaining existing systems, ensuring network operation, deploying large-scale systems, reducing costs by automating processes, etc. If you read though this list with a careful eye, you’ll notice that any one of these tasks could be done by an outsourcing firm just as well as a captive IT shop.

What does all of this mean? To put it simply, CIOs get that they need to do a better job of becoming part of the business. When they think long term, they are working to figure out how they can make their IT department help the business to succeed. However, the problem comes in the short term. Too many IT departments are focused on doing what they have always been doing – the comfortable stuff. The problem seems to be that nobody, CIOs included, really knows how to get from here (present time) to there (IT / business alignment nirvana). That’s sorta sad because the steps are pretty clear to me. They start out like this:

  1. Business Wins: IT needs to accept that it needs to become more like the rest of the business, not the other way around. IT is just one department, the rest of the business is much bigger and they make the money. Enough said.
  2. Subject Matter Experts Rule: IT staff need to spend some serious time learning everything that they can about the business that they are working in. No matter if you work with food, drugs, cars, or glass, everyone in IT needs to understand how that industry operates from top to bottom.
  3. Learn To Make Life Easier For The Business: IT exists to make life easier for the business – so show it! Specifically, IT should understand how the business runs so that it can identify and automate business processes that slow the business down.
  4. Speak The Language Of Business: Develop the ability to speak the language of the industry! This is how the rest of the company communicates and it’s high time that the IT department gets on board. Stop talking about version control, requirements gathering, maintenance upgrades, server consolidation because the rest of the company doesn’t have a clue what you are talking about. Instead talk about revenue, customer retention, driving sales growth, and bottom line results.

Hopefully the next time a bunch of CIOs are surveyed, they’ll have the right set of “looking up” priorities that are being used to manage their short term actions.

Does your IT department have a tactical or a strategic focus? Does your team have a good understanding of the industry that you are working in or is everyone just really good at “IT stuff”? What do you think that it would take to transform your IT shop into a business driver for your firm? Leave a comment and let me know what you are thinking.

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Posted in CIO | 6 Comments »

Time To Think About IT In A New Way

Friday, May 2nd, 2008

How To Align IT With The Business
In the past, the IT department was left alone and was only noticed if something stopped working (like email!) However, in the 21st Century IT has become a critical part of how business competes. The problem is that very few firms have figured out how to evolve from treating IT as a simple cost center to using it as a competitive advantage.

If you are looking for a quick and easy solution, sorry — it just doesn’t exist. However, there are some very specific, concrete things that innovative IT departments are doing that can dramatically change how a business thinks about IT. The key is to align what the IT department and its staff do with what the rest of the business does in order to create a more powerful firm. Sounds easy doesn’t it? Well it’s not. But now you’ve found this blog and we can spend some time talking about how to make what seems impossible to happen.

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Posted in alignment, business, IT, success | 3 Comments »

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