I consult, write, and speak on running better technology businesses (tech firms and IT captives) and the things that make it possible: good governance behaviors (activist investing in IT), what matters most (results, not effort), how we organize (restructure from the technologically abstract to the business concrete), how we execute and manage (replacing industrial with professional), how we plan (debunking the myth of control), and how we pay the bills (capital-intensive financing and budgeting in an agile world). I am increasingly interested in robustness over optimization.

Wednesday, July 22, 2009

Restructuring IT: A Different Look at the Business-IT Relationship

The relationship between IT and its business partners is notoriously bad. Year after year, surveys by different research organizations report that improving that relationship is a top-10 priority for CIOs. But despite being a high priority for many years running, it hasn’t improved all that much.

Before we can make any headway improving that relationship, we must first understand how IT's pursuit of scale is responsible for a lot of the dysfunction.

Let’s take a look at what the business and what IT each want from the relationship.

First, what does the business want from IT? To put that question in perspective, we need to externalize a bit. Let’s think about what we want from the relationships we have with our key suppliers, such as the place where we go to get our coffee in the morning.

  • We want results from our suppliers. In our example, we want our coffee in whatever configuration we ordered (hot or iced, cow/soy/no milk, etc.) within a reasonable amount of time after we order it.
  • We want to work with professionals: we don’t want to see people scratching their heads wondering how to grind beans or froth milk. We also don’t want to hear somebody tell us that pouring drip coffee into an insulated cup “isn’t their job.”
  • We want a relationship. A couple of months ago, the WSJ ran a story that people are less likely to cut back spending at places where they have a relationship with the firm, even if their household income statement tells them they need to make severe cuts. This certainly rings true in our coffee shop example: we like it when people recognize us, and have our drink ready for us before we order.
  • We want innovation. If somebody offered us a cappo-moca-latte we’d probably give it a try. We want to know people are thinking about our needs and our experience as a customer.
  • We want to trust the people with whom we do business. Certainly, we want to know that we get a full cup of coffee, with ingredients that aren't spoiled.
  • We want value for money. We may very well pay $2.75 for a cup of coffee, but we have to feel that the coffee we're getting is worth that $2.75.

This doesn’t really describe how IT has approached its relationship with its business partners. Historically, it's had a different set of priorities.

  • IT has been in pursuit of “big” as opposed to results. To get “big,” we’ve created specialist roles so we can train and staff armies of people.
  • IT keeps business partners at arm’s-length: it’s been “you do the business, we’ll do the technology.”
  • IT prefers predictability over innovation. In technology, Java is the new Cobol. Also, IT project management is most often an excessively detailed project plan that tries to define every action that people will take far into the future.
  • IT doesn’t look to establish trust, as much as we want people to have faith that we'll overcome whatever problems we may encounter.
  • People in IT are generally more interested in solving interesting technology problems than they are providing value for money.

What we end up with is a pretty big relationship gap. IT is opaque. IT solutions are laden with technical debt. There aren’t enough cross-trained heroes to bridge the gaps that exist among all those specialists. Each partner in this relationship has an unhealthy dependency on the other: business can't function without IT, and IT reacts more than it leads critical business decisions. The bottom line? IT still has a success rate no better than 4 in 10.

So it really shouldn't be a surprise when we hear a CEO, CFO, COO or even a CIO ask, “why is it so difficult to get anything done in IT?”