Wednesday, January 7, 2009

The Information Paradox

John Thorp's book, "The Information Paradox", is about the conflict between widely held belief that investment in IT is a good thing and the reality that this, all to often, cannot be demonstrated. My own experience as a CIO affirms the challenges and experiences described in the book. It gives valuable insight into what needs to change to realize value from IT investments and how to go about it. The book describes the Benefits Realization Approach in terms of three fundamentals and three necessary conditions aimed at changing the way people think and manage. It extends this approach with the concept of Enterprise Value Management to stress that the major effort and challenge that organisations must face is implementing not technology but change.

The three fundamentals of the Benefits Realization Approach are:

  • a shift from project management to program management to produce clearly identified business results;
  • a shift from free-for-all competition for resources to disciplined, strategic portfolio management; and
  • a shift from traditional methods of tracking project delivery to full cycle governance to turn concepts into realized benefits.
The three necessary conditions are:

  • activist accountability that includes the concept of ownership;
  • relevant measurements linked to contribution to outcomes and to lines of accountability;and
  • proactive management of change that is visibly led by senior management.
This book was a key source for many of the concepts used in the IT Governance Institute's Val IT framework.

I suggest these works support another paradox: the conflict between the widely held belief that IT alone is responsible for achieving value from IT investments and the reality that 80% or more of the change needed to achieve this value rests with those who hold this view.

Some hard hitting quotes below from the book demonstrate the challenges faced by CIOs:

"Management thinking has failed to understand the implications of the evolving role of IT in business and how critical IT decisions will affect elements of the overall business system beyond technology."

"The persistence of the industrial-age mind-set leads to what we call 'silver bullet thinking' about the capabilities of IT - and, more specifically, about the power of IT alone to deliver business results. Organisations rush to purchase IT 'silver bullets' in the form of customised business solutions, enterprise application packages and other ready-to-wear IT solutions in the naive belief that they come neatly packaged and stamped benefits inside.' ... the magic bullet theory does not tell us who should aim and fire the gun."

"An industrial-age management practice that encourages silver bullet thinking is the use of one-off business cases to support IT investment decisions."

"Another facet of silver bullet thinking is that most, if not all, of the delivery and implementation focus is on the IT project, with blind faith that any other required changes will fall into place."

"Decisions are generally made in the environment of a competitive free-for-all among stand-alone IT projects, each championed by an executive sponsor interested in pushing his or her pet project....the result is that too many IT decisions are made with no greater chance of success than the average gambler in a casino."

"Tough questioning is critical to get rid of silver bullet thinking and lose the industrial-age mind-set that is proving extremely costly to organisations."

"Senior business sponsors must take ownership of the program and accept clear accountability for delivering benefits."

"... in the case of enterprise application packages, our experience suggests that of the work involved in delivering benefits, 80 to 95 percent lies in the areas of organisation, processes and people - on the business side."

"CIOs will have to leave behind some familiar roles - like chief magician of information technology, and honourable head scapegoat!"

"Business sponsors must join CIOs in leaving behind some outdated roles...that of senior cheerleader, who waves magic pompoms internally as the IT team performs more miracles."

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