Saturday, June 20, 2009

The Conundrum of IT Management

I found a very good paper entitled "The Conundrum of IT Management" by Professor Joe Peppard, the Chair in Information Systems at Cranfield School of Management and one of the expert reviewers of the Val IT Framework. His paper succinctly explains why CIOs find it difficult to generate business value from IT investments and why organizations must not seek to merely manage IT but manage the delivery of business value through IT - "a subtle but profoundly different objective."

The paper compares the portrayal of the IT function as an island, separated from the rest of the organisation, to an island off the coast of North America: California. In 1705, Father Eusebio Kino sparked a raging fire of criticism by publishing a map showing it as part of the North American mainland. King Ferdinand of Spain, in 1747 eventually stepped in and declared, "California is not an island." Even the King couldn't change some minds though; DeVaugandy's maps of 1770 show California sitting off the coast of North America.

Prof. Peppard asks, "Is the orthodoxy that hindered the recognition that California as an island a reflection of the same myopia that is affecting how organizations currently choose to manage IT?" Research clearly indicates that IT cannot be managed as an island but must be fully integrated with the mainland. "Are managers navigating from a map that clearly is erroneous, but for whatever reason they still chose to follow despite all the evidence that it is inaccurate?"
"IT specialists can build the technical infrastructure and systems, but can never deliver the changes in organization processes, work practices and business models that will ultimately see the creation of business value."

"The key challenge they face is marshalling resources and people that are not under their direct control yet are fundamental to the delivery of business value. One CIO summed up this quest as "fighting against the tide" – attempting to come ashore but being pushed back by more powerful forces."

"In posing the question, 'how can the management of IT be improved', the solution inevitably leads down a route that is inappropriate. The task is not to 'manage IT', but to understand the role that IT can play in the production of business value and to therefore manage the delivery of this value through IT. "

"Focusing improvement efforts within the IT function and is premised on a belief that "the problem" lies there. However, in posing the question as to how the value the organization derives through IT can be improved leads to an altogether different response."
Prof. Peppard points out that the genesis of this problem can be traced back to how organisations have been structured and managed into functional silos, though a process-oriented approach would better capture how the work is actually performed.

Research by Cranfield University's Information Systems Research Centre identified six information competencies that all organizations must possess if they are to have any chance of IT investments delivering value:
  1. Business Strategy: Creating and communicating strategy for the organization and defining the role of IT;
  2. Defining the Information Systems Contribution (IS Strategy): Translating business strategy into processes, information and system investments and change plans that match the business priorities;
  3. Defining the IT Capability (IT Strategy): Translating business strategy into long term information architectures, technology infrastructure and resourcing plans that enable the implementation of the strategy;
  4. Supplying IT: Creating and maintaining an appropriate and adaptable information, technology and application supply chain and resource capacity;
  5. Delivering Solutions: Deploying resources to develop, implement and operate IS/IT business solutions, which exploit the capabilities of the technology;
  6. Exploiting IS/IT Investments: Maximizing the realization of benefits through the effective use of information, applications and IT services.
"Seeking to improve the performance of the IT function is likely to achieve little. A central question must be, how do you begin to develop these six competencies?

"For far too long 'IT' has not only been portrayed as an island, but also managed as one; at many organizations it has been designed and positioned as such."
The paper's key points are:
  • Traditional organizational structures, authority patterns, processes and mindsets make IT difficult to manage and actually contribute to the IT-business divide
  • The knowledge resources needed to successfully deliver value are distributed throughout the organization, presenting a challenge for the CIO for its integration and coordination.
  • With the CIO having little or no jurisdiction over all required knowledge, its deployment will therefore be fragmented
  • The conundrum of IT management is how to generate value through IT without having access and authority over necessary resources.
  • To deliver value from their organization’s IT investment, more engagement is needed from executives and users from right across the organization. [I suggest, it would be helpful not to wait 42 years for an edict from the King to reinforce this.]
  • CIOs are attempting to influence people and decisions as well as encourage involvement and actions that do not fall into their realm of authority and are wrestling with aspects of the organization that can encourage behaviours contrary to creating value.
"IT is not an island, but a part of the mainland. Until this fact is acknowledged and recognized on the organizational map, organizations will continue to struggle to generate value through IT. Equally, the challenge is not to manage IT, but to generate value through IT." - Professor Peppard.

1 comment:

Denver said...

Baz, just to illustrate further your points about good governance, it sometimes pays to phrase the question of how the IT function can be improved, in these terms:

"How do we increase the rate at which we spend vast sums on the wrong projects?"

If that does not beg the question as to how we decide which are the right projects, then probably nothing will!