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.

Best Practice in a Recession

View this workshop by Andy Murray, the Lead Author of PRINCE2:2009, at Project Challenge Spring 2009.

Andy explains why Best Practice in Portfolio, Programme, Project and Risk Management (P3RM) applies, whether in a recession or a boom, and how to embed it.

Boards and executives need to know:

• How each project contributes to strategic objectives
• The likelihood of achieving the expected benefits
• The remaining cost of each project
• The earliest and latest completion time for each project
• Exposure to risk
• Resource capacity to deliver the portfolio
• The impact on the achievement of strategic objectives if any single project was cancelled, deferred, slowed down or accelerated

Forging better ties with IT

I have just read Susan Cramm's excellent blog on Forging Better Ties With IT. She asks business leaders two very important and challenging questions. The first question is, "Are you a customer or partner of IT?"

Your answer will determine how effective your organisation can be in serving your customers.

The answer of course should be "partner." In the words of Susan, "IT only has one customer — and that is the customer who buys the company's products and services." Serving this customer requires an effective IT-business partnership to find win-win solutions that can be sustained and return optimal value over the long-term.

I suggest business leaders who answered "customer" are not:

1. Treating IT as an organisational asset and considering the needs of all stakeholders to find win-win solutions that enhance, rather than undermine, this asset
2. Involving IT early enough in planning and decision making so that business and IT plans and resources can be aligned (supporting point 1 by doing the right things the right way)
3. Wanting to commit their very busy staff and resources to ensure successful outcomes but prefer to commit very busy IT staff (all resources are over stretched due to point 2)
4. Accepting accountability for the outcome of this approach - it is easier to transfer the responsibility for the business case and risks to IT (also the blame when it doesn't work, which is common due to points 1-3)

For 50 years the IT function has actively sought ways to align with the business and cope with increasing complexity as technology has rapidly evolved and pervaded business processes - processes that, usually, the business cannot describe, do not understand and don't know how to improve. 
Meanwhile business leaders are engaging with IT how they were 50 years ago and expecting a different result.

"The onus for strengthening the IT-business partnership is on line leaders...IT has done pretty much everything they know how to do. Unless business leaders commit to forging a better partnership with IT, whatever IT is today, it will still be tomorrow." 

See Susan's blog, Can the IT-Business Marriage Be Saved? for more on this.

Susan closes with the even more important and challenging question for business leaders: "What are you doing to forge a productive partnership with IT?"

Alignment perspectives

In my conversations with business managers and IT managers, the subject of the divide between business and IT often comes up. Business managers often have no idea why IT is working on someone else's project and not theirs, or taking too long and still not meeting their expectations, and wonder why IT can't be outsourced. IT managers are asking why the business managers don't have to agree on what is important, don't take an organisational view and get rewarded for making departmental efficiencies at the expense of other departments in the value chain (usually IT), are not held accountable for realising the benefits stated in shoddy, forgotten business cases, and continue to blame IT.


Both sides despair about the wasted opportunities and point the finger but nothing changes. These are symptoms of weak or flawed organisational governance, which is necessary to effect binding improvements in aligning both the business and IT toward the creation of real value and the achievement of the organisation's goals.


Governance drives alignment, which in turn drives the creation of value. 


Commitment and a structured approach to governance at the highest levels is required to continually drive the alignment of business and IT across various dimensions:

• Strategy and goals
• Processes and operations
• Portfolios of plans
• Resources and budgets
• Organisational structures, behaviours, and rewards
• Performance measurement
• Risk management
• Benefits realisation
• Decision making and lines of accountability.

A useful frame of reference for starting discussion with business and IT managers and creating awareness of alignment opportunities and challenges, and the need for sound governance to ensure continual alignment of these dimensions, is Venkatraman's Strategic Alignment model.


Venkatraman's model recognises that value from IT investments cannot be achieved if the strategies of the business and IT do not align and if there is no dynamic process to ensure continual alignment.


The model illustrates four alignment perspectives:

1. Strategy Execution - How will business strategy drive organisational design and change, and how will IT infrastructure and processes need to support that?
2. Technology Potential - How will business strategy drive IT strategy, to that the required IT infrastructure and processes can be determined?
3. Competitive Potential - How will IT trends and capabilities influence or transform the business model and operations?
4. Service Level - How to build IT capability to support fast changing demands of end-users?

The model is useful when aligning strategies by opening minds to the various alignment perspectives and considerations. It becomes even more useful when managers use it to drill down to understand what that means and what changes will be needed in the various dimensions for business and IT.