Are You Doing IT Right?

Who ultimately makes the decisions about IT projects at your organization? Who holds IT accountable for the projects it takes on? Is it the director, a Vice President, the CIO, or the President? This question is becoming more and more important as two things are happening. First, the economy is slowing and IT budgets are shrinking. Technology companies like Cisco are predicting a huge downturn in IT spending in the upcoming year as a result of the current economic situation. This is causing management to pay closer attention to all spending, IT or otherwise.   Second, and more importantly, senior management is starting to recognize the value of IT and see the need to treat it as a strategic asset rather than a simple utility or necessary evil.

It’s this second point that you should be most interested in. Today, technologies move far beyond utility to where they provide tangible business value and prove to be strategic in how they support business processes. This link between IT and business process is where the value is created. For most companies, competitive advantage comes from excellence in process rather than product. Being the most efficient at building a widget or providing the best customer service, are examples of this. Very few companies can compete on product alone for an extended period of time.

With this in mind, senior management should be paying particular attention to investments made in technology. How most successful organizations accomplish this is through effective IT governance. In simple terms, IT governance is the process by which organizations determine who makes the decisions and who is accountable for IT projects. By establishing governance over IT, an organization’s board or senior management can identify those parties who are close to business process and strategy and allow them to contribute to the IT decision making process. This group also holds the entire organization accountable for delivering and realizing the value created by the effective use of IT.

All organizations have IT governance in one form or another. Many organizations rely too much on IT to make decisions about projects. Similarly, they hold IT accountable when IT projects fail to hit their intended target because the technology doesn’t properly support process. What makes IT governance effective is when mechanisms are put in place (budgeting processes, committees, decision-making, communications, etc) that align with the organization’s strategy so that IT and the business are moving lock-step in the same direction.

So the take-away here is to look at your organization and determine if you think the right people are involved in the IT decision making process. Are the right people being held accountable for the success of IT?   Is the role of IT in executing business strategy clear? How do you measure, manage and value IT? If the business side is involved in all of these then you may be doing IT right. If not, let’s talk on how to raise the issue within your organization and get IT and business together on the same page.