strategy

Getting IT Right!

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This is an article that was written for the February issue of the Queensland Business Review.  It is partly promoting an upcoming ‘Getting IT Right!’ seminar to be held at BDO Kendalls on 21 February 2007.  More information is available on the BDO website www.bdo.com.au.

Introduction

Stories of failing information technology (IT) projects, IT teams that just ‘don’t understand’, lost spreadsheets that contain critical business data, and critical applications that seem to crash for no apparent reason are all too common scenarios. Information technology promises a great deal to all businesses, but often fails to live up to expectations.

These problems cause frustration for all concerned. Unfortunately ‘getting IT right’ cannot be achieved with a simple wave of a magic wand. The current skills shortage shows no signs of abating, and it is important for a business to use its staff effectively. Good business support from information technology is one of the keys to unlocking this effectiveness. Four essential business tactics exist that can assist:

  1. Understand the business strategy
  2. Have the right people
  3. Use standard processes
  4. Use the right technology

These tactics will have a positive impact on the success of your business in the context of the support received from information technology.

Understand the business strategy

An understanding of the business strategy, and the involvement of business in IT decisions, is necessary to avoid an IT team working on the unnecessary projects.

This common problem usually stems from a lack of understanding of the goals and vision of the business when it is tempting to implement technologies that seem to be the correct decisions at the time. Sometimes these decisions are right; frequently, they are not.

A business’s main strategy can be focussed upon product innovation, customer relationships, or operating excellence. Identifying the predominant strategy removes trivial distractions for the IT team. There is little point to significant investment in a customer relationship system where the main focus of the business is upon delivering the best products at the best price. Conversely, for a business focussed upon customer relationships, the priority will be to deliver and operate a customer relationship system.

The business strategy must be clearly communicated to the IT team. A written statement of the business IT strategy is useful (vision, mission, and objectives, together with supporting initiatives and milestones. Even more useful is a cultural emphasis on the importance of the role of IT in achieving the
business vision. Such a cultural emphasis can be achieved through concrete actions (e.g. declining projects that do not support the business strategy) and regular adherence to and acknowledgement of the IT strategic plan.

Aligning information technology to the business strategy will reduce distractions that arise through not having a clear direction of the role and purpose of IT in supporting business goals.

Have the right people

A common problem facing IT teams is that the staffing ratio is all wrong. The wrong staff are doing the wrong jobs for the wrong reasons. For example, a business that employs four network administrators and only one help desk person will likely have a network that works very well at a technical level. Unfortunately, there will be many frustrated end users not receiving the desktop support they require. The result can be business chaos.

IT roles that do not directly support the business strategy should be considered for removal or outsourcing. IT teams regularly have ‘legacy’ roles from the past that are no longer needed or appropriate. A regular review of the roles in the IT area and their alignment to business strategy is a potentially valuable approach.

In addition, end users need the training and skills to use the technology that is provided. Frequently no training is received by IT teams, or end users in the software on their computers, and – especially in the case of upgrades – continue to use the software as it has always been used, without using new features. Adopting a formalised and documented approach to training can be beneficial, but even recognition of the need for training through ad hoc opportunities will bring benefits to the business.

Use standard processes

Often IT teams have only one person who can resolve a problem. Or worse, each team member will resolve the problem in their own way. When the staff member leaves, no-one else can fix the piece of equipment. The end result is chaos and delays for the valuable staff member.

If the same task must be done more than once, the potential for developing a standard process exists. No IT team should be without good help desk software, and ensuring a discipline around managing problems and documenting resolutions will pay dividends. There are free help desk management tools available (e.g. open source solutions) and new social networking tools (e.g. ‘wikis’) for documenting and storing processes and procedures that are inexpensive, simple to use, and easily maintained.

Reviewing the use of help desk management software, and writing procedures for standard tasks (starting with the most common tasks) will repay the business handsomely.

Have the right technology

Technology that is simply wrong for the task at hand, or obsolete, costs businesses a great deal. Excel spreadsheets will frequently be used for tasks that really require a database. Or many technologies will be used where a single technology product would suffice. It is crucial that the right technologies are used for the task at hand. This does not mean that the ‘latest and greatest’ gadgets and gizmos should be adopted, but for a business that is reliant upon IT, it is necessary to have all technology covered by parts replacement warranties.

Technologies that are still supported by the original developers or manufacturers are fundamental to ensuring that the IT team is effective. Limiting the number of technologies to support will also help. Approaches to ensure that the right technologies are used include a statement of the preferred technologies to be used (e.g. identifying a single preferred database technology such as Oracle compared to SQL Server), maintaining warranties on all important business technology equipment, and limiting the use of customised and in-house developed software.

Conclusion

Effective information technology requires that the IT team be provided with the skills and equipment necessary to deliver upon the business strategy. Likewise, the business needs to provide strategic direction and input into decision-making for business information technology.

There are many more tactics that can be adopted by businesses to ensure that IT can deliver upon its promises. This article has highlighted those tactics that are common to most businesses and will have the most positive results. Nevertheless, there are many other tactics that can be adopted that are unique to individual businesses, and must be considered in light of the specific circumstances of the business.

Some interesting facts about the value of information systems management

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I have been revamping the content on the BDO website that relates to the area of information systems consulting, and one of the interesting things this has required was the development/research of “did you know” facts for the services we provide. They’re too good to lose so, in case they don’t make it through the content review process, I am blogging the research for posterity:

Information Management Strategy

  • One industry study estimated the total cost to the US economy of data quality problems at over US$600 billion per annum (Eckerson, 2002).

  • According to Continental Research’s findings, 60% of employees spend on average 15 minutes per day searching for information; 15% spend around 30 minutes; and 7% an hour or more.

IT strategy, planning and architecture

  • Organisations that always use an IT strategic plan to guide IT investment reported that they receive 45% more business value from information technology than those that never use an IT strategic plan (Department of Communications, Information Technology and the Arts 2005)

  • That an IT strategy process must identify how information technology will support and enable the business to achieve its goals, and link to the business strategy in doing so.

IT governance, reporting and policy

  • In the United States poor IT Governance is a breach of Directors’ Duties and will result in a qualified audit report on the business, as it is the responsibility of the directors to ensure that an effective business reporting system exists

  • Companies subject to the ASX Principles of Corporate Governance should consider IT Governance issues in structuring the board and in recognising and managing risk from the business

Technology evaluation and procurement services

  • You should never select software on the basis of what it does and how it does it – rather, consider what you need to do and whether the software vendor will support you for the life of the software.

  • Selecting software on the basis of a product demonstration is not the recommended first step in selecting software.

Program and project management

  • The Standish Group shows that only 16% of software projects are completed on time and on budget. 31% of projects are cancelled before completion, and 53% of projects cost 189% of their original estimate (Standish Group)

  • That being ICT-aware, open to organisational transformation, and persistent in realising ICT benefits are the three leading factors in realising value from a business’ ICT investment

ICT business case & feasibility studies

  • Many businesses select new software based on “golf course” decision-making, and rely on fads, trends, and hearsay in selecting software, and then modify the business case to fit (CPA Australia IT Governance Guide 2005).

  • The business case should include the cost of decommissioning the technology and disposing of it at the end of its useful life.

Web services

  • For an inhouse software development project, maintenance costs of the software are about 55% of the cost to build the software in the first place

  • Sixty five percent of Australian organisations have admitted to losing revenue due to poor data quality, as a result of not having the time or resources to address this problem, according to the results of an international research study by QAS (2005)

Knowledge is power

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I suffer from an incurable disease, apparently, and have done so for over 10 years.  I recall I went to the doctor 10 years ago about it, who took a biopsy, expressed a great deal of curiosity (‘oh my goodness I’ve never seen that before’ – which didn’t help my state of mind) and then read the pathology report a few days later and said ‘don’t worry about it’.

It took me another 10 years to get worried about it again, went into the doctor’s (this condition has a habit of morphing about a bit) to clear these concerns, and the doctor managed to dig out the report from 10 years ago (an information management strategy that I’m impressed with, anyway!) and apparently this thing is called Schamberg Disease.

No, I hadn’t heard of it either, and neither had the doctor.

But, knowledge is of two kinds – you either know it or you know where to find it.  Being a doctor, I had assumed he had access to all sorts of information resources I don’t.

But he didn’t.

He googled it.

And now I know why it’s benign.  Unsightly, but benign – think knobbly knees with zinc cream on pasty-white consultant legs.  Just as well that I managed to get married early on.