As with most departments, there are just as many causes for IT ineffectiveness as there are symptoms. And the IT group must be prepared to adjust to forces that are sometimes out of its control, whether it’s changes in the business model that put more pressure on IT, poor vendor selection or having a CIO who has trouble understanding the letters ROI.
“With every failure it is easy to spot a multitude of potential causes,” says John Baschab, senior VP of management services at Technisource, a tech staffing and services company with clients ranging from the mid-market to Fortune 500 companies.
The four main reasons for IT ineffectiveness, says Baschab, are business turmoil such as rapid revenue growth or a merger, which forces more demand on IT; poor selection and weak management of vendors; inexperienced and insular management style that alienates the IT team from the business; and poor financial and risk management (i.e. not understanding the link between IT costs and the benefits).
But there are cures for IT ineffectiveness, and Technisource’s Baschab has five tips for CIOs and the non-technical executive who manage CIOs (usually the CFO or CEO) on how to align IT and the business in such a way that helps the company grow and succeed.
Improve IT Management
Step one in improving IT management is to form an IT steering committee that can bridge the worlds of IT and the business. This committee would typically be made up of internal executives with an interest in IT’s success who also have influence within the company to promote change.
“Most often the committee is made up of the CEO and his or her direct reports,” says Baschab, “but can also include other influential leaders within the company.”
The steering committee should serve as a “virtual CIO” to provide advice to the CIO and quickly resolve issues between the business and IT. The committee should also be responsible for hiring the IT management staff, and making sure a real manager is in charge, not just a senior programmer, says Baschab.
“Cleaning up the IT org chart is the best place to start,” he adds. “There should be no floating boxes and clear lines of responsibility.”
Project management discipline
Here, CIOs need to establish a master list of upcoming projects, determine the ROI of each project, and then prioritise all projects by their business benefit, says Baschab.
IT leaders should determine how much capacity the IT department has and limit the number of open projects to what IT can handle. Expect the amount of projects to be smaller than you want, says Baschab, but “be rest assured that projects will actually get done on time and on budget for once.”
Manage vendors better
The recipe for keeping your vendors in line, says Baschab, is to insist on favorable contracts and aggressively manage your vendor relationships after the sale is done.
More specifically, you must continually “determine which vendors are producing well and which are sapping IT budgets with inflated fees and unproductive timelines,” says Baschab, who adds that IT managers and CIOs should not hesitate to drop bad vendors and migrate business to productive vendors.
When negotiating with a vendor, IT should demand the best pricing or threaten to open a new RFP (request for proposal). They should also ask vendors how they measure their client satisfaction internally.
“Require a report card from each vendor each quarter, and hold them to a set standard,” says Baschab.
Improve fiscal management and budgeting
Every IT leader needs to be able to explain to senior management any budget irregularities, and have a clear understanding of costs versus revenues.
“CIOs must recognise that most companies must generate $10 in revenue to cover every $1 spent on IT,” says Baschab.
It behooves a CIO to get a reputation for saving the company money by “making do” and by holding capital expenditure requests for must-have projects.
“CIOs must become a business resource for the senior management team by suggesting ways to lower the company’s overall cost through the use of IT,” says Baschab.
Mend fences between business users and IT
A CIO must do whatever possible to reduce finger-pointing across departments, says Baschab. Members of the IT department need to get along with business users (or try very hard) and collaborate with them regularly. If you don’t engage with business users, you should not get promoted, says Baschab.
“Effective business user relationships should be part of the appraisal and promotion process for all IT team members,” he says.
What’s a good way to bring the business side and IT together? Well, food of course.
“CIOs should have two lunches per week with business unit managers and members of the senior management and steering committee,” Baschab says.