Painfully Aware

It is not as if CEOs are oblivious to their own IT policy and strategy weaknesses. According to the IT Governance Institute's 2004 IT Governance Global Status Report, although more than 91 percent of executives recognize that IT is vital to the success of their businesses, 76 percent also know that they have IT problems that could be resolved by implementing an IT governance framework. In addition, CEOs and CIOs alike named an inadequate view on how well IT is performing as their number one problem in their top 10 IT-related problems and priorities, and gave addressing operational failures as their highest priority.

The trouble is, recognizing the existence of a problem and identifying its root causes are two very different things. So, who is to blame when IT is not serving the company's needs and how does one decide accountability?

Terry Shipham, Bearing Point's managing director for Enterprise Solutions, who has spent approximately half his 25-year-long IT career in corporate IT and the other half in consulting, certainly thinks organizations, time and again, do get the IT they deserve. And they get those just deserts largely because of a stubborn refusal to learn from experience. "I think we see continued failures of implementation of systems, and you see the same reasons for those failures occur again and again," Shipham says. "You sometimes wonder why nothing changes to address that. It is very rare to see a proper engagement between the IT organization and the business in organizations."

One set of problems, Shipham says, comes about because the IT organization is either unable or unwilling to do sufficient planning or homework. Too often the IT group either fails to do requirements planning or fails to design systems properly, leaving people to operate by guesswork.

Take the example of utilities billing systems, where many organizations have failed to implement new billing or customer information systems despite their competitors' high levels of success in doing so. Typically, the problems arise because there has been a lack of requirements specifications, because people have taken on tasks they do not have the skills base for or because they have failed to fully examine the options. Sometimes a failure of the CIO to communicate the complexity of the work and a failure to engage the business in what will be a significant change program is also at fault.

But then again, if IT is guilty of not performing adequate due diligence, too often that is because the business will not let them.

"Everyone thinks that IT can't be too hard," Shipham says. "So I think there is a lack of patience, or even tolerance, from the business for the IT guys to do sufficient homework or sufficient planning. But on the other hand I don't think the IT people do a good enough job of communicating and taking these challenges to the business."

Blame, in other words, lies as often with the business as IT. Although it may not always be the individuals filling key positions, but rather the organizational structure that is most at fault. Kathryn Cason, president and co-founder of Requisite Organization International Institute, points out CIO work is as diverse as the number of people holding the title; the situation for the CIO who works in banking can be quite distinct from that of the CIO who works in retail or manufacturing.

"Let's put [the question of blame] in a more positive light: Who is accountable for the result of the work that the CIO does? That is clearly the CEO. So if the CIO is failing, then the CEO and board haven't done something that they should have done. And the success of the CIO is most often hampered by the lack of an intact functional managerial system," she says.

Cason was in Australia last December to attend the first conference in this country to examine the work of the seminal organizational scientist, the late Canadian Professor Elliott Jaques, who developed a comprehensive, unified theory of people and organization he named "Requisite Organization". Jaques's work has found wide application in organizations as diverse as the military, police, churches, schools, banking, mining and manufacturing. His research helped illuminate the nature of work, human capability and trust-inducing social systems as the groundwork for building strong, resilient, competitive, socially responsible employment systems. Implications extend from corporate governance to specific managerial leadership practices, equitable remuneration, role clarity and increased mutual trust. Integrated management is the key.

"There are problems in every organization that we go into around the world," Cason says. "And that is that there are large pockets of people in all of the functions who really don't have a manager that integrates their work with all the other people's in the company. Because of that, information systems technology simply can't get pushed through the organization.

"If you [have] a CEO who says: 'I have a CIO who is going to give us, the company, this system that we need to compete in the marketplace', but the CEO and the CIO do not have a complete unbroken line, managerial line, from that top to the bottom of the organization, there is no way that either one of them can integrate. And that is what the CIO is asked to do in architecture: to integrate information and also drive many processes. And unless there is an unbroken line flow in the organization for that to happen, they cannot integrate."

The fact that IT has primarily been pushed into a project management corner has proved disastrous, and the tendency to transfer that format to the rest of the corporation has created even more disasters, Carson says. Why is it disastrous? Because project management does not integrate the whole system, she says. The only way to integrate all the systems of the corporation is through the managerial model. "And if there is a break in any of that vertical or horizontal basic structure you create a friction that can seriously eat away at the effectiveness of everybody in the organization," she says.

Cason claims there are barely a handful of CEOs anywhere in the world today who can announce a change to their organization and know that within 24 hours every employee - even if there are 60,000 of them - will get the update. CIOs, often acutely aware this is so, risk being made scapegoats for circumstances entirely beyond their control. She advises the CIO to first get his or her own house in order, because their own organization will certainly reflect the disorganization in the rest of the company.

"If [the CIO] has a managerial system within his own organization that allows him then to go to other parts of the organization in a way that makes it possible for them to respond . . . it helps him actually get response from the rest of the organization," she says.