Why CIOs should cede the what of IT to business executives and focus instead on the how
Who people work with is more important than who they work for, a Gartner EXP publication asserted recently. This statement is right on. Every time there's an IT reorganization, too much emphasis is placed on structure and the unworkable extremes of centralization versus decentralization. Instead, CIOs should let IT's organizational structure mirror that of the enterprise and focus their time on defining the decision rights - that is, who has the final say about key IT decisions - necessary for collaboration between IT and the business.
When determining IT decision rights, it's wise to remember the adage: To gain control, you have to give it away. That same adage applies to raising children ("You have two choices," parents say), and it works when you're trying to cosy up to business partners while maintaining some semblance of IT order at the enterprise level.
Too often in the past, IT - like a desperate parent - has tried vainly to get its business counterparts to "grow up" without granting the necessary freedoms. In many organizations, business executives have little authority over IT funding, priorities, sequencing and resources, and feel forced to establish shadow IT organizations and partner with vendors who have gone around the IT organization. With one hand, CIOs attempt to limit business freedoms, while with the other, they try to finagle business counterparts into accepting accountability for value commitments.
Since business accountability is out of whack with its authority, IT executives are in a constant state of frustration as they try to extract the desired behaviours from the business. CIOs find themselves operating like surrogate users and assuming business partner roles (for instance, developing strategy, selling initiatives, writing business cases, managing business change and reporting value realization).
You will never achieve the partnership necessary for success unless you arrange decision rights to promote accountability from the business side. If you doubt the importance of this act, ask yourself why you never hear business leaders blaming the quality of their profits on finance or their people on human resources - yet their complaints about IT systems are commonplace. CIOs need to follow the lead of mature financial and HR organizations and delegate authority for the management of certain aspects of IT to the business, in line with competence and a commitment to follow the rules (that is, policies ensuring that the enterprise doesn't suffer at the hands of individual interests).
A simple but elegant way to responsibly delegate IT authority is to grant the business the authority over the "what" of IT while retaining authority over how IT is delivered (a concept shared with me by Jerry Gregoire when he was leading the Dell IT organization). This means that your business customers determine the IT-enabled business strategies and plans, set priorities and service requirements, allocate funding, approve vendors and people, and define risk postures. Meanwhile, IT retains the final say over architectures, technologies, infrastructure strategies, decision rights, IT initiatives, resource requirements, methods and tools, and the required qualifications for people and vendors. The idea is to transition from a custodial model of IT - that is, doing IT on behalf of the company - to a fiduciary model, in which you ensure that the company does IT right.
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