Having trouble getting IT executives and their business partners to speak the same language? IT portfolio management offers a ground-breaking methodology for building trust.
When researchers Mark Jeffery and Ingmar Leliveld started presenting the findings of their seminal IT portfolio management study to IT and business executives last year, they were surprised to find themselves hearing one word over and over again: trust.
Discussions of their research findings consistently started on the hard ground of metrics, ROI, practices and methods, but almost inevitably the tone of the discussion would turn emotional and the pleas were plaintive. IT executives, says DiamondCluster International principal Leliveld, are longing for the respect and trust of their business partners. Business executives really want to give them that trust, but are also yearning for some better understanding of IT, as IT becomes increasingly important within the enterprise.
The good news, Leliveld says, having discussed his research findings and case studies with more than 400 IT and business executives, is that both problems can be boiled down to a single symptom: a lack of shared language between IT and business executives. The even better news: leading practitioners have proved IT portfolio management (ITPM) has the cure.
"There is this lack of trust between IT and the business, and that is an area where IT is different from any other function I've worked in," Leliveld says. "I'm actually quite new to IT. My background is much more on the business and the finance side and in applying practices from those areas into the IT and business alignment area, which I find absolutely fascinating. But what is striking is this very deep sense of distrust between IT and business."
The lack of trust is compounded by a lack of IT savvy among business executives. Why is delivering projects on time and within budget only 60 per cent of the time acceptable in IT when it would not be in any other area of the business? Leliveld says that while saying so is to generalize - and why not generalize, he remarks, since IT and business both tend to think of each other in broad stereotypes - he believes part of the reason is that senior business executives tend to have neither "the guts" nor "the desire" to deal with IT.
"IT is this big hairy monster," he says. "It's like this great big 30-year-old furnace in the basement that they just don't want to touch. It's complicated partly because dealing with it would basically expose their own lack of knowledge."
Portfolio management offers CIOs a language that gives them a framework to "reach out their hands first, in those organizations where business executives are not extending their hands first", he says.
Indeed Leliveld's co-researcher Jeffery, assistant professor of technology at the Kellogg School in Illinois, says the ability of ITPM to improve communication with business executives was the most intriguing finding to come from their study, "IT Portfolio Management: Challenges and Best Practices", which was released last May by Northwestern University's Kellogg School of Management and management consulting firm DiamondCluster International. The study, done in collaboration with the Society for Information Management (SIM), surveyed 130 senior executives - 90 per cent of them CIOs or chief technology officers - from companies that as a group averaged $US230 million in annual IT spending.
While Leliveld was following up the research by presenting the findings to his 400 IT executives and conducting follow-up discussions, Jeffrey was conducting a series of more detailed interviews with executives who had been shown to have already done extremely well in ITPM, as well as some of those who had done very badly. He followed the interviews with a great deal of qualitative data analysis. The findings were unambiguous, and there were no surprises in the top three benefits these executives listed for portfolio management: improved business strategy alignment, centralized control and cost reduction.
"But the fourth one is what's intriguing," Jeffery says. "The fourth benefit out of a list of 10 was communication with business executives. And it kind of makes sense. If you show somebody a map [of your projects] plotted on a matrix of value to the business versus risk, business executives just get it. They just completely get it, because this is stuff that R&D has been doing for years; it's stuff that many marketing groups actually do when they think about their marketing portfolios. So it's this idea of using the tools of IT portfolio management to communicate the value of IT in business terms."
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