IS should be a lean, mean "competitive advantage" machine.
Many CIOs I talk to lament the declining strategic view of IT in the business. In fact, one UK CIO likened himself to the corporate "fat controller". However, that view is undoubtedly harsh. US InfoWorld recently asked 100 business executives and 100 IS staff how much IT meant to the business. Seventy per cent of respondents said it was absolutely essential and a further 20 per cent thought it was very valuable.
The trouble for most CIOs is that for much of its history the business has seen IT as something of a silver bullet. Unfortunately, IT has a patchy track record of delivering. The Standish Group in the US revealed that 75 per cent of all software development in the Internet era has failed to some extent.
However, the Standish Group also indicated that business has a critical role in the success of IT investments. Key characteristics of successful IT projects are: user involvement, executive management support and a clear statement of requirements. In a 1996 report looking at the corporate decision process, IDC diagrammatically presented how this should work. According to the report, business problems had to be articulated by senior executives, potential solutions had to be drawn up in a partnership between senior executives and IS, and a project team of users, suppliers and IS had to have the responsibility for implementing these recommendations.
The challenge at present for IS is that the current economic climate is creating a culture of "fat controllers". When the Economist recently explored management's tactics for dealing with the global economic downturn, stopping and reducing things were the dominant approaches. Offering new products and services to create new markets and fresh opportunities were at the bottom of the list.
Clearly, CIOs need to be proactive in getting their executives to appreciate that IT can generate more value than just cost-savings. An article in Computer Economics outlined a useful roadmap. First, the IS group needed to ask some hard questions about just whom its clients are and what IS could do to generate value for them. It then needed to provide an infrastructure these clients could leverage effectively. This infrastructure needed to be modular so its functionality could evolve easily rather than requiring big bang upgrades. Finally, the article advised that IS needed to "play the game". That is, IS should outsource non-critical functionality, which would allow it to shift its focus to value-added initiatives while at the same time protect it from any criticism that it was immune to cost-cutting pressures.
Perhaps when IS demonstrates the results of such value creation it will encourage those business users around it to see IT in a different light. The business already knows that IT can assist with process efficiency. The challenge ahead is to convince them that it can also deliver competitive advantage.
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