Sharing the Load

Sharing the Load

Peter Weill, the director of MIT's Center for Information Systems Research, says there are six key IT decisions that CIOs and the business must collaborate on. Ignore them at your peril . . .

Asses Your IT Governance Performance

Asses Your IT Governance Performance

Dividing IT investments in this fashion helps stimulate discussion among senior executives, Weill says. "Each one of these four asset classes has a different risk/return profile. Balancing risk and return gives a really good basis and common language for a debate around spending on IT, because it borrows on something that's very well understood by senior executives -- financial portfolio management."

With that common language established, the next step is for organisations to reweigh their investment in each of these areas according to their goals.

"For the spending question there's no one answer, but the discussion to be having is: 'Do we know enough about what we want to do to be able to have confidence in spending?'"

DECISION 2: Which business processes should receive your dollars?

For an answer to this question, you may have to rethink the IT budget allocation process for your organisation.

"We phrase [the question] as which business processes -- not what departments, not what functions, not what country or part of Australia," Weill says. "If your organisation doesn't allocate IT dollars along business process lines, this question could prove impossible to answer."

An insurance company, for example, may consider order entry, billing/payment and claims as three distinct business processes. The insurance company can then determine which of these processes requires the most IT investment.

To use this paradigm well, your organisation should also have a clear vision of the future that can be succinctly summarised on one page, Weill says. "The companies that do best with this have a vision of how they want to be 10 years from now. That vision is a one-page picture. Each project -- IT or otherwise -- will deliver value in its own right but adds up to more than the individual projects alone."

According to Weill it is important that this vision is shared by all those involved in the decision-making process. "If you don't have an agreed upon vision," he says, "then the best salesperson in the room wins every time."

DECISION 3: Which IT capabilities should be firm-wide?

"One of the big issues that comes up in IT is what should be standardised and shared and what should be local or unique to the unit," Weill says.

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