No longer shut out of planning sessions, IT managers are at long last taking an active role in their organisations’ strategic development. But in the rush to create all-encompassing visions, are important distinctions between strategy and tactics being overlooked?
Once upon a time, there were non-IT managers who believed IT managers were technically-trained and experienced people who were interested in nothing but specific projects and the details required. “It’s what IT people do,” they would say.
Most CFOs felt IT managers knew little and cared less about the business issues of IT. They would not let IT managers near a strategy session. The attitude was clear: strategy was for business people who developed the plan, and then the techos advised on how to do it.
The good news is this has all changed. The words “business outcomes” ring frequently through the IT corridors and senior IT managers regularly take a role in strategic planning and development.
But some thinking on strategy is vastly more useful than others. John Roberts, vice president and chief of research for Gartner Asia Pacific, says: “‘Strategic’ is the most abused word in the IT industry.”
A strategy plan can be as high level as a single line of intention, Roberts says. Many times he has had IT managers approach him for help in developing a strategic plan. He asks them what they want to achieve, and the answer might be: “We want a new financials package and a new HR system.” He tells them to write that down. There is the plan.
But practitioners are finding that the plan should never be confused with the tactics used to achieve a desired outcome.
To underline the point Graeme Pattingale, information manager with Penrith City Council on Sydney’s western fringe, uses a World War II analogy. “To beat Japan, the allies would either go island hopping to approach the enemy gradually, or close off Japanese support at the base. That was the strategy. All the rest is tactics. That’s the hard part.”
In many cases, strategy and tactics get easily confused and tend to be used interchangeably, but there is a difference. Strategy is about creating the drawing; tactics is about colouring in the spaces. Strategy is about creating the plan; tactics is about implementing it.
“Strategy covers the fundamental things that will get us from where we are today to where we want to be in three years’ time,” Roberts says. It used to be five years, he adds, but the horizon has narrowed.
How Strategic Is the CIO?
For many years, strategy was left to those who sat at the big table, which often did not include an IT representative. But as organisational awareness of the intrinsic role IT has to play has grown, IT departments and IT managers in industry and government have increasingly played important roles in strategy development, and not just in IT strategy.
Things are now at the point where a good indication of the strategic status of IT is where the CIO reports, Roberts says.
At the federal Department of Immigration and Multicultural and Indigenous Affairs (DIMIA), the CIO, Cheryl Hannah, is one of eight divisional heads who sit on the management board of the department, chaired by the departmental secretary (effectively the CEO). She reports both to the CEO and to one of two deputy secretaries, who in turn chairs an IT governance subcommittee.
The CIO has always been on the management board, says Hannah’s deputy, Matt Kennedy, and the board has been in existence for more than four years. “It’s an indication of how seriously the department takes IT,” Kennedy says. “IT plays a significant role in the department.”
It is a similar position at the federal Attorney-General’s Department. Following a structural review, Peter LeRoy, general manager for information and knowledge services, is a member of the departmental executive. “The secretary of the department has contributed to the changing role of IT by elevating the ‘CIO’ to an executive position.”
Other CIOs have filled newly-created positions, as agencies realise the need for greater strategic input. For instance Pattingale’s position as information manager was part of a dual management restructure, covering information management in addition to traditional technology management.
David Lewis, group general manager of e-business at the NSW Department of Public Works and Services (DPWS), says this is part of a general acknowledgment that IT needs to have a broader view than the traditional technology areas. “The skills of CIOs vary from place to place and depend on the job required. It’s hard to have a long-term strategic view when you’re up to your armpits in problem solving. But that’s the difference between a CIO and a CTO.
“There is a clear acknowledgment that in order to meet business and government needs, technology is a means to an end, but not an end in its own right.”
And that is the crux of IT’s move into strategic areas: an acknowledgment that the technical expertise of the past is not enough, and not appropriate.
It is all about business outcomes, and if that means bringing in non-IT people such as DIMIA’s Kennedy, who has a non-IT business background, to provide that revised orientation, then so be it. Likewise DPWS’s Lewis was a business manager, and Penrith Council’s Pattingale was a librarian with an interest in IT delivery of information.
Tactical to Practical
Whatever the size or status of the IT department, the drivers in the strategy that government agencies must comply with remain consistent.
As distinct from their private sector counterparts, a primary driver for public sector agencies is government policy, often a directive to provide better services to the community for its own sake and not that of profit or branding. Community service obligations ring a resounding bell in public sector agencies.
For instance it was avoiding duplication and offering better and more timely service to the Northern Territory’s disparate medical client base that drove the Northern Territory Department of Health and Community Services to set up a centralised database to provide a “holistic continuum of care” that has since proved so useful in other areas (see “When Good Strategy Goes Right”, page 54).
It was a decision to offer all users Web-based access to council information, and a legal necessity to archive and retrieve all e-mails, that drove the creation of the position of information manager.
At the same time, however, and like their private brethren, government CIOs must show cost efficiencies and continuity of service.
The NSW DPWS established an e-procurement system to reduce the cost of services and stop “maverick buying”.
Cost strictures and shrinking resource bases are encouraging agencies to share information and facilities, creating economies of scale and, for smaller agencies and states, giving access to skills and facilities they might not previously have had.
And yet others seem to have more opportunistic drivers. The end of technology leases allowed the federal Attorney-General’s Department to set up a new network, as did the Australian National University (ANU), whose implementation had an unplanned immediate payoff (see “When Good Strategy Goes Right”, page 54). John McGee, ANU’s manager communications, information infrastructure services, says they were able to “move in a significant way due to lifecycle drivers”.
Whatever the case, CIOs and their financial masters are more conscious of TCO and RIO than ever before.
“In the past, a lot of money was flowing around,” says Craig Neil, managing director of network integrator NSC. “Some technology was nice to have, but it didn’t necessarily make the business any money.” He quotes unified messaging in this category; others quote CRM as a good idea in need of a business regimen.
“ROI and business cases are the prime movers now,” he adds. “There’s a lot of technology you can’t sell; there’s no cost benefit.” The key issues now are save money, make money, and improve efficiencies and customer service. “Today’s buyers are better and buying smarter.”
While IT departments play an increasing role in strategy development, they may also turn to third parties for assistance. Those who do typically have mixed feelings about the experience.
“The development of strategy planning is historically in cycles,” says Pattingale. “The rule of late has been to hand yourself over to a supplier, and say ‘Do it for me.’ But they’re expensive, and you ask yourself if you get value for money. We’re handing over our business to external suppliers, so you ask if our interests match theirs. The issue is one of control.”
The “disaster of the dotcoms and Web development” — over budget, over schedule and oversold — means that “a lot of fingers have been burnt”, he adds.
Nowadays the cycle has returned to in-house development, “because your organisation is going to be hung on it. If I were to follow a consultant’s advice in opposition to my own staff’s and the project goes wrong, I know whose job would be on the line”.
“I’d love to develop [the strategy plan] internally,” LeRoy says. “We have many people who could contribute, but we don’t have the resources overall. Therefore, we currently use consultants, but this is not my preferred position.”
LeRoy’s associate Graham Fry, manager of the Attorney-General’s Department’s information and communications technology branch, adds that speaking with suppliers is “a time consuming business. But we tend to try to develop strategic relationships . . . which help us draw on a similar range of expertise [to larger agencies].”
Kennedy is less begrudging. “We’re not averse to external reviews on where we’re heading. We’re heavy users of strategic industry advisers such as Gartner and Meta Group, and we’ll bring in others such as Ernst & Young. We take industry advice more widely on specific issues, such as benchmarking, but for strategic and business outcomes, we’re getting better [at developing it ourselves].”
For ANU’s McGee, it was a matter of the “meshing of our needs and outside advice”. Consultants “flagged the early issues” regarding the university’s communications network and developed a business case around the least-cost option to replace technology that was at the end of its life cycle. “They suggested that we didn’t just look at replacements; they said we should think about using new technologies.” Which they did, to ANU’s almost immediate advantage.
Perhaps not surprisingly, many vendors say they are increasingly being called in at early stages to help develop certainly the tactics and even the strategy.
NSC’s Neil, who was involved in the ANU project, admits that, “in years gone by, you’d never trust a sales guy [for advice]. You always asked a technician. But technicians don’t understand the business. Vendors have improved in their independent advice. All big contracts are outsourced through integrators, so the advice coming from vendors and integrators is increasingly reliable.”
Gavin Wright, program manager for JCC, which was involved in the Northern Territory’s medical data revamp, says: “You should work on the relationship with your vendor. You have to invest in the relationship to achieve the change you are looking for.”
The Strategist, the Tactician and the CIO
The dangers inherent in strategy are commonplace to all managers: cultural fit, short lead times, tight budgets, paralysis by analysis, even the strategy plan that is required by policy but is never used — are all mentioned as potential perils.
But the one issue that arises again and again specifically in IT is the need to ensure the CIO (at least) is driven by the business, for the business and not by anything else. “The critical success factor is integration with the business,” says Roberts. “You need to see statements up front [in the policy] about . . . the business requirement and the value proposition.”
The danger of investing in very close relationships with vendors is that you risk being dragged, however unconsciously, back into techno-driven decisions. “We had a period in the recent past where technology was coming to the fore, largely vendor driven,” Lewis says. “Very few at the top of management felt comfortable with it. Technologists convinced organisations to make investments that in hindsight were not correct.”
Even the vendors themselves say that policy should not be technology-driven.
Wright says that it is the technology that responds to the need, and not the reverse. “One of the fundamental errors that I’ve seen is the IT manager who says: ‘I know that I have to do this, so I’ll just use [the vendor’s] solution to change my business.’”
Which brings us back to the role of the CIO as strategist rather than tactician.
The truth is, a lot of IT people say they are doing strategy, but they are not. Strategists draw up plans, however brief, and tacticians implement them. If a strategist is creating the outline, then it is the tactician who colours it in. As important, as vital as those tactical decisions are, in IT’s case they are technology decisions. And as long as CIOs are primarily technologists, they will forever be tarred with the “techo” brush we remember from once upon a time.
Pattingale suggests that, at least in the local government scene, those with the wider (that is, business-oriented) view are the exception. “Only people who are trained in the last 10 years can make the jump to the broader-vision CIO. Older IT managers are still immersed in the technology, as they needed to be in the past, which makes it hard to have a view outside the technology.”
“The only way we can prove what we are about is to provide business outcomes,” says Kennedy. In Immigration’s case, IT competes for funds like any other unit, but for specific projects they liaise with the business area, ensuring a complete fit on aims and issues, and then it is the business area that makes the bid. “IT clearly has business support.”
Ultimately, it is probably as Roberts puts it: “There really shouldn’t be an IT strategy . . . just a business strategy.”
When Good Strategy Goes Right
Two government organisations that understand strategy is all about achieving a desired outcome
The Australian National University’s (ANU’s) upgrade of its telecommunications network and a move to IP telephony brought almost immediate but obviously unplanned benefits when the Canberra bushfires at the start of this year ripped through the Mt Stromlo area and wiped out the observatory and the telecommunications links of the academics working there.
Although their research facilities outside the observatory survived, the landlines were melted in the ground, leading to more than 100 academics turning up for work the next day with nowhere to go or, at least, no one to talk to.
They had lost all voice communications, although the data links were still up. So they were issued with IP handsets, plugged their computers into phone links and were up and running in a couple of hours — as opposed to weeks to re-establish normal phone connections.
The Northern Territory’s Department of Health and Community Services has also had unforeseen benefits. Because of a transient community, information on patient treatment and histories was poor, creating duplication of records and inconsistent information. The department made the decision to create a single database of all its “service event information”. This allowed medical staff to keep tabs on all treatments, regardless of where they occurred.
Stephen Moo, assistant secretary of strategic review and information services, says: “No other jurisdiction has the same coverage as NT. Because we’ve captured a comprehensive amount of data, we’re now looking at adding value for strategic and policy purposes to inform policy development and evaluate programs.” In other words, the new system can evaluate the effectiveness of medical programs through a series of quantitative and qualitative KPIs, so what was initially a tool for improved services has now become the judge on the effectiveness of those very services.
In addition, the department has developed a range of clinical support tools, including an e-mail alert system called Intray, which prompts medical staff regarding specific patient treatments. And the data collected also fulfils the Territory’s national reporting obligations.
“Virtually the entire client services delivery is encapsulated in the system,” Moo says. “The current applications were not envisaged in the original strategy. We didn’t realise the full benefits until we actually started to put the system into work.”
So policy and technology, strategy and tactical implementations, have worked together to develop and feed into each other, effectively leapfrogging each other to evolve the services and capabilities, and continue the development of strategy. In a market where disappointment in projects often prevails, sometimes the best laid plans bear unexpectedly sweet fruit.
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