CXO

Begin clients' IT assessment with a senior management review

IT consultants hired to make strategic decisions for their clients are sometimes asked to assess their client's technology. Where should you start? What questions should you ask? Learn where to begin your assessment and how to mold your approach.


While IT assessments are common tasks for consultants who perform strategic analysis for their clients, knowing how to approach such an important process is not always easy. And contrary to what most people would think, the IT department is actually the last place you want to go searching for information. But before you start analyzing your client’s company, you need to understand the true purpose behind an IT assessment and how to make sure you've asked the right questions to get the critical information you need.

First in a series
This is the first installment in a five-part series designed to guide consultants through IT assessments of their clients. This first part can help you determine what an assessment can accomplish. Future articles will focus on assessing company departments, your client’s clients, and its IT department.

Why an IT assessment?
You might be called in to conduct an IT assessment for many reasons, including:
  • Senior management has changed and they want an independent perspective on IT.
  • Senior management believes there are problems in the IT department.
  • Management believes the technology organization spends too much money.
  • Company acquisitions have occurred, and management believes changes in their IT department or budget could bring the company some leverage.
  • The company just lost its CIO, and management wants an independent review of IT prior to hiring another CIO.

But before you begin your assessment, you should be certain of just who the customer is and what the objectives are for conducting an IT assessment. The client (probably the CFO or CEO) is going to pay the bill, so you better hit their mark.

Second, be cognizant of the fact that a full IT assessment is not just about the company’s technology. Performed properly, it is actually an overall business assessment that determines the extent to which the IT organization is supporting the objectives of the company.

One way to approach an IT assessment is to treat it like a technology due-diligence process during a company acquisition. While your IT assessment project may not go into the level of detail and scrutiny that a proper due-diligence effort calls for, the process still requires you to fully understand your client’s technological capabilities.

Understand deliverables
Keep these assessment deliverables in mind as you begin your discovery process:
  • Business objectives and plans that are dependent on technology
  • Business issues
  • Client and company department issues
  • Current IT priorities, capabilities, processes, and stability
  • IT and business risks and opportunities
  • Recommended IT initiatives and their priorities to the company

Begin your discovery process with senior management, preferably at the level that hired you for the project. Starting at the highest level possible will help you understand the company’s mission, objectives, and plans for IT right off the bat. Use this insight as your compass as you work through your discovery.

Usually, the best insight comes from the CEO, CFO, or COO of the company. Remember that senior management may not always really know what’s actually taking place in IT. Your purpose at this stage, however, is simply to gain management’s insight and impressions. Later on, you will be able to validate (or invalidate) what the senior managers said about IT. Either way, much of your time and effort during this phase of discovery will be synching up the opinions, insight—and often, the misconceptions—of management, IT, and the end users of the company's technology.

During an assessment that I conducted for a company several years ago, I ran into just such a perception gap. Senior management thought the IT group was overspending and was not delivering what the company needed. IT's view, however, was that there wasn’t enough money, which prevented its department from doing what was asked of it.

The reality I found after performing the assessment was that there was plenty of money being spent in IT. Two major projects were costing hundreds of thousands of dollars but were not bringing real value to the company, especially when there were basic infrastructure and IT services issues that needed improvement. IT was working hard, but the company wasn’t in a position to spend money on efforts that did not help it either reduce expenses or improve cash flow at the time.

What do you ask senior management?
As you prepare to interview the senior managers, know that the answers to one question may lead to two or three more questions you'll need to ask. That’s the nature of due diligence.

Figure A


Figure A  above shows a questionnaire guide that I’ve used in many due-diligence/assessment efforts. You will use the answers you get to these questions and other information from company departments and clients to determine whether the IT organization is in sync with its users' needs. Use the questions in this guide to get you started; let your instincts and observations lead you to the questions you'll need to add to get enough information to complete your project. Keep in mind that part of your work is to discover what is "real" and what is "not real." You are going to hear both.

Go through this questionnaire with every senior manager you interview. You may get conflicting feedback on occasion, but that’s okay. Right now, there are no wrong answers. You simply want to learn what senior management’s perspective is and to what degree they depend on technology for current and future plans.

Keep the conversation relevant to technology products and services as much as you can. Although my overall experience has been that most senior managers don’t know what the specific problems are in IT, strong CEOs and CFOs do have an innate sense for detecting trouble. Remember, however, that the focus here is not to get marred down in the details or to solve the problem. You're simply recording information.

Answer these questions to complete your assessment
Regardless of the problem, thorough questioning and observation will tell the seasoned consultant what the real issues are, and your ability to remain objective throughout discovery is key. During your interviews and as you administer your questionnaires, focus on these questions as you move through the ranks of senior management:
  • Is senior management happy with IT?
  • If not, why? Be as specific as possible.
  • Does senior management believe IT is focused on the right priorities?
  • Does senior management have a company vision, and is it communicated?
  • Is there a plan to support the vision?
  • What stage of maturity is the company in (i.e., start-up, turnaround, high growth, etc.)?
  • Is there strong communication between senior management and the head of IT?
  • Who does the CIO (or equivalent) report to?
  • What are the key needs of technology to support the business?
  • How long has the senior management team been in place?

As a former CIO of many years, you would think that my prejudice would be slanted toward the IT department. It’s not, actually. More times than not, my assessment bears out that IT has the money it needs to do the job but often spends it in the wrong places. An IT assessment can help you pinpoint what the real issues are in these situations and can help you nail down basic needs and requirements for your client as the client works toward larger strategic projects.

How do you perform IT assessments for your clients?
Are there forms and documentation that you use to get a clear picture of your clients’ IT capabilities? Tell us about them, and we’ll feature them in upcoming articles. You can also post your comments in a discussion below.

 

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