How is it that pure IT projects seem destined to fail, and yet technology is clearly key to business? Mark Samuels canvasses a group CIOs for their views on what barriers there are to IT project success.
“IT projects never really work,” says Mike Day, CIO at fashion designer Tommy Hilfiger. That seems like negative talk from a technology chief but there is sound method in the apparent madness.
More technology chiefs are waking up to the need for IT projects to be sponsored by the business. In cost-constrained times, CIOs are trying to avoid driving into a technology cul-de-sac. So rather than simply implementing IT projects, many CIOs are aiming to understand what executives need from the outset and meet agreed outcomes.
“The best ideas are sponsored by the business,” says Day. “Technology is now so pervasive through the organisation; it’s end-to-end. The CIO has to communicate to the business what is possible and why.”
Such communication has to rely on agreed business objectives. IT and other line-of-business executives need to collaborate and work back towards technology implementation from an end goal that is well defined.
Take Day, who was searching with his executives for a means to help a dispersed workforce of global designers collaborate in real-time. The answer was videoconferencing, with the firm having recently signed a five-year managed services contract with BT to provide high-specification Tandberg technology.
The system meets the stipulated business demand, using virtual fitting rooms to allow employees from various business units around the globe to work together without the need for travel. “You have to understand the problem that the business is trying to solve,” says Day, who reports to the designer clothes brand’s chief operating officer.
“Success is about trying to identify what people want through a particular initiative. I’m able to talk in a language the business understands. CIOs have to rely on a strong network for outside peer review.”
Effectiveness, concludes Day, comes from understanding the aims of the business. Implementations that are driven solely by a desire to introduce new technology will falter. Myron Hrycyk, CIO at utility company Severn Trent, takes a similar stand.
Hrycyk says CIOs who want to build a good relationship with their executive team will need to look at their organisation as a whole. More specifically, they will need to think about where IT is positioned and how it is governed. In short, says Hrycyk, IT leaders will need to check the organisational appetite for IT.
“If your chief executive doesn’t see IT as crucial, you’ll effectively be trying to push water uphill,” he says. Hrycyk recognises he is lucky, suggesting his CEO Tony Wray is a boss who understands the importance of technology for the business.
“He challenges my role quite considerably,” suggesting it is much healthier to work for a CEO who enjoys IT. Hrycyk also has a strong relationship with his finance director, Mike McKeon. He suggests his CIO peers should work on two key areas: credibility and acumen.
Develop credibility for delivering basic operations, says Hrycyk – show you can sit around the boardroom table and contribute. Also demonstrate you can…
…be trusted in terms of commercial acumen: “Many CIOs do not develop a business-focused view on work,” he says.
In terms of his own approach, Hrycyk says he goes out of his way to understand “numbers and budgets”. Look credible, and operate with a degree of commercial acumen, and you can start building the right type of vocabulary – and exchange – with executive peers: “The success of a CIO depends on the relationships with colleagues around the board table. You must look at IT through a business lens,” he says.
The focus on figures is unlikely to diminish, with growth in IT budgets expected to stay flat during 2010. Gartner expects a global increase in technology spending this year of just 1.3 per cent compared with 2009 levels.
Such constrained budgets leave the analyst to suggest that every CIO needs to understand the requirements of the business, using IT to raise productivity and create new capabilities. It is a theme that chimes with soon-to-be released research from IT networking organisation CIO Connect, which shows there is a considerable disconnect between CIO and FD perceptions of technology.
About three-quarters of CIOs make IT spending decisions but nearly all these IT leaders are influenced by the thoughts of their FD. More worryingly, a fifth of FDs – most of whom have a significant influence over IT spending – have a negative view of technology and regard IT as a necessary evil or a drain on finances.
Exerting the right kind of influence over technology-spending decisions means CIOs must recognise that buy-in for business projects from executive peers is essential.
After nine years as a technology chief, Orange Business Services CIO Vincent Kelly has clear views on where he believes some of his CIO peers might be missing a trick: “When things go wrong, it’s often governance and a lack of buy-in that can be traced as the root cause.” Technology-driven projects, he adds, will not work without stakeholder contribution.
“Success here is about ‘we’ – it’s about whether something is usable at the executive level. IT doesn’t decide what IT will do; we respond to the business and ensure the right governance is in place,” he says.
Establishing the right boundaries will help you show how technology can drive change. And there is hope. Kelly says he and his colleagues at Orange Business Services have worked hard to show how a collaborative approach can reap rich dividends.
“The perception of IT has changed a lot,” says Kelly. “IT governance for us works alongside the products of particular business units. We work alongside operations to ensure all the right people have a particular stake in a project. IT is all about teamwork; it’s about people and it’s expert-based.”
The message, then, is simple: IT is not an island. If you want to be a successful CIO, you will need to focus on outcomes and work with peers to implement cost-effective business projects that meet clearly defined demands.