One of the arguments that we have always faced when discussing the dismal track record of IT and promoting the need for different governance models around enterprise use of IT to create/sustain value is that the same thing happened with the emergence of railroads and electricity and that, essentially, “this too will pass”. I have always had a problem with this for a number of reasons including i) the pervasiveness of IT, iii) the pace of the change, and iii) the fact that it is unclear if/when we will ever reach a “stable state”. This youtube video certainly reinforces that view and provides much food for thought – not the least being that we need to be moving beyond “tweaking” traditional governance models to thinking about radically different models.
It is a holiday – Canada Day – here today so this post will be brief. I couldn’t resist looking at this article by Robert X. Cringely in Infoworld while looking for some personal email. After only a cursory review, the IT Dashboard discussed here appears to be a huge leap forward in terms of investment transparency, in this case by the U.S. Government. Over the next few days, I will be looking into this more, and will certainly be posting additional comments.
I recently worked with ISACA to create a short survey around “Value of IT Investments”. The responses from more than 500 IT professionals in the US raise some interesting questions. While 67% of respondents felt that they were realizing between 50 – 100% of expected value from their IT investments, only 34% felt there was a shared understanding of what value was in their enterprise, and only 29% had a comprehensive approach to measuring that value. This raises the question, “On what basis are spending decisions made?”.
These findings support the results of a number of other studies, anecdotal evidence and my own experience that most decisions related to value from IT are subjective, and all too often based on perception and emotion rather than facts. The survey also confirms that responsibility for ensuring the realization of value from IT-enabled investments continues to be abdicated to the IT function with 57% responding that this is the case. Remarkably, 11% responded that no-one was responsible!
In response to another question about responding to the current economic crisis:
· 16% of enterprises are making across-the-board cuts in IT spending;
· 14% are freezing at current levels;
· 44% are reducing spending selectively; and
· 26% are increasing selectively.
These results are encouraging in that they show that enterprises are moving away from the traditional across-the-board cuts, but again raise the question of how spending decisions – decisions to freeze, spend more or spend less – are made.
We are still consolidating these results with those from other countries, which, while largely consistent, show some interesting differences. I will post and discuss these when they are made public.
The results so far, however, show that we still have a long way to go – organizations will continue to come nowhere near to realizing the full value of their increasingly significant and complex IT-related investments until they implement effective governance of IT, as an integral part of overall enterprise governance, adopt proven value management practices – such as those in the Val IT™ Framework 2.0 from ISACA, and assign accountability for the realization of value for those investments to the business, rather than abdicating it to the IT function.
I am becoming increasingly interested in how social networking, rather than being viewed as a potential problem to be managed within the “traditional” view of governance and management – today still largely based on beliefs and structures that are a hundred years old – has enormous potential to revolutionize governance and management. In doing so, we could truly tap in to the experience of all employees (and other stakeholders) – not be limited to the knowledge/experience of a few anointed leaders or experts – and actually make the much-abused term empowerment mean something by giving people the opportunity to contribute to/participate in decision-making, actually be listened to and, as a result, really make a difference.
A colleague in Australia sent me this document by Asad Quraishi of Knowledgework (a Canadian organization as it turns out). While the ideas are not new, nor necessarily complete (what document is/can be?) – one serious omission being no reference to The Information Paradox (just, not quite, joking) – it is concise and well organized and, as such, a useful addition to the field of portfolio management (not just planning).
As followers of this blog will know, I have long held the UK NHS’s massive National program for Information Technology in Health (NPfIT) to be a case study in what to do wrong in implementing IT-enabled change programmes.
While this article, by Christine Davis in The Cutter Edge, deals with constraints to risk management, it applies equally well to value management. With my total focus on value, I view risk as one of the factors – a major one – that can significantly impact the creation and sustainment of value and all too often, erode or destroy it.
Those of you who follow this blog will notice that is been over 3 months since my last post – after many years of heavy workload and extensive travel, and with my 65th birthday coming up fast, Diane and I decided to take an extended European vacation, which ended up being “book-ended” by speaking engagements in Manila and Seoul, the last of which I have just returned from. I had hoped to post occasional blogs while away but my ISP migrated to a new platform the day after I left resulting in the Blogger publisher’s IP addresses being blocked – don’t you just love technology!
The UK’s litany of failed public-sector IT projects continues, as described in this Information Age article by Peter Swabey, with the latest being the Department of Justice’s National Offender Management Information System (C-Nomis). Originally estimated to cost £234 million through 2020, C-Nomis has currently spent £115, is now two years late, and projected to cost £513 million through 2011. A recent Information Age interview with the CIO of the Department of Justice, Andrew Gay, provided some valuable insight into the cause of these failures. Gay said that:
“It doesn’t matter what type of project it is, whether IT or anything else. It’s a question of not nailing down the functionality you actually need, and that has been one of the principal faults with government IT spend. If you are going to deliver an IT project vaguely near budget, it would be far better to spend a huge amount of time working out exactly what you were trying to do with that programme rather than drift into it.”
There is a subtle distinction in Andrew Gay’s comments between an IT project – that delivers a technology capability or service – and a business-change programme – that includes all the initiatives, including but certainly not limited to the IT project, required to realize the expected outcomes. A recent report by the NAO reinforces this saying that “C-Nomis was treated as an IT project and not as a business-change programme” and identifies another all too common problem in that “bad news about the project failed to go up the ladder of command to those who could have made decisions to rescue it.”
This NAO report contains valuable guidance, not just for the public sector, but for all enterprises in managing IT-enabled business change programmes.
This is an Ivey Business Journal article by Hersh Shefrin that provides a very interesting perspective on the current financial crisis. While this is interesting in itself, there are many parallels here with other failures of governance, including IT governance – in fact, particularly on the first page, if you drop the word “financial”, what Hersh is presenting is that governance failures all too often result from our failure to understand the need to both recognize and change human behaviour. A few (slightly restructured and “de-financialed”) quotes:
- planning with a view to execution and the achievement of goals;
- putting in place a balanced mix of financial and non-financial incentives which reward members of the organization according to how well goals are met;
- excelling in the sharing of information about whether the organization is track in carrying out its plans, achieving its goals, and rewarding its members.