IT MATTERS: Or more correctly, use of IT matters…
What matters about Information Technology (IT)? How does IT add value to a firm? Who should take responsibility for IT management? These are a sampling of the questions to be answered in this and upcoming issues that will explore why and how IT matters to business and management.
The closing years of the last century saw heavy investments in IT that were motivated by “Y2K,” “dot com” and “ERP” (Enterprise Resource Planning) mania. During these opening years of the current century, many business executives have become increasingly concerned about the levels of IT spending in their firms, questioning the business impact they have received from prior investments in IT and viewing proposals for expensive new IT initiatives with great trepidation. From their perspectives, such concerns have been legitimized by the now largely dismissed “IT Doesn’t Matter” debate and its claim that IT has become a commodity that no longer conveys strategic advantage.
However, the real problem is not that IT has become a commodity, or even that IT is ubiquitous. The real problem is the extent to which most firms continue to struggle (and often fail) in their attempts to extract positive business impact from their IT systems. The root cause is management’s failure to get these systems used in ways that actually create value for the firm. Such value can only emerge when IT systems are used in ways that are consistent with the business objectives that motivated and justified the IT system investment in the first place.
What accounts for this failure? For the most part, I consider the poor track record of IT business impact to be an outcome of two related problems with how IT has been managed. First, the dominant focus in IT has been on the activities associated with the development and acquisition of IT systems, at the great expense of attention paid to the activities necessary to get IT systems used appropriately. This focus has resulted in a dominant philosophy of IT management that has often been referred to as “If we build it, they will come.” Very often, IT systems were built, but nobody came to use them. And when nobody uses an IT system, there is no possible way that business impacts can ever occur.
Second, the traditional norm has been for business executives to abdicate complete responsibility for the management of IT and to delegate that task to IT professionals. Many reasons account for this norm, including a lack of understanding and comfort with IT on the parts of business executives, a perception that IT projects are tangential to executives’ primary responsibilities, and an enthusiasm among IT professionals for demonstrating their own importance to business.
Certainly, IT professionals have an important role to play in the management and operation of IT resources and in the execution of IT projects. However, they should not assume primary responsibility for every stage of the process through which firms acquire and deploy new IT systems. In particular, IT professionals should not, and cannot, be responsible for the business impact of IT systems. Why? Because IT professionals do not have the management authority to bring about the process and behavior changes necessary to achieve actual use of these new IT systems and consequently to realize the desired business impact of IT.
Two Shifts in Thought Regarding IT
Both of the aforementioned problems can be addressed by two simple shifts in the prevailing thinking regarding how the acquisition and deployment of IT should be managed. Both shifts are motivated by a fundamental tenet of management thinking: Start with the goal.
First, the dominant focus of IT management attention needs to shift from acquiring/building IT systems to ensuring that IT systems are used. Since the ultimate goal of most IT projects is real business impact (the exceptions are IT infrastructure renewal projects), and since business impact can only emerge if IT systems are used, then the dominant focus of management attention during IT projects must be on getting IT systems used in ways that are consistent with the business objectives of the project. This simple shift results in some powerful insights. For example, when the dominant focus is on getting an IT system used, it becomes apparent that less complex, easier-to-use, and possibly cheaper technologies may offer far greater potential for business impact than do the all-bells, all-whistles, best-of-breed “TLA systems”** du jour.
This simple shift in IT management philosophy is consistent with the long understood importance of “user involvement” in IT projects. However, the traditional IT project philosophy argues for “user involvement in IT development projects.” Let’s turn that notion on its head. The ultimate importance of IT use over IT development suggests that the underlying IT project philosophy should be switched to “developer involvement in IT use projects,” i.e. projects that aim to bring about use of IT that is consistent with desired business outcomes. As an aside, the “End-User Development” movement had similar motivations, but resulted in a plethora of “locally optimized” applications of dubious quality at the expense of firm-wide business impact.
Second, and most important, if indeed the ultimate goal of an IT project is also to achieve a business objective, then the ultimate management responsibility for that project should rest with those responsible for achieving business objectives: business executives. In my teaching and consulting engagements, I advocate that there should be no “IT projects with business objectives,” only “business projects that are IT enabled.” Business projects should be the responsibility of the appropriate business executives.
To bring these points together, I suggest that only business executives have authority over the users whose ultimate adoption and use of an IT system is fundamental to achieving the business objective being pursued. This assertion adds further credence to the notion that business executives should have primary responsibility and stewardship for “IT-enabled business projects.”
The Role of IT Professionals
Is there a role for IT professionals? Absolutely! They have a variety of critical roles, ranging from business-technology visioning, vendor management, IT architecture, and infrastructure management to project management. But my key point is that ultimate management responsibility and accountability for the business outcomes of an IT-enabled business project must rest with a business executive. What’s more, the extent to which IT permeates virtually every business and organization process today makes it nearly impossible to separately manage the IT-enablement from the process itself.
Equipping Executives to Manage IT
Having argued the case that business executives must take primary responsibility for IT-enabled business projects, I must point out that the unfortunate reality is that most business executives are not well equipped to do so. The tradition within business and management education and within corporate executive development programs has been to prepare business executives for business roles and to hand off IT projects to their IT professionals. Core MBA classes have typically educated future business professionals to be participants (or informed observers) in IT projects, but not to assume management responsibility for IT-enabled business projects. It is important that executive education programs instead prepare business executives to assume the responsibility of leading their firm’s IT-enabled business projects in competitive environments in which the effective management of IT does matter.
**”TLA” refers to “Three-Letter Acronym.” The IT industry has a near obsession with three-letter acronyms to refer to categories of IT systems (e.g. MRP, ERP, CRM, SCM).
About the Author(s)
John Mooney, PhD, serves as the Associate Dean for Academic Programs and as Associate Professor of Information Systems. His responsibilities include oversight of the design and delivery of the Graziadio School's MBA, BSM, and non-degree executive education programs. Dr. Mooney's current teaching and research interests include business executive responsibilities for IT management, eBusiness transformation, and the management of IT resources and services. He has been honored with a number of teaching, research and service awards.