28 Dec CIOs must beware the dreaded “Generic IT” syndrome
Momentum has been building for the past five years behind the renewed strategic relevance of IT. Business demands for growth, greater customer service and operational efficiency have led them to expect more from IT. This is good news for CIOs and IT executives who have known all along that IT has significant strategic potential. Now if only CIOs would put their actions behind their words.
Many CIOs believe that IT is strategic, yet they make day-to-day decisions based on generic concerns. This leads to generic IT – the implementation and operation of standard technology in standard ways that achieve market-matching results. Generic IT and generic thinking is pervasive in many organizations. You know when you are thinking generically when concerns over technology cost and risk cause you to dial back on potential business benefits. This way of thinking made sense when IT was seen as a cost to be managed down. However, increasingly the name of the game has changed.
IT has become more strategically relevant as it has become pervasive in your organization. The penetration of IT management and transaction processing systems means that you cannot execute your strategy without executing IT strategically. Strategic IT, unlike its generic counterpart, focuses on the business issues and context to define the solution rather than market available technologies. Strategic IT also recognizes that all systems are not equal and that managing core systems required to run the business is different than applying technology to achieve business value.
Within the basics
Strategic IT recognizes the need for generic operations, particularly in areas that are necessary for operations but not sufficient to create competitive advantage. So strategic CIOs still have a significant generic operation concerned about IT cost, quality of service, and risk. Things like e-mail, storage, financial systems, and other back office technologies fit into this category. There is value in having them run right, but there is little additional value in having them run better than the basic requirement.
Generic IT recognizes the need for strategic technology, but often as something that is beyond their skills, abilities, or available resources. CIOs who think generically look to implement standards solutions in standard ways to manage cost and risk. Innovation, business process, growth – those are for the business issues rather than IT issues. Now I am being a little extreme here, but if your and your staff use the term “business and IT” then you are thinking generically, separating yourself from the rest of the organization.
How do you know when you are thinking generically? Ask yourself the following questions.
• Do you describe IT’s role as enabling your company?
• When budgeting for 2008, was a primary concern securing enough funding to cover your staff payroll?
• Do IT operational performance metrics such as systems availability and cost-per-server dominate your IT scorecard?
• Is delivering a project on time and on budget more important than delivering the functionality required to achieve the business case?
• Do you believe that it is easier to teach a business person technology than teach technology people the business?
If you answered yes to more than three of these five questions, then generic thinking is a significant part of your plan. If you’ve answered five out of five, then another question comes into play: have you recently had to respond to a request to outsource IT? If that answer is yes, then the business realizes that IT has become generic too!
Deregulation of IT
IT has become deregulated, not in terms of a legal change, but in terms of the fact that business leaders now have multiple choices to meet their IT needs. As little as five years ago, a company’s IT needs were met through a single source – you, the captive IT organization. Now there are multiple choices from Software as Service (ala Saleforce.com, and increasingly Google) to outsourcing and end-user developed systems. CIOs who do not recognize the competition created by this choice are placing themselves at risk.
Strategic IT thinking is important not just because IT is strategic but because strategic IT delivers results. IT budgets in companies looking to use IT to create distinctive solutions enjoy larger budget increases – 58 percent larger. These IT organizations also spend a higher percent of their budget on improving and transforming the enterprise.
Thinking strategically about IT does require recognizing the role of information and technology in addressing business problems. Notice I separated the two parts of IT because they are separate. Information, the knowledge and data found in your systems offers a wealth of value not only to improve management and operational decision-making but also to identify new sources of value, innovation, and operational improvement. The technology is important, but increasingly strategic value comes not from having technology, but by applying information to the technology in new ways. In other words, it is not what you have that’s important; it is what you do with it that matters.
Enhance your strategic thinking by answering the following questions.
• What is the source of your company’s competitive advantage? What makes it different in the marketplace?
• How does IT support that source of difference?
• What business performance measures will IT positively impact this year?
• What is the total business impact associated with the projects in the IT portfolio?
Make these answers part of the mission of the IT organization, its focus, its metrics and its contribution.
Beware generic IT because it is an attractive way of thinking about your role and responsibilities. Generic IT concentrates on protecting the enterprise from anything bad happening. That is important, but remember just because nothing is going wrong it does not mean that anything is going right. Enterprises are expecting IT to create more “right things” and CIOs have the ability to respond and make a significant contribution, if only they would think differently.
• Tom Austin: CIOs must keep pace with revolutionary change in workplace IT
• Gartner 2007: Abandon “generic IT” and grow the enterprise
• Gartner to IT execs: Be business leaders
• Patrick Gray: Supercharge business value with breakthrough IT
• Byron Glick: Now comes the hybrid CIO
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.
WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.