IT versus The Business
Most senior execs in large businesses would rather not have to deal with IT. I know it’s not exactly PC to say that, but being politically correct is fairly unproductive when considering an issue of this nature. When outsourcing was all the rage, this was one of the main drivers. The CFO could just give someone a lump of money and pretend that discussions centered around technology were a thing of the past. Only it didn’t work out like that. The CFO of one large UK retail bank was presented with a bill for $300,000 dollars for upgrading a server, which he duly paid. One of the few remaining project managers hired by this bank pointed out that the memory upgrade only cost $4,000 and could be inserted into the server by his mother. The project manager no longer works for this bank.
In fact the nub of these dynamics is well expressed by Putt’s Law:
“Technology is dominated by two types of people: those who understand what they do not manage and those who manage what they do not understand.”
This comes from a book titled “Putts Law and the Successful Technocrat” published in 1981 – and things haven’t changed very much. In fact I was prompted to write this article after a discussions with a technology and services supplier who raised the perennial issue of IT and business alignment. This phrase – “IT and business alignment” is a polite way of discussing the fact that they very often aren’t aligned. I’m not pointing fingers here, this problem is almost intractable. It was well demonstrated to me several years ago when I was asked to make a presentation to one of the world’s largest retail and investment banks. To cut a long story short, it seemed the CEO was worried because $4 billion annual IT spend was effectively controlled by a dozen or so headstrong technicians. He wanted systems that would support the fast assimilation of acquisitions, and they wanted the latest toys. Middle managers by-the-way, wanted CRM systems.
Suppliers know who controls the budget in most businesses, and so they cobble together Powerpoint presentations that use phrases such as “the speed of thought”, “a standard in your industry”, “a trusted solution”, “quick return on investment”, and in fact anything that might make business managers feel more at ease. The technology and how it works is rarely mentioned. It’s a bit like buying a new car without asking about the engine capacity and power.
So managers are very often put in the position of having to select technology and solutions, without really knowing what is under the bonnet. Technicians on the other hand may just decide to select the most interesting toy, and the one that will add most value to their resumé.
There is a solution to this, but it is surprisingly unpopular. Hire a CIO and place her/him at the right hand of the CEO. It’s that easy/difficult. Most CIOs report to the CFO, for reasons that are not really clear. Money is a critical resource and so the CFO clearly needs to have the ear of the CEO. Information is actually a more important commodity, and so it would seem natural that the CIO also has the direct ear of the CEO. The CIO needs to be a strong character, and knowledgeable. Decisions about technology need to be made by someone who appreciates the issues. Once in this position the CIO can then translate the desires of the CEO and Board into action. It doesn’t seem terribly difficult in theory, but the dislike and distrust of technology can make the CIO’s job quite difficult.
And just in case your business does manage to sort out its technology issues, we now have a new bunch of people who speak an entirely different language to business folk. They are called data scientists, analysts, and other names. I think this emergence of new, very powerful groups within the business is pointing at something. I’ll let you figure it out.