Two Studies Indicate Need for IT Pros to Get Businesslike

 

Updated Feb. 1, 2012

CEOs have long complained to me about information technology. They complain about high-priced consultants, and that IT projects are too expensive and fail to yield a return on investment.

Now, two 2011 studies underscore the need for IT professionals to become more businesslike.

Study No. 1

At ITBusinessEdge, Ann All wrote a dynamic piece, “Don’t Let IT Projects Get Out of Control.” In it, she cites a study by McKinsey consultants and Oxford University that show both public and private sector IT projects can be a headache.

But the public sector gets more criticism thanks to enterprising journalists.

Ms. All cites Oxford Researcher Bent Flyvbjerg in a silicom.com article.

“A big one is lack of senior executive involvement,” she writes. “Senior managers have tended to see IT as less strategic and delegate responsibility for it…”

She quotes researcher Flyvbjerg, who provides his five solutions to prevent out-of-control IT projects, which include:

1. Benchmark it. This should be the first step, says Flyvbjerg, because it will help organizations understand everything that follows.
2. Get the bias out of the business case. The researchers found most IT projects are “highly biased,” with inaccurate estimates of costs, schedules and benefits.
3. Minimize complexity. This advice gets repeated a lot.
4. Limit project duration. The researchers found that projects that lasted longer than 30 months are the most likely to go out of control.
5. Get a master builder. It’s important to enlist someone with proven project experience, Flyvbjerg says.

Study No. 2

A Tenable Network Security study indicates 90 percent of security professionals are aware of reported breaches, but the majority don’t take proper action.

That’s right, the Tenable press-release headline reads: “90 Percent of Security Pros Take Note of High-Profile Breaches, But Majority do Nothing.”

The study surveyed attendees at the 2011 Gartner Security & Risk Management Summit. More than 90 percent were aware of the Citigroup, RSA and Sony breaches, but only 23 percent didn’t act on the information.

It gets worse.

“Nearly half (46 percent) of attendees surveyed had experienced some form of insider threat while at their current company, but surprisingly ‘preventing insider threats’ was ranked the second-lowest information security priority for the next six to eight months by the field,” said the press release.

“Even more surprising, one in three security professionals admitted that they had violated internal security policies they created in order to complete a work-related task quickly and/or easily,” Tenable added.

Yes, part of the problem with such IT projects is the lack of full participation by upper management, but clearly, chief information officers and their staffs have to do some needed footwork in communication and planning.

From the Coach’s Corner, so there’s no mystery regarding the conclusions in this Study: CFOs Still Calling the Shots in IT Decisions.

Here are two other resource links for IT:

How CIOs Can Get More Respect in the C-Suite

Tech Planning: What if There’s a Double Dip?

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

-Bill Gates

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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

 

Study – CFOs Still Calling the Shots in IT Decisions

 

The top IT decision-maker for many companies is not the chief information officer. Instead, the chief financial officer is, according to a Gartner study.

The chief financial officer is becoming the top technology decision maker in around half of businesses, according to Gartner research released in June, 2011, which is entitled: “Financial Executives International (FEI) Technology Study.”

In fact, more IT departments are overseen by the CFO, not the chief executive or other senior managers. But this is ill-advised, and I’ll explain later.

The study’s conclusions:

• 42 percent report to the CFO
• 45 percent IT investment strategies made by the CFO
• In 38 percent, the IT department is managed by the CFO
• In 7 percent, the CFO is the lone decision-maker

“Understand that the CFO views the impact on business process and business enablement as the top technology issues,” said Gartner analyst John Van Decker.

“Therefore, applications and analytics are the top investment priorities, and the enabling technologies that support these initiatives need to be viewed as equally important,” he added.

The study also indicated that analytics and applications are the No. 1 investment priorities by the CFO.

While this trend probably makes financial executives happy, it doesn’t make for best practices.

It raises at least three questions:

• Do such CFOs have the necessary tech knowledge to understand the value of each decision? Sufficient steps have to be taken to ensure due diligence in IT security and other decisions.
• When will CEOs reconsider such strategies because of the negative impacts on the teamwork and morale of IT departments? An IT thought leader will resent such intrusions on the chain of command in organization structure.
• What will CIOs do about it? CIOs must take the proverbial bull by the horns to exert more leadership.

My bottom-line: Agreed, the CIO should adhere to all financial checks and balances. But there should be balance. As with human resources management and marketing whom the chief people often aren’t sufficiently respected, in essence, the top IT decision-maker should be the chief information officer with input from the CFO and other managers.

From the Coach’s Corner, here’s related reading:

How CIOs Can Get More Respect in the C-Suite

Tech Trends: CFO’s the Boss, IT Departments Are Disappearing

Tech Planning: What If There’s A Double Dip?

“Men are respectable only as they respect.”

-Ralph Waldo Emerson

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Terry Corbell is a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complementary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?

Tech Planning: What If There’s A Double Dip?

 

Pick any region. Most respected economists and other experts believe economic growth will be tepid, at best. There are continuing concerns about the world’s economy, and it’s important to ask a key question: Are you ready for a possible double-dip recession?

Certainly, many global economic trends are eye-opening. Here in the U.S., job-growth and the consumers’ inability to buy are major concerns.

Moreover, public policy at all levels – federal, state and county, and city government – is hurting the nation.

At the federal level, stimulus spending that totals more than $1 trillion has been inefficient. Relatively few jobs are being created and there are constant calls for more spending. Policies are detrimental. The healthcare reforms are anything but productive. The legislation created 19 new taxes, it lacks cost-controls, and insurance premiums are mounting.

For years, state and local governments have been fiscally dysfunctional, too. They are still increasing taxes and slashing services.

Businesses are disappointed. Many lack an incentive to invest in human resources, marketing and technology.

The aggregate impact: A further deterioration of Americans’ financial and political freedoms.

So, it was not a surprise that technology-research firm Gartner recommends in a study that chief information officers should get ready for another downturn. That requires planning.

Authors of the study, Plan for a Second Recession, Now, wrote: “We urge these CIOs to leverage their recent experiences by preparing their enterprises should another economic downturn occur within the next 12 to 18 months.”

Gartner believes it’s important that CIOs communicate closely with senior company executives on priorities. Which IT projects for the next 18 months could be postponed or even disregarded?

My sense is that very function or project should be comprehensively studied and any spending should be approved. The budget needs to be detailed and every item needs to be justified. That’s called zero-based budgeting.

Just to cover all the bases, your department’s finances need to be constantly reviewed.

If your company is in dire financial straits and is attempting a financial turnaround, it’s also important to understand the perspectives of both the senior executive and the chief financial officer.  There must be a daily review in the form of a flash report. A flash report can be designed to monitor indicators on a daily basis and to evaluate your actual performance against the turnaround plan.  For more reading, see Step-by-Step Solutions for a Company Turnaround.

If a poor relationships exist between IT and the finance department, which is often the case, it’s important to understand the CFO mindset. You might want to read: Tech Trends: CFO’s the Boss, IT Departments Are Disappearing.

Good luck. Start planning and strap in the proverbial seatbelt if the roller-coaster ride proves to be harrowing.

From the Coach’s Corner, if you’re thinking about getting into business for yourself, I’d recommend reading: Eight Strategies to Consider Before Starting A Tech Business.

Not convinced about economic conditions? Here’s an eye-opening headline: Gartner Trims Worldwide IT Spending Growth Forecast to 3.9 Percent.

How CIOs Can Get More Respect in the C-Suite

 

Despite the importance of their work, chief information officers have difficulty earning respect from senior executives. Ironically, information technology plays a vital role in an organization’s risk management and profits.

But CIOs are not alone. Like many advertising and marketing professionals, CIOs face a glass ceiling because they’re not seen as management peers at the conference-room decision-making table.

Why? Have you ever noticed that IT people do not take the lead in strategic initiatives?

They do not convey that they understand the big pictures facing their employers. They appear to be too task-oriented. They often project the image that they only follow what’s at the end of their nose and that they get immersed in details.

How can a CIO acquire all the necessary skills to fix the problem?

What CIOs need is a vision of how their IT department can best-serve their employer.

Earning C-suite respect calls for taking the initiative – being ahead of the pack in emerging technology and applications that benefit or complement a company’s strategic plans, assessing options, communicating strategies, developing strong relationships in and out of the company, and possessing self-marketing skills.

This really starts by being able to listen and asking relevant open-ended questions. Have you ever noticed the most-powerful people in a room often do the most listening?

A personal investment of time is required. Develop a strong familiarity with every business unit in the organization. That includes operations, marketing, sales, finance and human resources. This is accomplished by asking colleagues for information about issues, challenges and goals. One good method is to ask a different peer to go to lunch every week.

CIOs also need to read what CEOs read, learn how they think, and emulate their abilities to compartmentalize and synthesize events and information to develop objectives.

IT pros need to become known for effective teaching skills. A good educator becomes the go-to person in any organization.

This requires the ability to sell ideas and information – to be able to explain what data and what developments mean to the firm. This can lead to strong relationships, which are imperative for universal respect.

If all of this was so easy, everyone would be doing it. Chip away at learning these skills and you will be on your way to earning more respect in the C-Suite.

From the Coach’s Corner, for more reading, check out these two sections on this site:

• 10 Characteristics of a Successful CEO
• Various Biz Coach columns on management strategies in  this Human Resources section

Tech Trends: CFO’s the Boss, IT Departments Are Disappearing

 

Two developments are clearly underway in information technology. Increasingly, the chief financial officer is in charge and IT departments are shrinking in size.

First, regarding the shrinking size of IT departments, a Corporate Executive Board study indicates they’re diminishing in size, according to writer Joe McKendrick  at SmartPlanet.com.  It’s not a cutback in jobs, just a shift in how IT professionals are put to work. He writes companies are either are tapping IT service providers or clouds.

The study indicates IT department will be75 percent smaller by 2015, and 80 percent of IT budgets will be spent on IT vendors’ services.

What’s driving this phenomenon? Probably best-practices in consolidation as CFOs assume more authority.

A study by Gartner and Financial Executives Research Foundation (FERF) was based on the perspectives of senior finance managers. It’s entitled, “2010 Gartner FEI Technology Study: The CFO as Technology Influencer.”

Findings include:

• Forty-two percent of IT departments report to CFOs
• Thirty-three percent are supervised by the chief executive officer
• Sixteen percent report to the chief operating officer
• Two percent are overseen by the chief administrative officer
• Seven percent to other executives

Most importantly, the CFO has a major say in 75 percent of IT departments and a minor input in 20 percent. In 5 percent, the CFO has no influence.

“In most organizations, the CFO and CIO work together daily to finance IT and provide information that supports financial processes, but there is also an opportunity for them to form a powerful alliance that generates more value for the enterprise,” said Bill Sinnett, FERF’s director of research, in a statement.

“The CFO and CIO are well-positioned to work together at generating superior performance from the enterprise,” he added.

The  study makes it clear IT department personnel, especially the CIO, should understand an organization’s big picture and how they can best contribute to the  firm’s welfare via the CFO.

My Biz Coach conclusion from the two developments:  IT success hinges on acculturation with the finance mindset as well as a higher degree of integration with the rest of the organization. It’s different but it’s the wave of the future.

Resource link: Mr. McKendrick’s article.

From the Coach’s Corner, TechRepublic’s Toni Bowers has apropos advice for IT professionals facing such trends in this blog: What to do when you get a new boss at your current company.