building it leadership: revisiting key issues

Building IT Leadership: Revisiting Key Issues

Presenter:

Leslie WillcocksProfessor of Technology Work

And GlobalizationLondon School of Economics and Political Science

email: [email protected]

BCS London May 17th 2007

(C) Leslie Willcocks, 2007

Does IT Matter?

Carr, N., "IT Doesn't Matter," Harvard Business Review, Vol. 81, 5, May 2003, pp. 41-49. Friedman, Thomas, The World is Flat, Farrar, Strauss, and Giroux, New York, 2005, pages 3 to 172


Nicholas Carr: Does IT Matter? Harvard Bus. School Press, 2004

• IT is just a commodity:

“IT is an infrastructure technology like the steam engine, railroad, telegraph, telephone”

• IT is no longer a source of competitive advantage:

“The core functions of IT—data storage, data processing, and data transport—have become available and affordable to all.”


Nicholas Carr: Does IT Matter? Harvard Bus. School Press, 2004

• Spend less. Studies show that the companies with the biggest IT investments rarely post the best financial results.

• Follow, don't lead. Moore's Law guarantees that the longer you wait to make an IT purchase, the more you'll get for your money.

• Focus on vulnerabilities, not opportunities. Even a brief disruption in the availability of the technology can be devastating.


Friedman: The Ten Flatteners

Platform Building• 11/9/89 (PC revolution: Windows)• 8/9/95 (Internet Revolution: Netscape goes public)• Work Flow Software (application protocols let computers talk to computers)• Open-sourcing (Best software is available to everyone) Platform Use• Outsourcing (global sourcing of knowledge work)• Offshoring (moving facilities to cheapest location lowers prices, stimulates the economy)7. Supply-Chaining (eating sushi in Arkansas)8. Insourcing (allows small firms to act big)9. In-forming (Google, Yahoo, MSN) Platform Enhancement

10. The Steroids


Key Issues For IT Executives - 2006-7

Top Ten Management Concerns:1. IT and Business Alignment2. Attracting, Developing and Retaining IT Professionals3. Security and Privacy4. IT Strategic Planning5. Project management capability 6. Introducing Rapid Business Solutions7. Speed and Agility (new to top ten)8. True Return on Individual IT Investments 9. Measuring The Value of IT Investments10. IT Governance

Note: - 70% organisations are Maturity 2/3 on alignment (out of 5)

See Luftman et al. (2006) MISQE Key Issues for IT Executives for earlier surveys


2006 2005 2004

Delivering projects that enable business growth 1 1 18

Linking business and IT strategies and plans 2 2 4

Building business skills in the IS organization 3 9 1

Demonstrating the business value of IT 4 3 2

Attracting, developing, and retaining IS personnel 5 * *

Applying metrics to the IS organization and IT services 6 4 14

Improving the quality of IS service delivery 7 7 3

Flexible technology infrastructure 8 * *

Improving IT governance 9 10 11

Consolidating the IS organization and operations 10 8 **

2006 CIO Strategic Management Priorities

* New question for 2006** New question for 2005

To what extent will each of the following CIO actions be a priority for you in 2006?

Ranking

Source: 2006 Gartner EXP CIO Survey

43

6

1

5

8

2

11

9

10

7 -Reducing IS complexity

x = Retail (58 CIOs)

6

x = Telco (29 CIOs)

Improving Business Continuity Planning. -

152

12

1

9

8

3

7

5

4

Moving to a service-based org. - 10


Key Issues: Some Food For Thought...

1. Technology2. Strategy3. People4. Structure 5. Governance 6. Eight IT Differentiators


Top Six Application and Technology Developments:1. Web services (new to top 6)2. Business Intelligence3. Security Technologies4. Business Process Management (new to top six)5. Customer Portals (new to top 6)6. Systems Integration

Key Issues For IT Executives 2006-7

Other: SOAXMLEAI/MCorporate performance mmt.CRM


IT Hype

IT Capability

'Useful' IT

'Strategic' IT

Willcocks, Feeny, et al 1997

Four Domains of IT


IT/IS Strategy Formulation:A Multiple Methodology

Business plans and Goals

Current System IT Opportunities

Mandatory Strategic Development Infrastructure Renewal Maintenance R&D

Strategic Application Plan

AnalyticalMethodology

Opportunities, Threats

‘Listen to the Technology’

Teamwork

Evaluative

Surveys & Audits

Strengths Weaknesses

Users & Specialists

Creative

Techniques, Processes & Environment

Examples Scenarios

Bright Sparks & Product Champions

‘Top Down’ ‘Bottom Up’ ‘Outside-In’

Source: Earl, 1996


Strategic IT Sourcing (Willcocks et al, 2002)

Contribution to Business Operations

Contribution to Competitive Positioning/Core Competence

CriticalCritical

UsefulUseful

CommodityCommodity DifferentiatorDifferentiator

‘Qualifiers’

‘Necessary Evils’

‘Order Winners’

‘Distractions’

(Best-source:In-House/Partner)

(In-House/Buy-In)

(Outsource) (Migrate or Eliminate)


The Role of Organisational Architecture

Organizational Architect- creates options (scenarios) - converts set of options into organizational requirements- assesses level of change required- helps refine vision- identifies organization design for vision- helps refine technology architecture

Board/CEO/

Inner Circle

IT Architects

Visions refined through informed dialogue

IT architecturerefined throughinformed dialogue

Actionable vision- organization design- technology platform

Source: Sauer and Willcocks 2002


CEO’s Attitude to ITCEO’s Attitude to IT

• IT Vision to Transform

Top ManagementTop Management Team ProcessTeam Process

• Personal/Informal Culture• ‘Away Day’ Workshops

CIO’s Personal ProfileCIO’s Personal Profile

• IT Knowledge/Experience• Business Loyalty/Focus• Goal Seeking BUT ALSO• Consultative Leadership• Ideas Oriented

CIO’s Position in CIO’s Position in OrganisationOrganisation

• Member of Top Management Team

ExcellentExcellentRelationshipsRelationships

Source: Earl and Feeny, 2000


Business and Function Vision

Delivery of Service Architecture

Planning and Design

Business SystemsThinking

ContractFacilitation

TechnicalArchitecture

ContractMonitoring

VendorDevelopment

Making Process-IT work

RelationshipBuilder IS

Leadership;InformedBuying

Nine Core Back-office CapabilitiesRetained Core IT Capabilities



1. Technology2. Strategy3. People4. Structure and Governance 5. Eight IT Differentiators


The IT Function: Enormous Pressure to Change

•Value for Money•Quality, Service•Time•Compliance•Social and Green Resps.

More knowledgeable

AND demanding users

UserPressures ?IT

TechnologyChallenges

Businessand external

Pressures

•Diversity•Distribution, Integration•Packages•Emerging technologies•Etc.

IT Service Suppliers

ExistingSystems


Six Models of IT Organisation

1 Corporate Service

2 Decentralised

3 Internal Bureauand

4 Business Venture

5 Federal


Six Models of IT Organisation

6a Outsourced: Corporate Service

6b Outsourced: Federal

supplier

supplier


Governance Defined

“IT governance—specifying the framework for decision rights and accountabilities to encourage desirable behaviour in the use of IT.” –Weill, MISQE, 2004

• Decision rights and inputs• Desirable behaviour e.g sharing, reuse, cost savings, innovation, growth• Mechanisms – IT council, architecture office, SLAS…• Business value – responsibilities, accountabilities, metrics…


Stronger IT Governance Is Needed:

• IT has become more important, but less under ‘control’ of the IT function

• Firms face major new opportunities and risks as IT migrates outside the IT department

• Complexity and ‘rogue’ behaviour need to be managed

• Links to, and learning from, corporate governance

• Top IT performers govern IT differently depending on objectives – asset usage, revenue growth, flexibility, ROA/profits

• The business must help by:

– Understanding what is possible, and not possible, in IT

– Providing more explicit direction on the business approach and priorities

– Disciplining its own behaviour, cooperating more

– Addressing complexity head on

– Being engaged in its IT governance and management responsibilities

– Making some uncomfortable choices e.g on shared services/applications…..


Important IT Governance Concepts

• IT Principles – Clarifying the business role of IT• IT Architecture – Defining integration and

standardisation requirements• IT Infrastructure – Determining shared and enabling

services• Business Application Needs – Specifying the

business need for purchased or internally developed IT applications

• IT Investment and Prioritization – Choosing which initiatives to fund and how much to spend

Weill and Ross, 2004


Summary: Eight I.T. Differentiators

• Listen to the technology; be informed by globalization dynamics (Friedman, 2005: Moscella, 1997, 2004)

• IT governed as a strategic portfolio by relevant stakeholders (Willcocks et al. 2003: Weill and Ross, 2005)

• IT led by a credible CIO, influential amongst senior business execs. including CEO (Feeny and Ross, 2000)

• Disciplined mixed sourcing strategy, management, and delivery regime (Cullen and Willcocks, 2004: Willcocks and Lacity, 2006

• Business maturity to manage IT as a strategic resource (Willcocks et al. 1997; Broadbent et al. 2005)

• Retain specific key IT capabilities (Willcocks and Lacity 2006) • Ensure key supplier capabilities (Feeny et al., 2005)

• Core organizational project management capability (Willcocks et al., 2003)

EnsureValue for IT

Spend

to


USEFUL REFERENCES

1. Willcocks, L. et al. (2003) Making IT Count: Strategy, Delivery and Infrastructure. Butterworth-Heinemann 2. Willcocks, L. and Lacity, M. (2007) Global Sourcing of Business and IT Services. Palgrave, London 3. Sauer, C. and Willcocks, L. (2002) Evolution of the Organizational Architect. Sloan Management Review, April.4. Weill, P. and Ross, J. (2004) IT Governance. Harvard Business Press, Boston5. Willcocks, L. et al. (1997) Managing IT As A Strategic Resource. McGraw Hill, Maidenhead6. Earl and Feeny (2000) How to be a CEO in an Information Age, . Sloan Management Review, Winter

building it leadership: revisiting key issues

Documents

business value

business growth

business alignment2

business intelligence3

harvard business review

building business skills

infrastructure technology

new question