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64 IT Pro March/April 2013 P u b l i s h e d b y t h e I E E E C o m p u t e r S o c i e t y 1520-9202/13/$31.00 © 2013 IEEE

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Why Is IT Still Broken?Tom Costello, UpStreme

Beverly Prohaska, West Pharmaceutical Services

Although the question “Why is IT still bro-ken?” comes up of-ten in various forms

at executive and board meetings, this elephant in the room is now starting to surface with higher fre-quency at IT-only meetings and conferences. The most popular form of the question, when asked between CIOs, is “Why hasn’t IT delivered the promises we envi-sioned 20 years ago?”

Before tackling this question, let’s start with a couple of base-line observations and assumptions: there’s no perfect IT organization, there’s no “one answer” to the question, and there probably isn’t a given solution that will fix every or-ganization. However, there are a lot of common threads that are likely to be key contributors to the situa-tion, and each organization should sift through this array of items to identify one or two starting points. Here are some likely culprits.

Uninformed Business Management TeamsWhen informally polling CXOs (CEOs, CFOs, and so on) and

board members of various orga-nizations (off the record), most will admit that they don’t actually know how IT connects to the busi-ness. Although they understand key industry-specific tools—such as enterprise resource planning (ERP) and billing systems—they don’t necessarily understand the costs associated with implement-ing or supporting such tools. When asked, most aren’t aware that their organizations have re-dundant applications and teams and a myriad of unconnectable data. They assume that “it just works” and are shocked when informed of investment needs to satisfy requested projects.

Additionally, many tools imple-mented by IT are underutilized by the business. In some cases, this is simply because the business envisioned a given functionality, and the tool came with more. Although most project rollouts include some form of training, most don’t include any formal governance process to ensure maximum value is captured. Or-ganizations are thus underutiliz-ing their investments and failing

to realize expected or potential benefits.

The solution is to have IT-savvy people in “the business,” which requires a program to educate and build this workforce. The pro-gram should include mandatory job rotations through IT.

You also need a long-term pro-gram to slowly educate senior management and board members about the interconnectivity of IT with business functions. For key projects, you should identify a business sponsor who has a vested interest in ensuring that IT-related investments drive value, and that sponsor should lead the presentations to management. These presentations can’t be about server counts and technical data. They must start as a review of a given business capability and should be followed by an explana-tion of all of the IT investments required to support that capabil-ity. At the end of each business-capability review, the business owner of that function should discuss his or her satisfaction with that capability, future plans, and

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the benefit of further investment (business and IT investments—not just IT spending). Any project rollout (and perhaps annual re-view) should institute policies for measuring and reporting on prog-ress to ensure the business derives maximum value.

Poor Portfolio ManagementBeyond the lack of understanding and commitment to the invest-ment required to remove redun-dant apps (and thus duplicate costs), most organizations fail to align project requests with cor-porate goals and budgets, which is a twofold problem. First of all, most firms don’t do a good job of estimating costs and benefits and experience overruns during implementation. Second, most

firms don’t accurately recognize the spread of investments across required-versus-optional proj-ect requests and leave no slack for surprise requests that pop up during the budget year.

Many companies adequately measure implementation costs for key projects but do a lousy job of measuring the realized benefit. Organizations rarely measure (or recognize) the staggering amount of money spent on IT projects for a given year that didn’t appear in the original budget or portfolio of approved projects. Few of the companies that capture this data take the time to implement some form of corrective action. Many organizations have attempted to create project-portfolio efforts and Project Management Offices to better track projects, but again,

the shortcomings of these ap-proaches are that they typically in-volve only IT. Furthermore, they focus heavi ly on whether the project was executed on time and within budget and pay no at-tention to the derived business value.

The solution is to implement a portfolio process that captures costs and benefits. Although cre-ating a project portfolio almost always starts in IT, the long-term goal should be to move this func-tion out of IT and closer to the business—ideally, to the source of strategic planning. The busi-ness must commit suf f icient resources—staff, funding, access to non-IT systems, and so on (with adequate targets for using such resources)—for the duration of the project.

In addition to reviewing the tra-ditional metrics of project execu-tion (timeline and budget), reports should compare actual versus planned team participation and investments. Reports should also address whether the delivered sys-tem achieves the business value promised.

Based on the benefit horizon outlined by the business owner at the time of the initial request, del ivered projects should be monitored over the subsequent years of operation to determine if the expected business value was achieved. Business owners who exaggerate should be counseled, and all future portfolio requests should have an adjustment factor based on the requestor’s previous track record. Executive manage-ment should receive a report of

“planned-versus-actual” spend-ing at the portfolio level—not just at the individual project level. By doing so, the number of un-planned or ad hoc requests (along with correlated spending and resource-allocation disruption) will be evident.

L a s t l y, a c o n t i nu o u s i m -provement program should be implemented to ensure the port-fol io process is adjusted each year to maximize value to the organization.

Business Projects Viewed as “IT” ProjectsThis is more than just a bad mindset—it’s a dysfunction. Most companies still refer to their proj-ect budgeting process as IT proj-ect planning. A few companies wave around the “business proj-ects” buzzword during the plan-ning phase to get the business to more seriously calculate the ben-efit. However, once the project is green-lighted, participation falls off dramatically.

Anyone who has done pack-age implementations or custom code development knows how tough it is to get users to show up at design meetings, to com-plete testing, and to get busi-ness sponsors to at tend key project meetings. Even if you’re one of the few firms with high participation, you probably don’t have a mechanism for revisiting projects after implementat ion to measure whether the benefit was realized.

T h e s o l u t i o n r e q u i r e s organizat ional-wide basel ine training (business, IT, leadership, partners, vendors, and so on) to establish what’s required of all participants when running proj-ects. As any experienced project manager or CIO knows, there’s no one cookie-cutter approach to assigning resources to projects. However, every project should

(continued from p. 64)

Many companies adequately measure implementation costs for key projects but do a lousy job of measuring the realized benefit.

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have a RACI chart that outlines who is responsible, who is accountable (key participants), all contributors, and those who should be informed. You’ll make signif icant prog-ress in increasing business-side participation by constructing, reviewing, and enforcing a RACI chart for key (or high-risk) proj-ects. Ultimately, this approach must become a mindset for all projects.

The Four-Generation WorkforceToday’s typical organization has four generations spanning their workforce—the Boomers, Gener-ation X, Generation Y, and the Mil-lennials. Generally speaking, the Boomers have extensive business experience but were born in a period before video games and personal computers and t he re fore acquired technical expertise slowly as the technol-ogy evolved around them. Mil-lennials, on the other hand, are deeply immersed in technology and have never known a time without Facebook, but they have little-to-no business experience and are struggling to enter the workforce.

Societal pressures are keep-ing many Boomers in the work-force longer and are consequently keeping Millennials out. This has created many work environments where key leadership and business personnel don’t “get it” and don’t want to “get it.” As a result, many projects don’t have an appropri-ate balance between business and technical skills.

The solution isn’t to fix society or boot out the Boomers to make room. Rather, you need to focus your investments on cultivating a business- and technology-savvy workforce. This would include a business and technology awareness program primarily targeting Gen-X and Gen-Y personnel. This program

should include training and job rotation, where program partici-pants spend dedicated time in an IT position to better appreci-ate the complexity and costs of enterprise IT (and not just the consumer IT they’ve know and love).

W e could list more symp-toms leading to the perception (real or not)

that in 2013, IT hasn’t ye t achieved as much as hoped or possible. In fact, many of the new challenges facing IT and busi-nesses couldn’t have even been envisioned just five years ago (such as cloud computing, tables and other mobility devices, and Bring Your Own Device policies). However, part of being an IT

professional means accepting that there will always be change. We can’t blame innovation for our own lack of progress toward higher-efficiency IT.

Although the four items listed here are a small sample of the problems CIOS face, they pro-vide the greatest constraints to progress, so addressing them

presents the greatest opportunity for breakthroughs. Tackle one of these items—the one that you believe would provide the most progress for your environment—and feel free to share your results with us.

Tom Costello is CEO of UpStreme, a business and technology management consultancy with practice specialties in enterprise strategies and software logis-tics. Contact him at tcostello@upstreme.com or www.upstreme.com.

Beverly Prohaska is the VP of Global Information Technology for West Phar-maceutical Services, where she leads all IT services for the Corporate, Pharma-ceutical Packaging Systems and Phar-maceutical Delivery Systems Divisions. Beverly received her Executive MBA

from the University of Pit tsburgh. Contact her at beverly.prohaska@ westpharma.com or through Twitter at #baprohaska.

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We can’t blame innovation for our own lack of progress toward higher-efficiency IT.

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