Implementing new technologies for the right reasons
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"What happens in most of these situations is that we end up with a solution being implemented that may or may not address a business problem, has little buy-in from the business users, and is never fully utilised. In these cases the enterprise does not get the full return on its investment."
Even if you have the best and more up-to-date enterprise software/tech, if you don't really need it (or your employees don't fully know how to leverage it) your investment ends up going to waste. So many projects fail because of this.
You need to use the correct Implementation strategy. Correct process should be captured and then the users need to trained properly. Users need to be then tracked in training and live enviornment to get best results.
Connect with me at nishant.b@epiance.com for more information
By taking this structured approach the business will be driving the needs and will be involved in the necessary process change, which will generate greater buy-in and the technology will be fulfilling a business need. Hopefully this will lead to the enterprise getting the returns it desires (or at least have the best opportunity to achieve them
"we end up with a solution being implemented that may or may not address a business problem, has little buy-in from the business users, and is never fully utilised. "
A common problem in many IT departments. The new technology may look good on paper, but once it's actually implemented (if it ever truely is) no one know what to do with it. It's a waste of resources to invest in a technology that your company isn't going to fully leverage.
I think most if all CIOs have ruled out technology for technology's sake although I suppose such initiatives are being launched every day. We would be unlikely to know since enterprises don't exactly advertise their IT failures. In age of tight dollars and using only what is demanded, it's hard to imagine millions being poured into IT projects.
The emphasis these days seems to be more focused on business projects which, most often, have an IT element.
Thank you all for the discussion and insights.
I'm researching the effects of implementing IT solution without clearly defining business objectives and processes. I'm looking to illustrate exactly how it's not time or cost-effective to take this approach.
Particularly - when you're implementing the technology - what does the implementation look like when objectives and processes aren't clearly defined? What is happening day-to-day during the planning and implementation that might be a red flag saying "we don't have clearly defined objectives and processes"?
Any resources or insight is appreciated. I'm happy to to exchange emails or phone calls if anyone would like.
Your blog post is great, and it shines a light on the IT-business strategy alignment model that should drive technology adoption in the the enterprise. The IT organization needs to engage in regular learning cycles with business units to improve the value chain by eliminating the weak links. We can use the strengths, weaknesses, opportunities, threats (SWOT) analysis and gap analysis to see where problems exist, but that is not enough. The next step is to closely examine the business strategy and the way IT is aligned through Michael Porter's five forces of competition. These forces are new competitors entering the market, replacement for our organization's product lines by some unknown product (eg. a screw driver for an impact drill), customers bargaining power, supplier bargaining power, and rivalry with existing competitors. The only legitimate rational to invest in new technology is to handle business objectives effectively, and to do that requires organizations to learn what the market expects from partners and suppliers. The learning cycles must include finding out what weaknesses and threats you can transform into opportunities to strengthen the competitive position over the long-term. One question that CIOs need to learn the answer to as an example is what they can provide to generate customer lock-in for products and services, especially the most profitable products and services, that the organization provides. Looked at from this perspective we can see that nobody can answer this on their own, and they need to include the marketing, sales, and IT managers to learn the answer. Once the answer is found then we have a good starting point for building a list of requirements to make the solution. This is how you keep from buying technology out of alignment with the business that is a cost center rather than the catalyst for improved organizational value.
It would seem to be a simple matter of IT listening closely and regularly to the business - marketing, finance, operations, manufacturing etc. It should be largely a one way conversation - those departments to IT which furiously takes notes and goes back to the proverbial drawing board and comes with technology that responds to those needs.
Simple, right? Why, then, is it so hard?
The CIO works with the CEO and other C-suite to design a strategy from the available information inside and outside the organization. Any time the strategy shifts, even slightly, the CIO must communicate the new requirements. This is the source of information that business and systems analysts use to form a new baseline asset inventory and mark up the IT portfolio. The work of change happens in this slot because it has the executive backing and buy-in necessary to manage change. In some large organizations even the smallest change is costly, but we must assume that the CIO has the best available information as a basis for strategic decisions, therefore providing the value for instituting change. Much work cascades down from this point, and it is representative of why implementing technology for the right reasons is so hard. A high volume of documentation is needed to track, maintain, and construct strategic change, and it must be programatic in nature. The IT Performance Improvement model plugs in nicely because it asks business specific questions to absorb the strategic information coming out of the C-suite. This model places four main questions around information technology. IT supports the questions with infrastructure, real time applications and integrations. The information flows around the model from the question "Where Do We Want to Go?" to "How Shall We Get There? Strategy, Plans... I want to stop right there because it is the most important since it is the foundation for technology implementation decisions. The IT strategy must precisely align with the business strategy at this spot for mature alignment. There are five levels of IT-Business strategy alignment maturity, and these levels are so critical that an enterprise could measure the difficulty level of technology selection in conjunction with the maturity level.
Organizations need to invest heavily into improving their IT-Business strategy alignment maturity or IT performance will not improve. This is especially true in large organizations where even minor changes require major resources. Measurement of IT performance bridges between the strategy and the next question on the IT-Performance model, which is "How Well Are We Doing?" I can not stress enough the fact that IT management needs to focus more on the enterprise mission, vision, and strategy as the primary source of inspiration. Even though we are custodians of all business data, only a few are trained to translate that into business decisions, and they are given the title CIO. I believe this is the way they want for IT managers to listen; for understanding and constant progress.
We've had great success with considering the 'utility' of IT initiatives. Firstly they are not projects until they have been approved and budgeted for. 'Utility' is a nice concept because it gets thinking away from pure ROI. (How many IT projects have you attahced to a business project because you know they will not stand on their own when it comes to ROI?)
So utility factors are considered. The factors we use are: ROI, risk mitigation, PoA (Paths of Action that will become available once the tech is live), urgency, and strategic fit. Each initiative is scored against each utility factor.
In this way we can start to compare 'apples' with 'oranges'. Each initiative gets a utility score based on two elements - the initiative score mutliplied by enterprise weightings. We use a model for categorising our initiatives into five layers (run, grow, change the business is way too coarse). One of the layers we have is 'service the business' - business growth needing IT, upgrades and maintenance etc. In the 'service' layer, the enterprise has decided that ROI scores a mere 10% while risk mitigation scores 40%. and so on.
So if an initiative is categorised as a 'service' initiative, then it almost doesn't matter how much ROI we expect. The issues are risk and urgency.
The benefits of this utility approach have been profound - we get business executives saying things like: "So this network upgrade is more about risk and sustainability, and not about ROI?" We are also able to promote 'leadership' initiatives because we can compare them with run of the mill upgrades etc.
I always think that "Information" word in CIO title says it all. As much as I believe that CIO is an interface between business and technology as it rightly shows on your diagram, the fact that CIO is in the driving seat and not CTO shifts CIO job description weight towards business. If CIO cannot address key bsuiness needs then it does not really matter how good technological choices are as the ultimate goal remains growth and efficiency.
"... ensure that the process change needed precedes the technology component, or at worst is tightly coupled with it. If we fail to resolve the process issues before implementing technology we end up with a bigger problem." Timeless advice and well worth keeping front-of-mind every day we interact with technology.
I discussed something very similar with another JD Irving executive, Merv Symes, a couple of years ago. This goes to underscore that "process-preceding-technology" should be considered as a guiding principle at an organization-wide level.
Thanks for your post.
enjoy further great comments here, it's surely the timely discussion since more than half of IT investment doesn't achieve the expected result. I think beyond alligning IT investment with business strategy closely, step to step scenario, the Agile methodology could fit in today's fast changing environment, which means the IT need continue communicate with the user, end customers frequently, faster delivery cycle should improve effectiveness, also, when we plan every project, not only need consider the potential positive effect for business, but also the side-effect: such as: complexity, the trend., etc. since every project is also the process optimization project. thanks.
Root Causes of Project Investment Selection and Delivery Challenges
Lack of Business / IT Strategy Alignment
By creating business and IT strategies independently of each other, or attempting to integrate strategies solely at the enterprise level, companies run the risk of implementing IT projects that do not address the specific business needs identified in the business strategy. Decomposing high-level business strategies into specific business capabilities allows IT executives to understand how effectively the current applications/ infrastructure support the desired future state of the business. IT executives can use this information as input into their IT strategy, and ultimately as a source for identifying potential projects.
Paul / John - you make great points. I would like to point out that I am not anti-innovation and actually believe that IT has a duty to search out new opportunities. Let's face it, technology has the ability to provide game-changers that can invert a market place and provide significant competitive advantage.
However, this is moving away from the point of the article. Irrespective of how a technology has been identified, unless it gains an appropriate level of business involvement or ownership then it is highly likely to fail (the only exception to this might be infrastructure type projects).
I am not proposing bureaucracy, simply a common sense approach to getting business ownership. The end goal is that any new project aligns with an appropriate business strategy and delivers return on investment.
I'm all for structure, but it can often lead to the wrong people making the wrong decisions. Need to be careful that we don't over manage technology choice and impede innovation. Projects need to allow for x-factor as a best practice (i.e. something great to happen as a result of making strong decisions). Trying new things needs to be part of an IT budget and strategy. Not that defining innovation is easy. But innovation (tech, business process and otherwise) leads to competitive differentiation ... a key business outcome.
(note: I work on projects sponsored by EnterpriseCIOForum.com and HP)
A lot of this is common sense. You don't want to overly formalize the process to the point where it discourages innovation. At the same time, you don't want to bring in technology willy nilly. The one constant is the CIO listening to others in the C suite and supporting initiatives, goals and performance targets with technology. Martin, I am not a CIO and you are. Does what I am saying resonate with you? Can you give some examples of what gets you to tipping point where you would advise moving ahead with a technology project?
John - as you point out its always a balancing act. Wherever possible I would try to get the business directly involved, with the possible exception of pure infrastructure type projects. For example, upgrading an e-mail system, but even then you need their buy-in to the investment.
Some people might suggest that something like implementing Sharepoint should be a technology project, however, I subscribe to the view that it is a lot easier to get funding for these types of projects when you can find a suitable initial project to justify it. If you can make that approach work then great.
Sometimes though, you have to go with your instincts and implement as a technology project. Taking Sharepoint as the example, there is strong evidence to support increased productivity and collaboration driving efficiencies, however, it is almost entirely soft savings and near impossible to justify on a pure ROI basis.
Indeed!
But I have still to ask why the CIO and underlings can't be charged with finding new technologies that will truly benefit their enterprise? There's a very retro and anti-innovation sentiment this "technology not for technology sake" mantra we seem to be reciting. I like the notion of smart technology adoption. My feeling is that if a CIO does a poor job of communicating "no tech for tech's sake," then no one will come forward with valuable new technologies. If trying a new technology on even a limited scale is overly burdensome, won't innovation be snuffed out?
Articulating the role of "IT" within an organization is often a key imperative of many IT departments - something that must be clarified, discussed, and measured. If we contrast this context with other functional areas of the business, such as finance/accounting, Marketing etc... do we find the same level of effort consumed for such imperatives? What dynamics make the IT department unique?
One key influence that comes to mind is the pace of change in ICT.
Increasing industrial competitiveness pressures compel organizations to seek a constant stream of organizational (including technical) change that fosters differentiated, and/or cost advantage. The counterforce to this trend are organizational forces that attempt to keep the organization stable. Within all parts of the organization, these two forces react, thus achieving an equilibrium that is unique to the organizational configuration (including culture) and industrial context.
Therefore, the IT department is burdened (as all departments are) with the role of being both change agent and stability agent. But since the pace of "potential change" is arguably much greater in the ICT world, the problem of achieving this balance maybe more acute.
Could it be that a mature organization (with an IT department clearly defined as a functional unit with vetted functional strategies) that the tail still wags the dog? Not doing so would seem to be an abdication of the IT department to be a force of change. IT being one of the key area in which industry change is enabled (the level of which varies by industry type) - can an organization where the "tail" doesn't "wag the dog", at least a little, be an industry leader?
Hello Martin,
I think that the key here is partnership. Other than decisions on infrastructure-related items which may largely be invisible to folks outside of IT, I believe that all technology decisions should arise from a partnership between IT and the relevant business areas with the clear focus on solving a real problem that everyone agrees exists and for which success can be measured. Anytime one has one party, regardless of whether it is the IT organization or a business unit, unilaterally pushing a technology solution, the end result is unhealthy competition. The key to success I believe is agreeing on the problem to be solved, what success looks like, and then looking for the best solution to get there.
I mean, really, do companies implement technology for technology's sake, anymore? I can understand implenting a new technology and it does work out. Is that what we are talking about? But it's hard to imagine that in these days of scarce resources and intense measurement that a new technology gets implemented without intense scrutiny.
John,
Technology for technology's sake is not what I was referring to.
When I talk about partnership as a critical success factor, I am referring to shared responsibility for the problem definition, what success looks like and how that success will be measured. Surprisingly few projects ever have the promised benefits actually measured.
Peter Weill and Jeanne Ross at MIT have done some of the best work I have seen on the subject of IT governance among high-performing companies. Their book on IT governance is a must read for CIOs. It is really the governance process that, when well designed and executed, leads to both good technology implementation decisions and realization of the promised benefits.
Coincidently, this morning I happened to read Mark McDonald's blog post titled "There are no IT projects, only business projects" which complements this discussion nicely.
Good stuff, Joel. The IT governance book got superlative reviews on Amazon and Gartner EVP Mark McDonald's blog post title says it all. He lays out his premise pretty clearly in that post.
Hi Martin,
In the attached graphic, does each stage produce the next? I was wondering if you could elaborate on the each stage in the graphic. Do projects, for instance, result in process change. And what is meant by technology enablers? I assume the graphic expresses what you meant by a structured approach. And perhaps you elaborate on the benefits of this particular approach. Good stuff.
As requested - here is a little more detail on what I was referring to: an end to end process that hopefully helps to make your key IT projects more strategic. I would be interested in people's feedback on this approach.
1. Business Strategy - a good start point for this discussion is the companies business strategies.
2. Initiatives - most companies will break a business strategy into a series of initiatives.
3. Projects - each initiative will then break down into one or more projects.
So for example, a business strategy of growing revenue could be broken down into initiatives to develop new sales opportunities and to launch new products. This could then lead to various projects for sales initiatives, product development etc. From a process and IT perspective we should then be looking at how these strategies need to be supported, so for example, there may be a need for better Customer Relationship Management and Product Lifecycle Management.
The last two steps, 4. Process Change and 5. Technology Enablers, are simply saying that with any IT related project we should be improving and streamlining processes before we implement technology solutions.
As was commented previously, there is no such thing as IT projects, only business projects!
Hi, Martin, great post. Well, I think you well-articulate today's IT problem: one-way street--think IT project from IT's perspective, not only IT shuld take initiative to have two-way communication with business, even need chat with the customers, vendors, to expand the decison lens, if necessary, you may need shoot the tangle, to see from different angles.
Then, when you start the project, you need breakdown into the smaller projects, to communicate and measure the result timely and effectively.
In addition, I think IT may need educate the business with the latest technology potential, such as cloud, analytics etc. with common language such as CapEx vs. OpEx., KPI., etc before any initiative, it's the right timing and common understanding to lead the smooth road for IT investment. thanks.
