IT Departments, Here To Stay

InformationWeek asks "Will IT Departments Disappear By 2020?"

This question comes from Forrester Research which sees the commoditization of IT as eroding the base for the traditional IT function and roles.

As we move to cloud computing--apps and infrastructure, as well as continue the trend for outsourcing IT such as help desk, desk support, and more what will be left for the CIO and his or her team to do?

The article answers this question with another major trend--that of consumerization--"differentiating value and visibility among consumers and employees."

This is where IT can be highly strategic in serving those needs in the business that are truly unique and that enable them to be high performing and even outperform in the marketplace.

These ideas of commoditization and consumerization are anchored in Lawrence and Lorsch's business studies of integration and differentiation of organizations, where organizations need to find their ideal state for integration of subsystems--such as through cloud computing, data center integration, and shared services--and for differentiation, where organizations differentiate themselves to address the unique value they bring to their customers.

So even with commoditization of IT and integration of services, the IT function in organizations will not be going away, no more so than HR or Finance functions went away with Enterprise Resource Planning (ERP) solutions. 

The CIO and IT function will be able to leverage base enterprise services as commodities, but they will be expected more than ever to focus on and provide strategic solutions for their customers and give their organizations the real technology competitive advantage they are looking for and desperately need. 

This is what distinguishes a real CIO--one that provides strategic leadership in being user-centric and coming up with customer-oriented solutions that are not available anyplace else--from those managers that only help to keep the IT lights on. 

If you are not differentiating, you are not really engaging--so get out there with your customers and roll up your CIO sleeves. ;-)

(Source Photo: Andy Blumenthal)

IT Departments, Here To Stay

Getting Performance Metrics Right

Architecture and Governance Magazine, Volume 3, Issue 3 has a great piece on developing “Metrics that Matter”.

The idea is that metrics are a critical management tool for tracking, managing, and ultimately, changing organizational behavior!

All too often, organizations do not develop or keep metrics on anything below a top-level organizational view, and even then just develop metrics that either make them look good (i.e. the metrics are very achievable) or that are easy to measure (i.e. the measures are readily available from existing data).

Organizations cannot really drive improved performance if they do not measure systemically and strategically thoughout the enterprise!

For IT metrics, Architecture and Governance Magazine proposes that we use three core categories of metrics:

1. Strategic Value—The most difficult area to measure, but one of the most valuable from the business point of view; it “identifies the degree of a business unit’s effective use of technology,” to achieve mission execution and and results of operation.
2. Project Management Effectiveness—this should “cover the quality, scope, and milestones…includes schedule adherence, functional delivery requirement specifications, and—the least often measured—return on investment for several years after deployment.”
3. Operational Effectiveness (And Efficiency)—effectiveness, which is the more important metric, involves measuring such things as customer satisfaction, cost-savings, income generation, or ehanced mission capabilities; efficiency, on the other hand, is where IT leaders often “drown executives in operational data such as help-desk resolution times and network uptimes—data that is meaningless to the corporate strategy and cements IT’s reputation as being little more than a janitorial service for technical systems.” Additionally, “if they demonstrate only efficiency, they play into the bean-counter mentality that all that matters is extracting more efficiency from the system. That’s an easy road to continued cuts…‘this cost focus had led to the suboptimatization of IT’…[and] can even lead to the eventual outsourcing of IT.”

In general, emphasize the top 2 categories of measures, and focus only on the 3^rd “if the IT department has a history of failure and thus needs to be closely monitored on the basics.”

Finally, “a good rule of thumb is that there should be less than a half-dozen key metrics provided to executives…if they need more detail, provide the drill-down capabilities, but don’t make it part of the standard report.”

In User-centric EA, performance metrics are one of the primary perspectives of the enterprise architecture (which include performance, business, information, service, technology, security, — and human capital, in the future). The performance measurement view of EA is the pinnacle of the architecture, where we identify mission execution and results of operation goals and then track and manage to these. The performance measures cascade throughout the organization to build performance results, bottom-up, to achieve mission execution and the performance goals set at the highest levels.

Additionally, IT needs to take a front position (i.e. lead by example) in developing and managing to solid performance measures that not only demonstrate the effectiveness of its utility operations, but that demonstrates effective management of new IT investment dollars to bring new and enhanced capabilities to the end-users and most importantly, that it adds to the strategic results of the enterprise.

Getting Performance Metrics Right