IT Management

6 Reasons Businesses Fail at IT08 Oct

This is a blog about technology for the small and mid-sized business. So when I read a recent Harvard Business Review article about decisions IT executives should not be making, I had to comment. The article intends to say that well-meaning IT executives can’t possibly be responsible for the business impacts of their decisions. So they should stick to the technical details and let the rest of the executive suite worry about the success of the business.

I’m no Harvard MBA, but Ms. Ross and Mr. Weill have it all wrong. Companies that follow their advice are doomed to mediocre IT performance. Here are the six decisions they say are best left to non-IT execs, and why I think they’re off-base.

HBR: “How much should we spend on IT?”

Reality: Does the head of marketing decide how much to spend on accounting staff or tools? No. If your CIO or head of IT is not capable of understanding your business goals and planning a budget to meet those needs, then you’ve got the wrong person in that position.

HBR: “Which business processes should receive our IT dollars?”

Reality: It’s smart to selectively approve IT projects. But don’t forget that most IT funds are spent maintaining existing systems or on infrastructure requirements. Business executives forget about last year’s projects much less that project from 5 years ago.

HBR: “Which IT capabilities should be firmwide?”

Reality: This statement blatantly contradicts the author’s assertion that technical implementation details should be left to the IT execs. Again, if your CIO is not capable of understanding your business enough to develop an operational model that supports it, you need a new CIO.

HBR: “How good do our IT services need to be?”

Reality: The authors suggest to not let IT execs push for the “Cadillac” when a “Buick” is all that’s needed. Are you kidding me? Certainly all executives like to provide the best tools possible to their teams. But just try to imagine the CFO allowing the CIO or head of marketing to state how good the accounting services need to be!

HBR: “What security and privacy risks will we accept?”

Reality: Of the 6 points, this one is actually the most reasonable. The business needs to understand and accept the tradeoffs between convenience and security. But it’s the CIO’s responsibility to educate the business and help them find that balance. After all, the CIO is likely to be named in any HIPAA or Sarbanes-Oxley lawsuit!

HBR: “Whom do we blame if an IT initiative fails?”

Reality: If you’re thinking this way, it’s a bad sign for your business. Change your mindset now. You should be thinking, “How can I help ensure that IT initiatives helping me achieve my goals are a success.”

In the end, the HBR article fails to comprehend the true nature of IT’s role in the enterprise today. To be sure, there are companies who run their IT departments this way. But we know that companies that use IT strategically grow faster and are more profitable than those who don’t. Viewing the IT department as a cost center that needs to be tightly controlled by non-IT executives is certainly not a strategic way to do business.

One Response to “6 Reasons Businesses Fail at IT”

  1. Today’s businesses and Info Tech. | Pleasant Lifestyle

    [...] As a Software guy, I might be quoted as ‘bias’ towards this topic, but I completely agree with the author of granitepeaksys.com and the article posted as title ‘6 Reasons businesses Fail at IT‘. [...]

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