In last month’s newsletter, I said that Information Technology (IT) is about people and change, and that software and hardware are just a means to an end. However, some of you are operating under the impression that the IT organization itself is just a means to an end. To use an analogy, some of you believe that the IT organization is like a chauffeur, whose job it is to:
- Drive the car to the destinations chosen by the passengers,
- Maintain the car in good working order,
- Keep up with changing routes, and occasionally suggest a different route to reach the destination faster.
If your IT organization has a chauffeur mentality, then its job is to:
- Move the company’s technology to a destination chosen by the company executives,
- Maintain the technology infrastructure in good working order,
- Keep up with changing technology, and occasionally suggest a different route to reach the destination faster.
You might ask, “Well, what’s wrong with that?” Here’s what’s wrong: it’s managing — not leading. If your IT organization has a chauffeur mentality, then:
1. The company is not able to get the maximum benefit from information technology. The chauffeur isn’t involved in picking the destination. Neither is the IT organization included in the process of picking the best places to apply technology in the company, even though the IT organization contains your technology experts. How is the CEO supposed to know the best use of technology for the company? He or she has other things on which to focus.
2. There is no coordination of technology decisions. The chauffeur isn’t involved in the choice of transportation—whether to use a car, bus, train, or plane, or a combination of all four. Neither is the IT organization involved in the choice of technology. Maybe the sales organization picks a CRM package (which may, for example, require a Wintel platform), and the production organization picks an ERP system (which may run best on Unix), and the human resources organization picks time reporting software. Then the IT organization is faced with the job of integrating the results of these divergent decisions: both the data integration and the hardware/software integration. Were they the right decisions? Maybe or maybe not, depending on whether the integration trade-offs were adequately factored into the technology choice process. Wouldn’t it have been better to make those trade-offs explicitly rather than by default?
3. The IT organization becomes a commodity, and is therefore easily subject to outsourcing. If you don’t have need of a full-time chauffeur, it’s easy to outsource to a limo service. There isn’t much of a downside to the outsourcing decision, as long as the limo service has reliable people who can follow directions. Similarly, outsourcing a “chauffeur mentality” IT organization doesn’t have much of a downside either. If IT just follows directions anyway, then why not outsource, either within the U.S., or off-shore? The risk is that when the company outsources IT, it gives up the ability to use IT strategically. Outsourcing IT may reduce cost, but it also greatly reduces the possibility of IT strategic benefit.
Is the CIO in your company a high-priced chauffeur? Then either replace the IT organization with the technology equivalent of a limo service, or get someone as CIO who can provide the technology advantage your company can use against its competition. If you’re a CIO, then you’re either strategic, or you’re gone.