Building IT Leadership: Revisiting Key Issues
Presenter:
Leslie WillcocksProfessor of Technology Work
And GlobalizationLondon School of Economics and Political Science
email: [email protected]
BCS London May 17th 2007
(C) Leslie Willcocks, 2007
Does IT Matter?
Carr, N., "IT Doesn't Matter," Harvard Business Review, Vol. 81, 5, May 2003, pp. 41-49. Friedman, Thomas, The World is Flat, Farrar, Strauss, and Giroux, New York, 2005, pages 3 to 172
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Nicholas Carr: Does IT Matter? Harvard Bus. School Press, 2004
• IT is just a commodity:
“IT is an infrastructure technology like the steam engine, railroad, telegraph, telephone”
• IT is no longer a source of competitive advantage:
“The core functions of IT—data storage, data processing, and data transport—have become available and affordable to all.”
(C) Leslie Willcocks, 2007
Nicholas Carr: Does IT Matter? Harvard Bus. School Press, 2004
• Spend less. Studies show that the companies with the biggest IT investments rarely post the best financial results.
• Follow, don't lead. Moore's Law guarantees that the longer you wait to make an IT purchase, the more you'll get for your money.
• Focus on vulnerabilities, not opportunities. Even a brief disruption in the availability of the technology can be devastating.
(C) Leslie Willcocks, 2007
Friedman: The Ten Flatteners
Platform Building• 11/9/89 (PC revolution: Windows)• 8/9/95 (Internet Revolution: Netscape goes public)• Work Flow Software (application protocols let computers talk to computers)• Open-sourcing (Best software is available to everyone) Platform Use• Outsourcing (global sourcing of knowledge work)• Offshoring (moving facilities to cheapest location lowers prices, stimulates the economy)7. Supply-Chaining (eating sushi in Arkansas)8. Insourcing (allows small firms to act big)9. In-forming (Google, Yahoo, MSN) Platform Enhancement
10. The Steroids
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Key Issues For IT Executives - 2006-7
Top Ten Management Concerns:1. IT and Business Alignment2. Attracting, Developing and Retaining IT Professionals3. Security and Privacy4. IT Strategic Planning5. Project management capability 6. Introducing Rapid Business Solutions7. Speed and Agility (new to top ten)8. True Return on Individual IT Investments 9. Measuring The Value of IT Investments10. IT Governance
Note: - 70% organisations are Maturity 2/3 on alignment (out of 5)
See Luftman et al. (2006) MISQE Key Issues for IT Executives for earlier surveys
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2006 2005 2004
Delivering projects that enable business growth 1 1 18
Linking business and IT strategies and plans 2 2 4
Building business skills in the IS organization 3 9 1
Demonstrating the business value of IT 4 3 2
Attracting, developing, and retaining IS personnel 5 * *
Applying metrics to the IS organization and IT services 6 4 14
Improving the quality of IS service delivery 7 7 3
Flexible technology infrastructure 8 * *
Improving IT governance 9 10 11
Consolidating the IS organization and operations 10 8 **
2006 CIO Strategic Management Priorities
* New question for 2006** New question for 2005
To what extent will each of the following CIO actions be a priority for you in 2006?
Ranking
Source: 2006 Gartner EXP CIO Survey
43
6
1
5
8
2
11
9
10
7 -Reducing IS complexity
x = Retail (58 CIOs)
6
x = Telco (29 CIOs)
Improving Business Continuity Planning. -
152
12
1
9
8
3
7
5
4
Moving to a service-based org. - 10
(C) Leslie Willcocks, 2007
Key Issues: Some Food For Thought...
1. Technology2. Strategy3. People4. Structure 5. Governance 6. Eight IT Differentiators
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Top Six Application and Technology Developments:1. Web services (new to top 6)2. Business Intelligence3. Security Technologies4. Business Process Management (new to top six)5. Customer Portals (new to top 6)6. Systems Integration
Key Issues For IT Executives 2006-7
Other: SOAXMLEAI/MCorporate performance mmt.CRM
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IT Hype
IT Capability
'Useful' IT
'Strategic' IT
Willcocks, Feeny, et al 1997
Four Domains of IT
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Key Issues: Some Food For Thought...
1. Technology2. Strategy3. People4. Structure 5. Governance 6. Eight IT Differentiators
(C) Leslie Willcocks, 2007
IT/IS Strategy Formulation:A Multiple Methodology
Business plans and Goals
Current System IT Opportunities
Mandatory Strategic Development Infrastructure Renewal Maintenance R&D
Strategic Application Plan
AnalyticalMethodology
Opportunities, Threats
‘Listen to the Technology’
Teamwork
Evaluative
Surveys & Audits
Strengths Weaknesses
Users & Specialists
Creative
Techniques, Processes & Environment
Examples Scenarios
Bright Sparks & Product Champions
‘Top Down’ ‘Bottom Up’ ‘Outside-In’
Source: Earl, 1996
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Strategic IT Sourcing (Willcocks et al, 2002)
Contribution to Business Operations
Contribution to Competitive Positioning/Core Competence
CriticalCritical
UsefulUseful
CommodityCommodity DifferentiatorDifferentiator
‘Qualifiers’
‘Necessary Evils’
‘Order Winners’
‘Distractions’
(Best-source:In-House/Partner)
(In-House/Buy-In)
(Outsource) (Migrate or Eliminate)
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The Role of Organisational Architecture
Organizational Architect- creates options (scenarios) - converts set of options into organizational requirements- assesses level of change required- helps refine vision- identifies organization design for vision- helps refine technology architecture
Board/CEO/
Inner Circle
IT Architects
Visions refined through informed dialogue
IT architecturerefined throughinformed dialogue
Actionable vision- organization design- technology platform
Source: Sauer and Willcocks 2002
(C) Leslie Willcocks, 2007
Key Issues: Some Food For Thought...
1. Technology2. Strategy3. People4. Structure 5. Governance 6. Eight IT Differentiators
(C) Leslie Willcocks, 2007
CEO’s Attitude to ITCEO’s Attitude to IT
• IT Vision to Transform
Top ManagementTop Management Team ProcessTeam Process
• Personal/Informal Culture• ‘Away Day’ Workshops
CIO’s Personal ProfileCIO’s Personal Profile
• IT Knowledge/Experience• Business Loyalty/Focus• Goal Seeking BUT ALSO• Consultative Leadership• Ideas Oriented
CIO’s Position in CIO’s Position in OrganisationOrganisation
• Member of Top Management Team
ExcellentExcellentRelationshipsRelationships
Source: Earl and Feeny, 2000
(C) Leslie Willcocks, 2007
Business and Function Vision
Delivery of Service Architecture
Planning and Design
Business SystemsThinking
ContractFacilitation
TechnicalArchitecture
ContractMonitoring
VendorDevelopment
Making Process-IT work
RelationshipBuilder IS
Leadership;InformedBuying
Nine Core Back-office CapabilitiesRetained Core IT Capabilities
(C) Leslie Willcocks, 2007
Key Issues: Some Food For Thought...
1. Technology2. Strategy3. People4. Structure and Governance 5. Eight IT Differentiators
(C) Leslie Willcocks, 2007
The IT Function: Enormous Pressure to Change
•Value for Money•Quality, Service•Time•Compliance•Social and Green Resps.
More knowledgeable
AND demanding users
UserPressures ?IT
TechnologyChallenges
Businessand external
Pressures
•Diversity•Distribution, Integration•Packages•Emerging technologies•Etc.
IT Service Suppliers
ExistingSystems
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Six Models of IT Organisation
1 Corporate Service
2 Decentralised
3 Internal Bureauand
4 Business Venture
5 Federal
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Six Models of IT Organisation
6a Outsourced: Corporate Service
6b Outsourced: Federal
supplier
supplier
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Governance Defined
“IT governance—specifying the framework for decision rights and accountabilities to encourage desirable behaviour in the use of IT.” –Weill, MISQE, 2004
• Decision rights and inputs• Desirable behaviour e.g sharing, reuse, cost savings, innovation, growth• Mechanisms – IT council, architecture office, SLAS…• Business value – responsibilities, accountabilities, metrics…
(C) Leslie Willcocks, 2007
Stronger IT Governance Is Needed:
• IT has become more important, but less under ‘control’ of the IT function
• Firms face major new opportunities and risks as IT migrates outside the IT department
• Complexity and ‘rogue’ behaviour need to be managed
• Links to, and learning from, corporate governance
• Top IT performers govern IT differently depending on objectives – asset usage, revenue growth, flexibility, ROA/profits
• The business must help by:
– Understanding what is possible, and not possible, in IT
– Providing more explicit direction on the business approach and priorities
– Disciplining its own behaviour, cooperating more
– Addressing complexity head on
– Being engaged in its IT governance and management responsibilities
– Making some uncomfortable choices e.g on shared services/applications…..
(C) Leslie Willcocks, 2007
Important IT Governance Concepts
• IT Principles – Clarifying the business role of IT• IT Architecture – Defining integration and
standardisation requirements• IT Infrastructure – Determining shared and enabling
services• Business Application Needs – Specifying the
business need for purchased or internally developed IT applications
• IT Investment and Prioritization – Choosing which initiatives to fund and how much to spend
Weill and Ross, 2004
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Summary: Eight I.T. Differentiators
• Listen to the technology; be informed by globalization dynamics (Friedman, 2005: Moscella, 1997, 2004)
• IT governed as a strategic portfolio by relevant stakeholders (Willcocks et al. 2003: Weill and Ross, 2005)
• IT led by a credible CIO, influential amongst senior business execs. including CEO (Feeny and Ross, 2000)
• Disciplined mixed sourcing strategy, management, and delivery regime (Cullen and Willcocks, 2004: Willcocks and Lacity, 2006
• Business maturity to manage IT as a strategic resource (Willcocks et al. 1997; Broadbent et al. 2005)
• Retain specific key IT capabilities (Willcocks and Lacity 2006) • Ensure key supplier capabilities (Feeny et al., 2005)
• Core organizational project management capability (Willcocks et al., 2003)
EnsureValue for IT
Spend
to
(C) Leslie Willcocks, 2007
USEFUL REFERENCES
1. Willcocks, L. et al. (2003) Making IT Count: Strategy, Delivery and Infrastructure. Butterworth-Heinemann 2. Willcocks, L. and Lacity, M. (2007) Global Sourcing of Business and IT Services. Palgrave, London 3. Sauer, C. and Willcocks, L. (2002) Evolution of the Organizational Architect. Sloan Management Review, April.4. Weill, P. and Ross, J. (2004) IT Governance. Harvard Business Press, Boston5. Willcocks, L. et al. (1997) Managing IT As A Strategic Resource. McGraw Hill, Maidenhead6. Earl and Feeny (2000) How to be a CEO in an Information Age, . Sloan Management Review, Winter