The secret to gaining a better understanding of your information technology

What in your business does not use information technology? Communication, access to your services, product creation, service delivery, operational processing, inventory, supply chain? All of it heavily uses information technology - telephone, websites, email, business systems, specialist applications. These days information technology is core to everything we do and the continued operations of our organisations.
Take even a primary industry, such as farming within New Zealand. On the farm technology is being used to track herd information, monitor animal health, provide up-to-date weight information, measure pasture growth, control how much fertiliser is applied, communicate with suppliers and sales channels, and the list goes on.

Given the prolific use of information technology within your organisation the question to ask is - does information technology hinder or help your organisation?

Equinox is a sponsor of the MIT Sloan Center for Information Systems Research (CISR).  The MIT CISR value framework (as shown) provides a framework for analysing the value ICT provides to an organisation.  Dr Peter Weill, chairman of CISR, recently spoke at an Equinox hosted event in Wellington and started his presentation by asking the audience three questions, which elaborate the above question:

1. Do you know the total cost of information technology in your organisation?
2. Do you think you are getting value from your spend on information technology?
3. Is the value received visible on your bottom line?

Executives within an organisation should be able to answer these questions, but often this is not the case. And it is little wonder given that information technology has changed considerably over the years and continues to change at a growing pace. One problem with information technology is ‘choice’. There is too much choice and within organisations that choice is being made by many different people at all levels of the organisation. From an individual’s perspective the choice they make is based on the impact to their area of responsibility. It makes their life better. No one is purposefully trying to slow an organisation down but that could be the effect as people do not understand the importance of their ‘small’ decisions and the broader or downstream impact of these decisions.

For example, think of the engineer that thought they would use free software to run the nightly batch system, because it was cheap and they didn’t want to have project delays. Two years later the process required 3 dedicated staff to support this small piece of software that was critical to completing customer orders, and that was all the staff did! Is this money well spent?

So lots of questions but what advice can we offer? There is no silver bullet as you know. But here are three suggestions to help you gain a better understanding of your information technology:

1. Transparency

Be transparent about all your information technology uses and needs. Find all those pockets of use across the organisation. This isn’t about centralising or controlling, but about transparency. Break down the functional structure and look at business capabilities (see separate article on business capability).

2. Governance

Put in place simple governance structures to ensure clarity of accountability and responsibility. Establish collaboration across your organisation with clear delegated authorities. Not just delegated financial authorities, but delegated decision making authorities. You probably already have them for some areas, so make sure they exist for information technology also. Governance does not need to be a constraint; it just needs to be more complete than simply financial governance, which is all that exists in many organisations today.

3. Metrics

Start measuring your information technology assets. There are a wealth of measures that can be tracked and reported, but I recommend keeping it simple when choosing your measures – ‘will the measure help me run my organisation?’ For example: trying to understand how many servers you have per person may not be a good measure in your organisation, but understanding duplicate functions across different systems OR understanding the amount of redundancy from over spec’d servers could be a better measure for the operations of your organisation.