IT organizations delinquent at measuring and communicating the value of the services they deliver are doomed. We need to get better at transparency.
While I was interviewing for a job about 10 years ago, it became apparent that there was an incredible lack of discipline at that IT organization. Applications were deployed on the platform-of-the-day. No standards or strategy were apparent, and every question I asked about performance metrics was answered with, "We don't track that." In what was probably not my smoothest move ever, I said something like, "Good Lord, this place is a plum ripe for outsourcing."
Obviously, I didn't get the job. But that IT organization did get outsourced within the year.
Responsible top-level executives of yesteryear demanded some level of strategy, performance metrics, and accountability, but they were often clueless about the actual technology and were grateful for IT leaders who could bridge the gap between business and pure tech. So IT leaders who weren't complete train wrecks generally got left alone. Not so today. In the past few years, we've seen a new generation of business leaders who are actually reasonably savvy about technology.
At the same time, those business leaders who understand the externals of IT still don't really understand the internal operations side of things, because they haven't spent their careers in IT. These leaders are increasingly more difficult to satisfy. In a reversal of the past, the recent spate of easy-to-use consumer technologies has lured everyone into thinking that there's an IT "easy button."
Nothing, of course, could be further from the truth. Enterprise IT is hard. You don't have the same economies of scale that consumer tech companies do. Sony and Apple have millions of end users; you have hundreds, thousands, or tens of thousands. In contrast to consumer services, you're rarely asked to do something where failure is an acceptable option. While other business units have the concrete inevitability of "more customers equals more revenue," your "more with less" world isn't so certain. And you have to spend so much time and effort on legacy systems that you can't spend the time you want on new, innovative systems.
You're doing this in an environment of reduced headcount, too. During the economic downturn, companies relied on IT for additional automation to shrink needed labor, but of course they didn't exempt IT from the position freezes. Yet as times get better and work volumes head up, nobody's inviting you to hire. Indeed, some of these consumer-tech-savvy business leaders may be thinking, "What do you IT people do all day?"
And that's the problem. They don't know what you do, or they don't know what you do in a meaningful way. And if they don't know what you do--what it costs per transaction, and how it's competitive with external enterprise offerings--the inclination is to do a side-by-side comparison of Flickr with your enterprise applications. And the inclination is to do a side-by-side comparison of the Geek Squad's hourly rates with your multimillion-dollar personnel budget. In other words, the inclination, absent regular communications to the contrary, is to compare apples with oranges.
To be fair, there's a certain amount of communication with customers that many folks do well in the world of IT service management. Some of us share work order volumes, show which business units consume which percentage of IT services. Heck, some of us go to the trouble of formally distributing quarterly or annual reports. (Indeed, our InformationWeek Analytics IT Service Assurance survey found that 46% of organizations engage in some level of regular reporting.) But in the instant gratification, easy button world of consumer technology, that's just not good enough anymore.
This inaugural episode of Business Matters explores the subject of leadership with former Air Force Brigadier General John Michel, the Chief Strategy & Innovation Officer and President of MV International.