Bad IT = Bad CEO?

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I've just been reading about the interview with HP CEO Mark Hurd at the Gartner Symposium. He said that when he hears top executives tell him that their IT is bad, his first reaction is that the real problem is probably a bad CEO. He was actually answering a broad question about the interplay between IT and business processes, and whether HP should be aiming its messages at CEOs focused on business outcomes or IT leaders focused (according to the question) on technology. An interesting question, and as the audience was predominantly CIOs, I can understand the inclination to push the blame elsewhere, but I feel the Bad IT = Bad CEO answer is way too simplistic.

Where I feel the answer actually lies is Bad IT = Bad Communication. By that I mean that  IT will never be good if the fundamental communication has not happened at a senior level to define what the company actually wants from IT, and how much they are prepared to pay for it.

Many years ago I read a book called The Myth of Excellence: Why Great Companies Never Try To Be The Best At Everything Apart from some very sensible stuff about what consumers really want - Consumers are fed up with all the fuss about "world-class performance" and "excellence", what they are aggressively demanding is recognition, respect, trust, fairness, and honesty - they also recommend that companies be excellent at one thing, e.g. service, differentiating on a second, e.g. availability, and be average on the rest, e.g. price, quality etc.

Now, for me that makes perfect sense for companies and for IT. If you wander into McDonalds you do not expect gourmet food, but you do expect it to be quick and cheap. If you go to buy a Rolls-Royce, you expect to be treated like royalty and you know it is going to cost you an arm and a leg. The problem I find in many companies is that the CEO asks for "Roll-Royce" IT, but is only prepared to pay "McDonalds" prices.

So, for me the starting point is actuallly agreeing just what this company's strategy is, which systems are vital to its survival, prioiritising the others, and making all of those work at the correct service levels. For this to work, the CIO must be reporting directly to the CEO, and must be able to hold conversations with finance, sales, marketing etc. to understand what their business requirements truly are, and communicate these to his/her people in IT. Everyone he/she talks to in the business will say they require 24x7 systems with instantaneous response. Not true. Ask why, and ask some brutal questions like:

  • If this system is down, is anyone's life or safety threatened?
  • If this sytem is down, how much money are we losing?
  • If  this system is down, is there an alternative, and how long can we run with it?
  • Do you truly need your people/customers to be online at 3am?
  • How much is this sytem worth to you?
  • Why is your system more important than anybody else's?
I was visiting an IT Manager in Germany some years back, who was being asked to provide 3 or 4 hours extra online service every day (the batch housekeeping cycle had grown so much over the years that it was taking too long). I asked him much those 3-4 hours were worth and he told me he didn't know, so I told him not  to bother as the business would perceive no benefit in his providing the solution, and hence would not sign off for the software he needed to buy. He left the room to ask his boss what the solution was worth and came back 15 minutes later. The bad news, his boss didn't know either; the good news, they were going to run a task force next week to find out. We returned at the end of that week to be told that the 3-4 hours were worth €20M a year. I grinned at him and said, "Great, the software only costs €19M!", which fortunatley he realised was a joke. It was actually way less than €1M and was signed off very rapidly as the business now could see the cost and the benefit.

That is what I mean by communication.  

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9 Comments

Right on Peter .... But it's more like Burger King because they want it there way ...lol

How fascinating that Peter uses The Myth of Excellece in his "diagnosis" {Bad CIO = Bad Communications}. Using the very same book, I observed a similar phenomenon in software development. The alarming data is that 64% of features/functions in a typical system are never/rarely used. Click http://tinyurl.com/8hkfcg for details.

Israel

Makes two of us, Peter... we both seem to have an allergic reaction to consumer underworld...

On a more serious note, I sincerely believe consumer underworld often applies to enterprise software and to business service management. Various topics that I write about in http://theagileexecutive.com/ are IMHO artifacts of this lamentable state of affairs. Technical debt might be the most prominent example.

Your thoughts?!

Israel

I will allow myself to add to the fun around technical debt. Click http://theagileexecutive.com/2009/09/30/sign-of-the-times/ to learn what happened as a result of my innocent use of the term...

Israel

I must admit - it is a love/hate relationship...

Israel

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This page contains a single entry by Peter Armstrong published on November 8, 2009 5:07 AM.

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