Power politics and the IT project

Power politics and the IT project

Author:

Ron Condon

Posted:

17:05 14 Jan 2008

Who calls the shots when it comes to starting new IT projects in your organisation?

Does the IT department come up with all the good ideas and then get the company management to rubber-stamp them? Does the IT department just wait to hear what the company wants, and then meekly try to deliver it? Or is the IT department tightly integrated in the corporate decision-making process, consulted on difficult matters, and generally seen as a vital partner to the rest of the company?

If you can honestly answer that you fall into the last of the three categories, then read no further, because this article has nothing to teach you.

However, despite all the talk we hear about aligning IT with company strategy, it seems that in many companies IT still ends up as the dog's-body of the organisation. It is asked to perform miracles against impossible timescales, and then becomes a convenient scapegoat when things go wrong.

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One man who has studied the problem is Michael Gentle, a solutions architect with Compuware. He says the rot started to set in when IT departments became service departments whose function is merely to deliver what the company asks for, on time, on budget and to specification.

"The client/supplier relationship turns IT into an order-taker, so the emphasis is on doing the project right, not on doing the right project.

"That would not be bad if upstream there were a rational decision-making process. But this is not the case. Investment decisions are usually made on the basis of executive influence," he says.

And by executive influence he means it is decided by who shouts loudest (what he calls "decibel management") or is prompted by what the chief executive has read in a business magazine or newspaper.

"Far from being the rational and structured process we would like it to be, demand management is a nebulous combination of decibel management and organisational politics," he says.

Gentle says he has observed this in a variety of industries, and bears the "scars and stripes" of real experience to prove it.

The trouble with the IT department acting as a supplier to the business, is that it has little incentive to go beyond the specification that it is given.

The rapid pace of technological change also adds to the problem, because companies are tempted to try them out before they are mature.

Gentle is critical of the return on investment (ROI) exercises that take place to justify going ahead with IT projects. "The business case for IT is subjective, it is in the eye of the beholder. Every new project is new, so the benefits tend to be over-estimated, while costs are under-estimated," he says.

"There is no requirement to monitor the benefits over the lifecycle of the application.

The ROI is just used to launch the project. Once it is launched, then the business case is shelved."

The answer, he says, is for IT to become a strategic partner or trusted adviser of the business, not just an order-taker. Gentle says bringing about such a change to the business can be "a tall order".

But if IT can become a strategic partner, there can be instant consequences. Instead of just delivering to time, budget and specification, the IT department can share risk and rewards. The business can provide the IT department with an incentive to ensure the project continues to deliver after the system is launched.

"IT should not sit in its corner and wait for requests to come. It should engage with the business, using account managers, client managers, business-relationship managers - whatever you want to call them - to manage the relationship with the operational department," he says.

"So if you are in charge of sales and marketing systems, for instance, you do not just sit back and wait to be asked. You have regular meetings to understand what their business objectives are, challenge what they want IT to do, and propose alternatives. In short, arrive at a joint decision about which project requests are going to be funded. That is a trusted adviser status."

Decisions also need to be taken out of the CEO's hands, if that is possible. A proper investment committee, consisting of both IT and business managers, can properly assess each new proposal in a more rational way, and since risks are shared, both sides have an incentive to make it a success. Each project is scored by cost, benefit and risk.

Gentle also recommends a portfolio management approach to new projects. This means seeing individual projects not in isolation, but in context with other systems, and categorising them against different business goals - such as cost reduction, revenue generation, or regulatory compliance. That implies a far more rational advisory role for IT in helping to set priorities and ensure projects happen in the most logical way.

And finally, he says projects need to be subject to continuous performance monitoring. "At the moment, the business case is used to launch the project then it is forgotten," says Gentle. "But the business case shifts all the time - you have to monitor the benefits as well as the costs. If you find an application is not delivering benefits, you stop it and kick off something more promising."

If the IT department is in a client-supplier relationship with the rest of the business, and you decide to stop a project, he says, then it means someone made a mistake, and their head has to roll.

So how do companies match up to Gentle's vision? All companies have their own slant on IT and do things differently, and much depends on the style and type of organisation involved.

For instance, at Scottish law firm MacRoberts, IT director David Murphy has a fairly free hand to launch new projects as he sees fit. He supports around 270 desktops at two sites in Glasgow and Edinburgh, and has an IT department of eight people.

But, as he says, the sole concern of the fee-earners in the firm is to have their systems up and running and to be able to get at information when they need it.

He has introduced Blackberries to allow users to receive e-mail remotely and says this will be extended to let them access company files as well.

"Most of the ideas come from IT, but we also have a lot of smart lawyers too who talk to their peers. The trick for us is to stay ahead of the game, so that we can tell them what is good and bad about some of the ideas they bring to us."

The situation can be quite different in the public-sector. At Hampshire County Council head of IT Jos Creese and his team are required to help meet public demand for more interactive and joined-up services, but with static or shrinking budgets.

"In a typical year we will deliver over 200 projects, and we are increasingly looking closely at whether or not those projects individually are delivering the maximum possible value, not just meeting the typical project measures of 'time, quality and budget' targets.

"Benchmarking with the public and private sector, for example, has not shown any organisation with a lower cost base for basic desktop IT services than we are delivering. We are also adopting ITIL on the basis that a repeatable and consistent way of doing things will increase productivity and performance," says Creese.

IT and the business work together on assessing benefits and cost, he says.

"All projects should be considered in the first place as business projects with an appropriate assessment of costs and benefits - indirect and direct. Where judgments need to be made about the unquantifiable benefits, this should be done openly and transparently and judged on a business, not a technology basis. ROI more often than not needs to be harvested corporately not in individual service teams, requiring a considered approach to business change across the organisation."

That kind of close working requires skills that may not be in abundance in many IT departments. As Michael Gentle says, IT needs people to act as account managers who can work with the individual business departments and help to interpret and manage their demands.

And once a project is approved, a competent project manager needs to be found, which is not always easy, according to Ian Campbell, chairman of the Corporate IT Forum and head of IT at British Energy.

"People with those skills are few and far between," he says. "Project management can be complex and wide-ranging with lots of parallel work-streams going on. You need to know how to ask the right questions, make the right forecasts and get the plans right, in order to make the overall programme come together properly. That is why you see a lot of this going out to the consultancies because they are used to doing a lot of project-based work."

Campbell says the other big challenge for IT is managing the demands of the business, especially where a go-live deadline is set from the start.

"There is a disproportionate emphasis placed on launch dates. People set a date for a project, and that can take precedence over everything else, meaning that other things can be compromised. If you allow it to go live on the date but not when it is ready, then the project is tarnished," he says.

Again, this comes back to good project management, and skilled forecasting and continuous review during the course of the project, to ensure it stays on track.

As he says, "Boring is good in project management - it needs to be well organised. You do not want to have to call in the Red Adairs at the last minute to rescue you."