IT roles expand into business

IT does not matter. That was the conclusion of Nicholas Carr in a hotly debated article in the Harvard Business Review in 2003. His proposition was that IT is now a commodity, similar to railways and electricity.

Carr had a point in the case of desktop PCs and mobile phones. Yet there has been a significant difference in outcomes from firms that implement high-value tools, like enterprise resource planning software.

What is it that makes the difference between success and failure in IT projects? As IT hardware and software become more commoditised, the people involved with the acquisition and use of technology become the differentiating factor.

But providing commodity services is a capability that itself becomes commoditised, in which case it can be outsourced to those who provide it at lower cost. Purely technical skills are no longer sufficient.

So is this the end of the IT department as we know it? Will all resources gravitate toward major suppliers who can provide huge economies of scale? If so, should chief information officers (CIOs) be hired as super-purchasers of proven technologies and applications?

There are a few stable organisations with standard systems for which this may be an appropriate strategy. For many others it will not be a good choice, particularly those who operate in a high-change environment with systems tailored to their business processes. How does a CIO build a team of IT people that will succeed in these circumstances?

A mix of skills is required. Past research has focused on three categories: business, technical and personal. But in working with CIOs, Henley Management College identified two additional categories of professional skills – business and professionalism.

CIOs who want to build effective business relationships need to appoint staff with competence in each of the five skills areas, with particular strengths in the business and interpersonal categories.

Successful CIOs say that if the core IT services do not work effectively, they will have no credibility discussing strategy in the boardroom. Similarly, if they cannot deliver specific IT systems within time and budget, there will be little opportunity to drive business change. A competent IT manager will develop these core capabilities over time by ensuring they have the right mix of technical and professional skills in their team.

If a company only values technical skills linked to supplier technologies, it can face migration problems when there is a substantial business or technology shift.

In contrast, skilled professionals will know how to implement an integrated application package or manage a database rather than just the key parameters in SAP or Oracle. Their broad knowledge will make it easier to understand new technologies.

Management skills are clearly vital for staff direction and task delivery. Providing leadership to IT professionals requires insights into their motivations and an understanding that their profiles are often different to those of their business colleagues. Increasingly, CIOs are seeing the value of professional project managers who know how to apply methodologies such as Prince 2 and service managers who can implement best practice ITIL (IT Infrastructure Library) processes.

Will an IT professional who gets on top of all this become the CIO? Not unless they can demonstrate some other key skills. Many projects are defined so badly that they are practically set up to fail. IT professionals succeed by having strong engineering skills and a focus on solutions. This is great in the delivery phase but it can be a real barrier when defining the business need. Here, there is often ambiguity of business requirements and conflicts between multiple stakeholders.

Business and interpersonal skills are needed to navigate through this minefield. Business skills in this context include business process knowledge with an ability to relate this to the language and practices in the org anisation. Allied to strong communication and influencing skills, this will enable staff to liaise effectively with key stakeholders. Accepting the status quo is not good enough. Also needed is an ability to articulate new capabilities formed from creative combinations of people, processes and technology.

But creative vision, combined with strong business and stakeholder management skills, does not sit well with a professional and disciplined solutions focus. How many production managers make great sales people?

CIOs know they must operate successfully in an environment in which technology enables change, so what selection criteria can they use for staff given this dilemma?

One option is to select staff from business functions to act as the front-line interface of the IT department. For this to be effective, they need to be highly knowledgeable and respected in their group and able to communicate with the IT specialists. They also need to be good analysts.

Existing managers will not be rushing to transfer these individuals, but secondments as part of career development may gain support and will test if the transition can be made successfully.

Another option is to pick the most articulate, engaging and business-oriented of the IT staff to perform these roles. Perhaps they have an MBA qualification or prior operational experience. This poses a big challenge to those staff to let go of some of their technical knowledge to focus on the business areas. Stepping outside the comfort zone is not easy. Here too, a trial period in the new role may confirm suitability.

Companies that select internal candidates should be prepared to invest in skills development, such as the methodology of IT-enabled change or stakeholder analysis. If in-house routes do not generate enough candidates, external recruitment will enable CIOs to cast a wider net.

Consultants will typically have good interpersonal skills and have gained exposure to multiple business and IT environments. Ideally they will also have experience of dealing with the issues involved in longer-term infrastructure and relationships. Even with this capability it will take time for them to build the knowledge of processes, technology and culture to succeed in a new organisation.

There is a further difficulty: as one CIO recently put it, these people are both ‘scarce and expensive’. Be prepared to open your cheque book.

Which of these three sources is most likely to be preferred in creating IT roles? Yell Information Services found that successful business relationships need to be built on a strong service and systems delivery foundation – see case study, below.

The Metropolitan Police Service invested in creating business liaison managers. Steve Farquharson, now group director of information management, led the professional development of this group.

‘Historically, people could operate in an IT department with no real understanding of the business because the focus was on technical staff delivering technical outcomes,’ he says.

‘To provide effective solutions we needed to communicate in the language of policing rather than the language of technology. Having police officer champions was crucial to achieving this.’

After launching this function, relationships between IT and the rest of the organisation improved, says Farquharson.

‘We were seen to be part of the business rather than a separate IT supplier. With this new capability, we became a partner in defining the opportunity for information-enabled business change. Also, if we were not able to meet a particular request, this communication was done from a platform of credibility and trust’.

Managing and exploiting IT becomes easier if it follows from engaging the business. The bottom line is that building a full capability for IT-enabled change is a key success factor for any CIO. More companies are seeking CIOs who combine IT and business change skills. Standing still is not a viable option. cb

Dr Sharm Manwani works with CIOs at Henley Management College. If you are interested in participating in an IT-Enabled Change forum, you can contact him at sharm.manwani@henleymc.ac.uk

Case Study: Yell - Effective relationships between IT staff and business colleagues are essential to success

Yell, a FTSE 100 company, operates in the classified advertising market. Its UK products include Yellow Pages, Yell.com and the 118-24/7 telephone service. Yell is committed to continuous improvement to maintain its industry leadership. That means responding rapidly and flexibly to changing market conditions, supported by best-practice benchmarking.

Between 1999 and 2001, Phil Ives, head of information services at Yell, built a high-performance IT infrastructure. Yell’s adoption of ITIL industry standard processes and benchmarked best-in-class availability levels led to certification to the BS15000 IT service management standard.

In 2001, a business re-engineering programme was launched requiring the replacement of legacy systems with SAP. External consultants brought in new technical skills to support the implementation, which achieved target benefits without business disruption.

The period between 2003 and 2005 saw a significant investment in professional capability, including BCS certification for the Test Centre and Project Office. SAP skills were brought in-house using a skills transfer programme and senior staff were given consultancy training.

The SAP implementation demonstrated that effective relationships with business colleagues are critical. Ives took this a stage further by appointing high-profile business solution managers (BSMs) who provide proposals for evaluation by the business prioritisation group.

BSMs act in multiple roles as account managers, business analysts, solution architects and, where needed, as programme managers.

‘I had a one-line job specification for the BSMs – sense and anticipate demand,’ says Ives.

‘This needed strong business knowledge, influencing skills, commercial aptitude and a broad technical competence. These skills are scarce and the assessment needs to be brutal. We had to source most of the positions externally. It was vital that a BSM achieve credibility early on. Although our selection criteria were rigorous, I had to make some switches to get the relationships working.’

Yell has recognised the need to build a balanced evolution of the five skills areas – management, business, interpersonal, technical and professional. The IT team’s ability to deliver business value led to it receiving the Computing Awards for Excellence IT Department of the Year for 2004.