IT Systems Aren’t Evaluated by Takeover Artists?
Having been in the technology-enablement-of-business-processes industry for over 20 years I’m still amazed that the value of excellent IT systems and underlying data is not recognized. The latest example of this is in CFO magazine’s article on new software and services that help companies assess the IT assets of acquisition targets. Bruce Richardson of AMR revealed that “IT systems are the last things managers focus on” largely because of the time it takes to evaluate IT assets.
Lack of evaluation leads to lack of understanding that bad underlying data creates information and reports that mislead acquiring companies. I go back to a manufacturing example where bills of material have to be 100% correct in order to use planning technology properly. The reason is that one wrong bill of material can provide wrong planning in many areas. Even after explaining this problem, with examples, people would ask if 95% data accuracy was good enough.
So, it is not only the IT system functionality that must be assessed but the quality of the data going into the systems. The good news is that companies like Patni, Oco and others are developing software solutions to eliminate this “blind spot”. Are you considering an acquisition without evaluating the IT systems and underlying data of your target? Do you have an experience where a bad system or data resulted in misleading evaluation information?
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Bob,
Sometimes I think you write these posts with me in mind! Data Stewardship, or the concept of an integrated approach to information management shared by IT and the related business units is a practice that is very misunderstood.
Many managers use the analogy of managing IT being like a car engine, and that in order to drive the car you do not have to know how the engine operates. I think a more appropriate analogy is that managing IT is like being an airline pilot, where critical system malfunctions affect you directly and can crash the plane. Therefore you need to have an intimate understanding of key measures.
When done properly, IT will represent the health of a business as it captures what is represented in points of time. Most people’s knowledge can be related to incidences that are recorded in reports, databases. Data Stewardship can actively set the performance and service levels for the data, and allow for an objective of “95% is appropriate to our business.”
Great post!!
Interesting that we both share the need to bridge the gap given our experience and perspectives. So- I am writing with your perspective in mind! Data stewardship is great concept.
Let’s hope that it doesn’t take them as long to notice IT systems as it did to recognize the existance and importance of company culture.
Culture is an interesting one and seems to have a lot to do with success of IT projects. My limited experience with outside groups, like acquirers, looking in is with angel funding. They seemed very interested in who the people are, whether they can work well together, whether or not they can manage a larger operation. These were small entities where, I’m guessing, culture is not as complex. How do you define culture in a medium size (200M, 700-800 person) organization? Is it different from a smaller or larger organization?
I think culture is the same in any size organization and it sparks from the MAP (minset, attitude, philosophy™) of the CEO. The smaller the organization the purer the culture, e.g., the initial people in a startup are friends and friends-of-friends and by definition they usually have similar MAP.
If care isn’t taken as the company grows the culture, like religion, is reinterpreted and possibly distorted by new managers.
The intense focus on culture, it’s effects and importance is only about ten years old, although company culture dates back to the first company (whenever that was). Lets hope that it doesn’t take as long for people to recoginze the importance and impact IT has on success.
This IT success thing is funny- a large part of the problem is that IT is not truly integrated into the company. I think that most executives would say that good systems are important and have impact. But if you dig one level deeper and ask why the answers would be very vague. They should be very concerned with whether or not the information that they use to run the business is good, how to guarantee that the original data input into systems is good, and if the systems that are manipulating, migrating, and reporting the information are good. The required level of goodness must be clearly linked to and driven by ever changing strategies and tactics.
In a well run company (which is too often an oxymoron) the CEO sets strategy with input from the executive staff; in turn, each VP sets strategy for her department. All of the things you mention fall in the baliwick of the top IT person (either a Chief ITO or VP) and it’s his responsibility to make sure everything is ‘good’.
My experience is that IT has to play traffic cop once the strategies filter down; i.e., the projects that are created require systems that overlap the areas and/or the competing objectives of the various entities within a company cause overlap of IT projects. Sure IT needs to sort it out but often gives up and tries to do everything while doing bad multi-tasking (a lot of stop, start, relearn). You either need a PMO-like central control suggesting (to execs or governance board) which projects to do (considering IT and non-IT projects) and/or top executives who work collaboratively to understand a lot more about IT and their projects (which is what a PMO-like org facilitates). I’ve got to think that culture has a role in this- how do MAP elements come into play related to how IT projects relate to other projects? or related to collaboration facilitators like PMOs? I appreciate your thinking with me on this.
Of course culture plays a role as it does in any action within any company and MAP is the foundation of the culture. In the best of worlds projects are a result of a planning process I call PBO and stem from the vision of the CEO and the input of his senior mangers. Obviously, IT in all its ramification is an integral part of that process.
I quickly looked over your PBO link. I’m fascinated with how a PMO-like organization/function can facilitate this by helping executives collaborate. It’s clear to me how a PMO can facilitate project choice, project-strategy alignment, project acceleration, and innovation. I would think a PMO can play a critical role in the PBO process.