SNw 010 I.T. CAN add value Created by James on 6/13/2013 2:00:00 PM
Currently there is much scepticism about I.T. and much frustration with the steady stream of Information Technology projects that fail to deliver material value or which fail outright
Is this the way I.T. investments must always be?
Not at all, there IS substantial opportunity out there, but business must define that opportunity and manage the technology and the technologists
In previous newsletters I have explored the high level of information technology failure, examined this information technology failure as an indicator of corporate governance under performance and in general looked at aspects of information technology that may be viewed as casting a negative light on I.T.
In other issues I have explored strategy and examined the determination, planning and execution of strategy and suggested that the fundamental definition of strategy is "why the organization exists and how it thrives".
In this issue of StratNews I would like to make the point that information technology investments appropriately conceptualized, designed and executed can generate substantial value for the organization making the investment. I will also explore what is required to achieve this.
Appropriate, well implemented information technology applications can add substantial value
Appropriate, well conceived, well designed and well implemented information technology solutions can add substantial value.
In order to achieve such an outcome it is vital that the investment is made for the right reasons.
Investing in new information technology in reaction to advertising hype or as a fashion response is NOT an appropriate driver for new investment.
A clear and pragmatic view of a business opportunity that will deliver value and which requires the support of some component of information technology IS the only driver that will deliver value.
Value is a human characteristic generated by human beings and assessed by other human beings. Without the involvement of human beings nothing has value.
Used by a properly trained and equipped medical practitioner a stethoscope can be instrumental in saving a life. Without an appropriately trained person to use it, a stethoscope is of no value no matter how ill the patient. So it is with all technology, from a simple nail to the most complex space equipment, without a human being to use the technology in a way that other human beings experience as value adding, technology has NO value.
In other words, the most important requirement for an information technology investment to generate measureable value is that key people in the organization define this value and define how the technology will facilitate unlocking it as a first step.
Sometimes I.T. can add dramatic value
Sometimes information technology can add dramatic value.
My benchmark for value delivery is the first I.T. project that I undertook in a commercial setting in the early 1980's.
The software solution was designed, developed and deployed in about four months.
In the first year of operation the business was able to double its turnover by taking on major new clients because it was able to offer a service that was not available from competitors. The solution delivered a material economic contribution to the business for nearly a decade.
The key to this success?
An insightful realization on the part of the chief executive that there was something that computer technology could deliver that would be valuable to customers and solid alignment of the solution with the strategic driver of the business.
The technology has matured and the opportunity has long since reached a level of commoditization such that every player in that particular market segment can, today, do far more than was undertaken then. But the key consideration is that very substantial value was unlocked by creative use of a piece of technology that is tiny by current standards.
I have been involved in other projects that have also generated substantial value and so in every engagement I seek to identify what the critical piece of strategic thinking is that will unlock the true value of the investment (what will contribute to the organization thriving).
I.T. solutions can be delivered successfully
The above mentioned example is one of many successful I.T. projects that I have experienced.
A larger project involved the bespoke development of a comprehensive business information system for a particular service industry. The software developed in that project subsequently went on to become a successful product which is today in its second major generation in use by over 70 commercial organizations in South Africa in the industry concerned and currently being marketed around the world.
Getting to this point required huge energy and time investment by many people over a number of years in order to create a solution that could be used effectively in support of day to day business operations.
Executive custody on behalf of the managing director of the company that commissioned the original project was key to achieving success as was a clear understanding of what would assist the organization to use the technology.
I.T. solutions can be delivered economically and in realistic time frames
These and other experiences indicate that with clear strategic alignment and robust executive custody it is possible to deliver I.T. solutions economically and in realistic time frames.
In order to achieve time and cost objectives it is vital that project scope is ruthlessly contained by focus on the core strategic driver for the investment and that there is clear focus on the core strategic drivers of the organization -- why the organization exists and how it thrives.
A close knit team energetically lead by an empowered and enthusiastic business executive is a vital requirement of success.
This does NOT require huge amounts of executive involvement, executive custody is an intuitive state of mind not a grind. Custody requires a clear executive vision of the desired future business state and the manner in which this will deliver value and then clear uncompromising leadership.
Technology specialists who demonstrate a clear understanding of the strategic drivers of the organization are a vital further requirement for a successful outcome.
Doing it right is cheaper than doing it wrong
I regularly encounter people who do not think that they have time to do the right things in order to make I.T. projects succeed. Somehow there seems to be a widespread belief that it is possible to undertake a project without clear strategic definition and without clear executive custody and the project will succeed anyway.
This attitude is a major contributor to the 70% of I.T. projects that fail outright and the further 20% that fail to deliver on the orginal business expectation.
As with everything else which involves time and money, once the effort has been inappropriately expended the resultant non-delivery cannot be simply wished away. It may be easier to hide an I.T. project failure but it is more difficult to turn a failed project into a successful outcome than it is with something that is more visible and more tangible.
Accordingly, it is vital to ensure that the critical foundation elements of a successful project outcome are in place before embarking on any significant investment.
It is also important to realise that in the long run doing things right from the start is cheaper than doing things in an inappropriate way -- the wrong way may seem simpler and cheaper at the time but when no value is delivered or worse still, value is destroyed and the organization damaged or put out of business the real cost is substantial.
With the appropriate approach and appropriate professional team, it is always easier and cheaper to do things right.
Doing it wrong is always more expensive than the client organization can afford
As noted above, doing the wrong things can damage or destroy an organization.
At a less dramatic level, the wrong things are always expensive, whether measured in terms of reduced business efficiency, red tape that obstructs or drives away customers or in terms of other inefficiencies.
At some level a failed I.T. project will compromise and damage the organization.
Conviction that it can be done
As evidence of my conviction that dramatic success is economically attainable it is important to note that I have spent most of my career seeking ways of undertaking I.T. projects in such a way that clients get it right first time reliably and sustainably.
Critical factors for a successful outcome include effective executive custody and clear and effective strategic alignment.
Executive custody is an attitude on the part of executives in which they take full responsibility for defining and achieving a business outcome that delivers real value.
Strategic alignment is a clear definition of why the organization exists and how it thrives, coupled with a clear definition of the future strategic state of the business that an I.T. investment is intended to support.
Niether of these components require major time or effort, they do require concise, focussed time and effort which is directed at charting the course of the business solution in such a way that it will create sustainable value.
Conclusion -- I.T. CAN add value
I hope that the above discussion will assist you to effectively position information technology as a value adding part of your organization.
There is no doubt that there are amazing things that can be done using information technology, yet it requires the business genius of the people who have built the organization to effectively define the role that information technology should play in the organization and then to use the people in the organization to unlock the potential.
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