IT failure? Blame your CEO.

IT failure? Blame your CEO.

Summary: It's time to starting thinking about the CEO's role in determining the success or failure of IT initiatives.

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TOPICS: CXO
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There is no simple formula for achieving success on business transformation projects such as large IT initiatives. One primary reason these projects are complex is because they cross organizational boundaries and departments.

Most discussions about IT failure highlight project management tasks and budget control as key determinants of project outcomes. In a departure from traditional thinking, however, two recent articles emphasize the CEO's role in determining the outcome of IT initiatives.

Information Week's Bob Evans raised this issue in a piece about Mark Hurd, CEO of Hewlett-Packard:

But I want to focus on a startling correlation [Hurd] made about the role that customer-side CEOs play in situations where a company's IT is bloated, backward, expensive, and ineffective:

"Because I'll tell you, I don't know how many CEOs are in the audience here, but when you show me bad IT—and I meet a lot of CEOs, and do a lot of talks in front of CEOs—and I get a lot of CIOs who tell me how bad their IT is. My first reaction—to be very frank—is it's probably a bad CEO, as opposed to bad IT."

Along the same lines, SAP consultant, Caroline Olsen, wrote an impassioned (and somewhat bitter sounding) plea for CEOs to take their own projects more seriously:

I have spent over fifteen years assisting you, including seven years in various SAP Project Rescue initiatives around the world.

Your SAP projects, so important for your business and the already harmed global economy, have no importance to most of you.

You purchase “SAP talents” like toilet paper.

You excel in the art of improvisation and hypocrisy.

Your CEOs are notably absent while your CIOs radiate smugness.

Despite the bitter tone of Caroline's comments, her sentiments echo those of HP's Hurd: it's time for the business to take greater responsibility for IT success. Although Caroline mentions SAP, this is a generic enterprise issue that goes far beyond any particular vendor.

THE PROJECT FAILURES ANALYSIS

It's easy and tempting to view IT as somehow unique or distinct from other business domains. However, that's an erroneous view rooted in the origins of IT as a technology-driven discipline.

High priests and exclusivity. In the early mainframe era of white lab coats and punch cards, delicate and expensive computing equipment was by necessity set apart from the business as a whole. In those days, computing was a complicated and expensive resource, run by an exclusive group of expert "high priests."

The July 16, 1984 issue of InfoWorld magazine described this separation between centralized IT (called MIS in those days) and the business as a whole:

Before the micro revolution, computers weren't purchased by individuals and generally came with a caste of high priests who ran them.... Software was written by the neighborhood temple of high priests and turned over to your high priest.

Business / IT integration. Today, the era of IT separation and high priests is over. For most organizations, information technology is a core business function that is no different from any other operating activity.

I discussed this perspective with Paul Ingevaldson, former CIO of international retailer, Ace Hardware, who told me:

If the officers of the company are involved with determining the IT agenda, why should IT be aligned with the objectives of the company any less than the sales, legal, or manufacturing departments?

Sometimes upper management mismanages IT, which does what it thinks is best, but not necessarily what the company needs. That’s the source of the alignment problem. Management structure causes these issues rather than the individual tactical issues related to a project.

I also spoke with Jennifer Allerton, CIO of Swiss pharmaceutical giant, Roche, about this topic. She expressed the view that IT is an integral business function:

Historically, the CIO placed multimillion-dollar bets on uncertain technologies and therefore had to be a technology expert. Today, the CIO’s role should involve 80% business and 20% technology.

We’ve done a disservice to ourselves by using three-letter acronyms to create a myth around IT, when technology investments are actually no different from investments in other parts of the business.

I asked Chris Potts, Corporate IT Strategist and author of the book, fruITion, for advice to CIOs on dealing with these issues:

Here are three tips to help convert your CEO’s understanding of where IT fits into the bigger picture:

  1. Make sure your business does not have a standalone "IT investment plan". As CIO, you should report to the CEO on the portfolio of business change investments that include IT.
  2. If you want your CEO and others to understand that IT is an integral part of being a business, then it’s up to you and your people to behave that way. Do not call everyone else "the business," or worse "internal customers," and stop using phrases such as "aligning IT with the business."
  3. Focus C-suite strategic conversations about IT on how your customers and staff use technology-related resources to create value. Avoid discussing the technology itself; how much money the organization spends on it; or who provides it.

My take. Increasing your CEO's commitment to IT as a business function requires persistence, dedication, and coordinated action. Although few observers discuss the CEO as a primary driver of IT success or failure, it's time for that to change.

How would you train the CEO for IT success? Please share your thoughts in the talkbacks.

Topic: CXO

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6 comments
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  • Blaming the CEO for IT Project Failure!

    Stop Blaming the Software - look at the upper echelons of your organization to find the key cause to your failed IT Projects.

    As I have repeatedly said for the past year or so, and covered in my blogs, when it comes to IT Project failure, your CEO needs to look at how they have contributed to the failure. Simply put, they have the responsibility to make decisions but no accountability for the outcomes of them.

    CEO's need to be fully involved and committed to the pre-implementation planning phase of the project, because this is the point that determines the success or failure of the project. Just signing the check does not constitute commitment - it simply means access to corporate funds.

    How can CEO's make sound investment and pre-implementation planning decisions in the first place if they don't have access to accurate and extensive information on which to base their decisions? They simply can't!. And trust me there is no point outsourcing those decisions to third parties - because they don't always have your organizations best interests at heart - let alone know your organizations business requirements.

    If CEO's and C-level executives want the responsibility of making those critical strategic project decisions, they also need to be accountable for the outcomes. Not blame the project team, CIO or the Vendor!

    Kind regards
    Sarah Runge
    Corporate profiling
  • CEO and the Board

    I wholly support placing the blame on the CEO, though I don't see the problem being solved any time soon.

    The latest "State of the CIO" survey from CIO Magazine showed that only 43% of CIOs even reported to the CIO.

    I will go a step further and suggest the problem is rooted even higher in the enterprise - at the Board Level. According to an ISACA 2008 survey of 255 non-IT Executives: IT Governance, a function of the business and the Board of Directors, is an ad hoc agenda item at Board meetings.

    Given the rate of IT failure, I don't foresee these leaders stepping in when it is far easier to just blame the CIO.

    Steve Romero, IT Governance Evangelist
    http://community.ca.com/blogs/theitgovernanceevangelist/
    Steve Romero
  • RE: IT failure? Blame your CEO.

    I'm sure there are resonances that flow through
    the collective hive mind of our industry :) i
    just wrote this for the CC Learning newsletter
    in Australia:

    It is time the rest of the organisation stepped
    up to its responsibilities to IT.
    For a decade or more, it has been fashionable to
    beat up the IT departments of the world for
    their historical failure to engage the business,
    to "align" or as the new buzzword has it, to
    "integrate"...
    Well, not so fast. It takes two to tango. "The
    business" is a horrible term for everything not-
    IT, but who do we really mean? We mean the peers
    of the CIO: the other departments who rely on IT
    to get their jobs done. We mean the executive
    team running the organisation. And we mean the
    governors: the Board or the trustees or the
    government. It is worth asking what these people
    were doing all the time IT was supposedly
    failing to engage.
    http://www.trainingnavigator.co.nz/emag2/?
    emagid=28
    The IT Skeptic
  • RE: IT failure? Blame your CEO.

    Michael,
    I like this article, and I agree with much in it. As a Twitter thread that we both participated in mentioned, it's not nearly as simple as the headline of "blame the CEO" in all cases. (And, of course, your article itself is much more balanced in its treatment of the nuances here). In many companies, the path from high priesthood to strategic key playerdom has not really been fully traversed: in other words, greater alignment IS still needed of IT with "the business."

    I differ (vehemently) with those folks who now look down on such things as the need to align IT with the business, or who don't recognize the benefits that come from regarding people as "internal customers", or who recommend even avoiding using the terms "IT" and "business". While the basic spirit behind those sentiments is of course valid -- IT is of course part of the business, as much as any other department -- it is in fact IT that has a problem in how it's perceived by other elements of the company, going back to the high priesthood. IT folks have often been snooty, vague, cagey even, about what we do, why we do it, and how we're meeting the company's business needs as a whole. Deprecating the important mentality shift that's occurred in the last few years (the high priesthood evolving to a service mentality) is exactly the wrong approach.

    With IT's background and history, the push towards IT/business alignment is ongoing and needs to be continual. Even more, it mustn't be deprecated as somehow beneath the higher goal of strategy. It's not an either/or. We can and must be strategic in our outlook while we deliver tactically. This shouldn't be either a surprise or controversial. And openly striving for alignment with our peers is nothing that anyone should sneer at. To do so is to throw the baby out with the bathwater.

    Peter Kretzman
    Peter Kretzman
  • RE: IT failure? Blame your CEO.

    Thanks for a great article and comments, Michael, Peter and Steve. To Steve's point about CIO reporting relationships, our latest Digital IQ study reported:

    Reports to CEO - 61%
    Reports to CFO - 25%
    Reports to Other - 14%

    Michael's post motivated me to crank out some early charts from our 2010 survey, focused on the CEO/exec view on IT (among other things) - see them here:

    http://www.ciodashboard.com/it-strategy/does-ceo-care-about-it/
    cbcurran
  • RE: IT failure? Blame your CEO.

    Quit whining - this is nothing new. IT needs to accept the responsibility if its not building what the business needs to succeed. An IT project without a clear set of requirements, direct and regular access to targeted users and an accurate ROI forecast is a failure witing to happen.
    Bazzzzzzz