Monday, June 20, 2005

Executive Cockpits

Oh, how most businesspeople just hate IT people... and vice versa. Have you ever observed how these two groups interact -- say, for example, watching them wave at each other across a parking lot? If only they'd use all the fingers on their hand instead of just flipping each other half a peace sign.

Surely, not all CEOs dislike their IT subordinates. I'm quite certain the executives at firms like Wal-Mart, FedEx, or American Airlines, view their IT organizations as critically important strategic partners. Yet, at the same time, I'd wager those firms are far more the exception rather than the rule.

At most businesses, IT originally emerged as an outgrowth of the accounting function. And, as everyone knows, accounting isn't exactly strategic. Trying to direct an enterprise based on its accounting is like trying to steer a boat by watching its wake.
Looking at where an enterprise's CIO reports is a telltale indicator of how strategic IT is to that business. For example, if the chief information officer (CIO) reports to a firm's chief financial officer (CFO), then you can pretty much assume that IT is viewed by top management as merely a cost center. Where IT is strategic, CIOs almost always report to either the chief executive officer (CEO) or the chief operating officer (COO).

As I posted in an earlier blog, "Rationalizing Software," management never wants control and power placed into the hands of individuals. Rather, the whole purpose of rationalization and bureaucracy -- the underpinnings of modern management -- is always to transfer control from producers to managers.

Unfortunately, the creation of software has managed to elude an engineered approach to its production. Software developers simply cannot agree on the details of a defined, quantifiable, repeatable process. Instead, highly skilled software professionals are, in essence, craftsmen.

As I explained in "Software -- Engineering or Craft?," the key to software development is translating knowledge into execution. Formalizing that process has thus far proven to be all but impossible. Like I said in that earlier blog, while most people can almost instantly describe a car's overall design, asking someone to describe a factory process for making cars is much more difficult. Far harder still is asking someone to define a process for designing a factory for making cars.

The net net of all this is that many businesspeople go out of their way trying to avoid IT as much as they possibly can. One way to do so is by outsourcing. Another is by developing an almost total dependence on outside software suppliers such as SAP or Oracle/Peoplesoft.

Personally, I'm dismayed by businesspeople who shun technology. After all, a manager's job is to cope with change, and as the saying goes, the only thing constant is change. Basically, in responding to change, there are only four variables a manager can manipulate:
  1. Money
  2. People
  3. Property
  4. Technology
One can almost envision an executive cockpit containing four levers -- one for each of the four factors listed above.
Executives possess countless tools to help control and monitor financial portfolios. Have you ever known a business to not know how much money it has? Similarly, every business maintains tight reign over its human resources as well as its plant and equipment.

But, what about TECHNOLOGY?

Most businesspeople haven't a clue how to even think about, let alone define, their organization's technology. Most of the time when it comes to managing technology, businesspeople act like a pilot who has feathered engine #4. They try to rely, instead, on managing technology solely in terms of its related money, people, and assets. Frankly, this approach isn't very effective.

Businesspeople often look upon IT people with great suspicion. For instance, they see in their technology staff individuals who appear to be more loyal to their profession than they are to their employer. IT people -- with their endless jargon and acronyms -- are renown for making businesspeople feel stupid and inadequate.

On the other side of the ledger, IT people often feel isolated and under-appreciated by their business counterparts. They don't believe anyone else in the work world has to cope with anything even remotely comparable to the rate and ferocity of technological change that IT professionals must constinuously conquer. For instance, accountants are still using the same basic double-entry techniques developed by the Italians during the Renaissance hundreds of years ago. Meanwhile, the underlying forces driving current computing projects, namely Java and the World Wide Web, are all of just ten years old, with newer technologies like wireless and SOA but half that age. In the mean time, quickly coming down the pike we've got even newer technologies approaching like RFID and the semantic web. Being an IT professional means committing one's self to a lifelong pursuit of learning.

IT people are also greatly frustrated by the businesspeople who control the purse strings -- folks who seem to never know what they want, can't express their requirements, and constantly change their mind as soon as any IT solution gets delivered.

Businesspeople need to learn how to think about technology. That's the reason for investing in enterprise architecture.

Executives who insist on continuing to fly their enterprise fortresses on just three engines deserve to be shot out of the air. Just remember that the reason why GM is being forced to offer prospective customers outlandish rebates or employee discounts isn't because of pension problems or the cost of worker healthcare. It's because they're not building cars with the technology and features provided by competitors like Toyota or Honda.


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