By Andy McCue, 21 October 2004 16:30
NEWS Almost nine out of ten IT directors do not believe IT offers a competitive advantage to their business, according to a new report that highlights the continuing gulf between the boardroom and the IT department.
The survey of 447 IT directors in 15 countries across Europe found a third happy to stay in the back-office providing operational support and administrative support. Only 11 per cent said they see IT's role as providing a unique and competitive advantage for the business.
Over a third (38 per cent) also do not see IT failure as a cost to the business. Yet a quarter of the respondents reported losses of over 50,000 from IT cock-ups and 38 per cent reported losses up to 50,000.
The survey, carried out by Winmark and sponsored by BMC Software, found that half of IT directors do not believe their IT and business strategies are closely aligned a problem emphasised by the fact 36 per cent of the companies surveyed do not have an IT representative on the board.
Nearly, 40 percent of IT Directors said they do not spend enough time with the CEO to actually understand what is required from the IT function.
Part of that problem may be a loss of faith in IT by some boardrooms and CEOs but Brian Whittaker, European marketing director at BMC said it is down to a lack of communication, which is then compounded by the inability of many IT directors to talk to the business in the right way.
"It's about time and access. Sometimes communication is not occurring. The IT director is not giving it the right emphasis," he said.
Whittaker claims one of the areas IT has a real problem delivering the information the board wants is IT report requests, which he said rarely provide the right information in a way the business can understand it in a timely fashion.
"You never get it when you want it and it takes forever to get it," he said.
The problem appears to be rooted in business change and how it is communicated. Business changes that have a major impact on the IT function change at least once a year according to 30 per cent of respondents. But almost two-thirds said these changes are not communicated quickly enough for the IT department to respond effectively.
Comments
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1. Nick Cole
What IT says to the board is often not heeded. It is certainly rarely understood, and in particular the implications are often dismissed. These can impact on the basic premise on which a business decision is made, and hence the IT advice is seen as being unco-operative.
The principal benefit of IT is in supporting (hopefully) more cost effective administrative or facilitative processes. In today's world the dramatic business benefits of using electronic automation have already been largely achieved and therefore IT becomes a must have merely to stay on the wagon. As such it gains its own momentum and becomes a significant overhead in its own right. The law of diminishing returns comes back with a vengeance. Now that virtually everybody has IT what advantage is gained compared to the competition?
There is frequently an over-expectation of what IT can do and even with RAD the business rarely bothers to try and understand what it is they are seeking. So while rightly the main board level function of IT to produce reports is probably paramount it isn't IT's responsibility to create or analyse them but merely to facilitate the provision of the data. It is still very much the business that must tell IT what data it needs and how it should be presented. This will need better education and appreciation on the part of the Board of what is involved in using that data. It is a bit like blaming the a gun for killing someone when actually it is whoever pulled the trigger that is to blame. Business leaders make financial and other decisions on the basis of knowledge and understanding, but they invariably do not want to understand anything technical, especially in the public sector. Unfortunately what everybody wants is something to do the job for them, as cheaply and transparently as possible. When that job is the result of mystical manipulation of bits and bytes then a lack of understanding of the technology really impacts. While it is feasible to explain things in understandable terms these will often come across as patronising which adds to the general undercurrent of not being willing to listen. In any event how many times do we hear that a decision has already been made along with the need to be seen as being decisive and unwilling to rethink?
Part of the problem is that the vacuous management speak used by many in the boardroom hides much of the truth and reality. This 'speak' is what the board want to hear rather than what they should be hearing. Frequently political (small and large P) imperatives take precedence over common-sense. While it is essential that IT learns to speak 'business' it is equally essential that business learns to speak 'IT'.
As usual nothing changes, human nature remains and the willingness of a Board to blame someone or something else remains. It is their failure to recognise that they are as much part of the problem (and solution) as any one else that leads to this situation. A business is composed of many parts all of which contribute to the whole.
2. Shakeel Barok
Lack of understanding of the Business is a key reason why, perhaps, IT Directors are unable to deliver effective solutions to a business to give it a competitive advantage. Too, often i see IT Directors thinkings about Operational issues and support over and above the requirements of the business to use IT effectively. Operational issues are for operational staff, where as vision is the role of a leader, IT Director.
No wonder the board does not want to listen to the banging on of operational issues. They want to see exactly how IT will increase their profitability and give them better and greater market share. The Role of IT in any business is essential but only if it is protrayed in that way by the IT Directors.
Perhaps we need a change to a new type of IT Director who has a different set of skills to bring to the board.
3. Laurie Moseley
How many senior officers actually ask their IT staff to look at business problems? If they don't ask about the business, they won't get business responses. IT, and especially the mathematics underlying IT, is a very useful tool. Why not use it? All they have to do is ask
4. MSN messenger 7.0
Its not entirely true to say IT doesn't offer competitve advantage. I-Tech is always increasing each day so it will always find ways to improve services as good as possible
5. Sandra, Tran Mai Anh
According to my opinion, IT will always remains its significant role for firms to gain competitive advantages over its rivals. IT directors have their task to match business and technical requirements. However, business departments must also have their responsibility to help IT directors complete their task by communicating with them, help them understand more about the stratugy you are targetting to. I agree with Laurie in this aspect.