The MakingITclear® Newsletter

June, 2008

Volume 6, Number 3

In this issue:

1. Make IT More Successful in Your Non-Profit
   My May 14th seminar was an eye-opener for some business people.
   

2. Featured Article: 3 Things Your CEO Wants to Know
   Ever wonder what a CEO asks a CIO? Here's the answer.

3. Quotes of the month

Make IT More Successful in Your Non-Profit
On May 14th, I did a seminar on this subject for TechBridge, an Atlanta non-profit that provides IT services to other non-profits. The seminar adapted some of the material in my book, Boiling the IT Frog, for the non-profit audience. Most of the attendees were business people, and there was a lot of open discussion about their problems in dealing with IT organizations. I explained to them how most of their problems are due to misperception and miscommunication, and many of them began to understand the truth about IT for the first time.

For more information on the meeting, including a copy of the PowerPoint presentation I used, see the TechBridge web site.

Featured Article

3 Things Your CEO Wants to Know

A lot of people who move up through an IT organization are surprised to find that the higher in the IT organization they get, the less the job is about technology. At the very top of the IT organization in the CIO role, the focus isn’t on IT at all – it’s on doing the best thing for the business. In fact, Peter Whatnell, CIO of Sunoco and 2009 President of SIM International, recently said that most CEO’s just want the CIO to provide answers to three questions:

1. Where do we need to invest?
2. How do we stand versus competition?
3. How do we mitigate risk?

If you think about it, these are three very good questions for an IT organization, yet none of the questions is technical, and none of the questions requires a technical answer. Let’s look at each of the three questions in more detail:

1. Where do we need to invest?
The key word here is “invest.” That’s because business executives consider IT an investment – an investment in greater revenue, increased profits, higher customer satisfaction, and other things that have benefit to the business. For something to be a good investment, it has to provide positive results that exceed the cost of making the investment, and that’s true for IT as much as it's true for any financial investment. So don’t bother to propose a project for which there’s no clear business benefit. What’s the point in investing if there’s no return?

2. How do we stand versus competition?
It would be nice to envision a CEO as having lofty visions of the future which don’t require consideration of the competition. But that’s unrealistic; the world tends to compare companies that have similar products and services, and investors in a company’s stock certainly look at competing alternatives.

While it’s easy to compare revenue and profit numbers for competitors, it’s more difficult to compare Information Technology. You have to examine the processes used for each major aspect of the business, look at the efficiency and effectiveness of the processes, and then drill down to the underlying systems and technologies being used for each process.

If a particular business process being used by a competitor is more efficient or effective than the equivalent process in your own company, then your company is at a disadvantage. If you net out the comparison of your processes to the equivalent competitor processes, and the competitor ends up ahead of the game, then there’s potential cause for action, and it may be time to invest in the improvement of your own processes and systems. But don’t just copy your competitors; try to do something that’s better. Your competitors certainly won’t sit still and leave things as they are.

And if your processes are better than all of your competitor's processes, then broaden your definition of "competitor." Look at companies that have a similar process to one of your processes, even if that company doesn't offer competing products and services. For example, L.L.Bean was at one point regarded as the leader in order fulfillment (they may still be the leader; I haven't kept up). Even if your company doesn't compete with L.L.Bean, if you have an order fulfillment process in your company then you might want to benchmark your processes against L.L.Bean's and see if you can learn something about how to improve your own order fulfillment process.

3. How do we mitigate risk?
There are two important things to notice in this question. First, there’s no qualifying adjective in front of the word “risk.” We’re not talking about IT risk here; we’re talking about risk in general. So this is more than just the question “How do we mitigate information technology risk?” It includes that, of course, but it also includes the question “How do we use technology to mitigate business risk?” It’s important for CIO’s to look at both of these issues: how to mitigate IT risk as well as new ways that IT can be applied in the business to mitigate overall business risk. Here’s an example of the difference. You can mitigate some IT risk by having redundant servers in multiple locations. You can mitigate some business risk by figuring out a way to reduce the impact of high fuel prices on your company by implementing a system to optimize truck routes or to reduce travel by using videoconferencing.

The second important thing to notice in the question is the use of the word “mitigate” which means “to lessen the impact or intensity of.” No sane executive expects to eliminate risk, since risk is a part of the world in which we live. We take steps to minimize risk where it’s appropriate, but it gets expensive to reduce risk beyond a certain point of diminishing returns. Business executives take a two-step approach to risk: reduce risk where it’s cost effective, and then mitigate the remaining risk to the extent possible.

Conclusion
Wise executives know that CIO’s will do everything possible to manage their IT resources wisely. It’s expected that this management will take time out of a CIO’s busy day, but this day-to-day IT management role is just a basic part of the job, taken for granted like breathing, eating and sleeping. Where the CIO really contributes to the business is in the added value that IT brings to the table beyond the day-to-day. Peter Whatnell’s three questions get to the heart of that contribution.

How would you answer the three questions for your CEO? Or are you too busy working on the day-to-day stuff to be able to answer them?

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You might also be interested in these related newsletter articles:

• "How to Become a CIO," from December, 2005, describes the 8 qualifications of a CIO
  
  
• "Thrasher's Hierarchy of Business IT Needs," from November, 2007, talks about the Maslow-like hierarchy of IT needs for a business
  
  
• "How to Fail as a CIO," from March, 2007, describes ways that CIO's fail, and provides advice on how to prevent those failures
  
  
• "Top Ten Reasons Why Men and CIO's Don't Ask for Directions," from February, 2006, describes some of the potential pitfalls for CIO's
  
  
• "10 Rules for IT Job Success," from August, 2006, gives career advice for lower- and mid-level IT people (although the advice applies to executives as well)
  
  
• "Why Middle Managers Are Important," from January, 2005, describes the four vital aspects of a middle manager job
  

Harwell Thrasher is an author, speaker, and advisor specializing in the human side of Information Technology. Harwell shows IT and business people how to work together more effectively by taking the magic out of IT. Call Harwell at (770) 331-6979, or see more on the web site at www.makingITclear.com.

Send comments or questions to newsletter@makingITclear.com.

Quotes of the Month

In keeping with this month's topic, here are some appropriate quotations from the MakingITclear® collection. Use them in your presentations to emphasize critical points.


“A prudent question is one half of wisdom.”

Sir Francis Bacon (1561 - 1626), English philosopher, statesman, and essayist


“Beware of the man who knows the answer before he understands the question.”

Author Unknown


“Man has made some machines that can answer questions provided the facts are profusely stored in them, but we will never be able to make a machine that will ask questions. The ability to ask the right question is more than half the battle of finding the answer.”

Thomas J. Watson (1874 - 1956), the American president of International Business Machines (IBM), who oversaw that company's growth into an international force from the 1920s to the 1950s


“When in doubt, observe and ask questions. When certain, observe at length and ask many more questions.”

George S. Patton (1885 - 1945), a leading U.S. Army general in World War II in campaigns in North Africa, Sicily, France, and Germany, 1943–1945


“If there are no stupid questions, then what kind of questions do stupid people ask? Do they get smart just in time to ask questions?”

Scott Adams (1957 - ), the creator of the Dilbert comic strip and the author of several business commentaries, social satires, and experimental philosophy books