Sunday, May 18, 2014

Who is Accountable for Strategic IT Decisions?

IT strategic management and governance are interdependent disciplines.

Traditionally, IT has been treated as a cost center or a support function, not as a strategic business partner. As businesses move into the digital future, technology is the fastest growing arena, the potential innovation disruptor, and it would be an understatement that IT is complex. Though more and more CIOs are invited to the big table, the provocative debate would be: Is it true that certain IT decisions should never be made by IT people, if so who is accountable for strategic IT decisions? Or more broadly, what’s the best scenario to make IT decisions, and how to enforce IT governance as well.

It is about IT, IT shall participate in decision making: IT is a necessary part of most businesses these days. It has been traditionally treated as a cost center in large enterprises, which in turn fostered the defensive and sometimes adversarial attitudes in some IT people. The best way to make IT more effective is not taking away their power or put more boxes around it, but to welcome it into the business family as a contributing member and integral part of the business. The goals for business and IT communication and co-decision making is to make sure that businesses get a high ROI out of investment and that the cost of that dollar is not higher than alternative opportunities to get to the same solution.

IT strategic management and governance are interdependent disciplinesNeither business nor IT knows the full picture on these two pieces of the puzzle until they work together. Hence, either for strategic IT matters or governance practice, cross-functional collaboration is crucial. On one side, business engagement is absolutely important for strategic viewpoint and IT governance effectiveness, it is reasonable to understand anything that has strategic or even business operational implications should thus not be taken solely by IT; on the other side, the high mature CIO shall orchestrate strategic scenario and lead the governance process, providing IT thought leadership and specialized expertise as key inputs for these business decisions.

IT governance is higher up on the radar of corporate boards; whereas IT acts as trusted advisor to Board.The talk about IT should not just be in the business language, it should be in business context and IT should be discussed in exactly the same way as other critical resources - finance, people, and marketing. etc. And the head of IT must take on a similar role to the heads of finance and HR - being trusted adviser to executive and board, rather than the tactical manager of the charge into technology-enabled change. As more often, IT governance is the most neglected part of corporate governance. The alarming feature of that is IT governance is a critical part of corporate governance.

Collective InsightFor any strategic decision making, collective insight is critical; in some circumstances, IT should lead the decision while in others, business should make the decision. The point is people in IT might be one of the intelligent groups of talent who are adapting every day to new changes faster than any other industry. To leave them out of strategic decisions completely would be setting up business for failure. It is equally important that IT decision is the business decision, it is not sufficient to make strategic decisions without inviting business parties in.

CIO as the business strategistFrom IT leadership perspective, it all comes down to how much business acumen your CIO has and how much knowledge about the true business priorities. CIOs who understand their business in-and-out can easily shift the IT focus to the right processes, IT spending, an extension of IT systems or any other IT related question in business term. Board and senior executive management team have often more pressing priorities than getting deeply involved in IT management.Thus, setting the effective IT governance is more critical than ever.

Nowadays, more often than not, decision making is the teamwork, not just the business executive’s intuition only, especially IT strategic decisions or investment directly impact business’s bottom line to keep the light on or the top line business growth, it has to leverage the systematic governance processes, analytics tools, and collective insight to ensure making decision right and executing it well.


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