Arguments About the Value of IT Are All Wrong

There are endless arguments around whether IT is a support function or a strategic office. Neither side can win the arguments because they’re both wrong. IT occupies a middle ground that’s unique in the enterprise and can’t be classified like other departments.

What is Information Technology? What does an IT department do?

Would you believe that in an industry littered with standards for almost everything there’s no standard definition of IT?

Several years ago, the Information Technology Association of America published a 32-page document containing 25 unique definitions including its own. According to the ITAA, IT is “the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware.”

That either says it all or says nothing depending on your perspective. I find it rather meaningless so let me propose a completely new definition.

“Information Technology optimizes business processes by applying computer-based systems.”

Notice the focus on business process, not technology and not strategic company direction. IT has to carve out a middle ground where business meets technology.

Just as electricity enables our civilization to function, technology enables businesses to execute. Electricity and technology are meaningless in isolation. It’s how we use them that determines their value.

Extreme Positions

In my experience, IT organizations tend to fall into one of two extremes. They either focus on day-to-day operations or they focus on aligning themselves with the business. Both approaches are doomed to fail.

Running a business isn’t just about the daily activities that drive revenue. Everyone knows that – but it’s equally true that long-term business strategies don’t generate immediate cash flow.

CIOs tend to focus on one extreme or the other. Those with a technical background lean toward operations and infrastructure. Those with business acumen lean toward strategy and business alignment.

Think Convergence

Rarely do you find a CIO that understands how business and technology converge. Should IT focus on keeping the infrastructure running everyday or on adding measurable business value? I hope you realize that the answer is both.

If you focus only on daily operations, you’re simply a utility like the plumbing and electrical systems in your building. They are critically important to running the business but they add no value. In fact, they are expenses that every business tries to minimize.

Many companies have adopted operational standards like ITIL to improve daily operations. These management approaches can be helpful as long as you know what problems you’re trying to solve and what results you expect to get. Too often, ITIL is viewed as solution rather than a tool.

If your focus is strategic alignment and your infrastructure is inadequate for the company’s needs, you’ll never achieve alignment. It’s a hopeless endeavor.

Companies tend to be strategically driven either by marketing or product design. IT can help but face it, no company will enter a new market simply because IT can supply the needed technology. IT is an enabler not a strategy.

Technology Enables. People Solve.

While it should be obvious that daily operations and strategic direction are equally important, few IT organizations seem capable of doing both. This leads to unending arguments about the role and value of IT organizations and their leaders.

This poor understanding of the role of IT results in endless centralize vs. decentralize, outsource vs. insource, and too big vs. too small arguments. All of which contributes to hiring people with the wrong skill sets.

It takes many different kinds of people to operate an IT organization. The skill sets required are more diverse than in other departments. IT operations people have different skills than IT strategic planners. Many IT organizations are a hodge-podge of skill sets that overlap and conflict. The company needs them all, but they often don’t share common goals and objectives.

Technology can’t solve all problems or be all things to all people. At a tactical level, technology should make it easier and faster to conduct business. At a strategic level, it should enable new business opportunities by making information and knowledge available faster.

Focus on Business Process

Will the arguments about IT value ever end? Probably not, but give my definition a try. Focus on processes that run the business and drive key business decisions.

To optimize business processes, the underlying technology infrastructure has to be robust and reliable. In addition, strategic IT assets like software applications and databases must be highly tuned to the needs of the business.

Looked at this way, IT is neither tactical nor strategic. IT occupies a middle ground that helps the strategic business planners form a vision that’s executable.

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