• rm@rmbastien.com

Value of Technology Part 3 – Corporate IT’s Value Is in the Crafting

Value of Technology Part 3 – Corporate IT’s Value Is in the Crafting

Using business value as a gauge of performance is not only wrong, it is too advantageous for corporate IT teams.  What a predicament: to be measured on something that you have little control over and is created by others!  As long as the other party performs well, you get a free-ride to prosperity. 

Everyone that contributed to, let’s say a 20% reduction in waiting times at the airport gates, should celebrate the business value of this achievement. However, it is by no means a sign that the corporate IT staff involved in the project were any good at doing their part of the job.  

Successfully using technology to make a valuable business achievement doesn’t mean anything about the performance of the IT teams involved in the accomplishment.

As a supporting capacity to the real creation of value by your organization, the IT function requires to be measured on other things.  Within the current typical engagement model, the corporate IT function shouldn’t be made accountable for creating business value. We saw and Part 2 that corporate IT’s business is not banking, insurance, car manufacturing or offshore drilling. In Part1 we covered the important of not confusing the value of an investment in technology with the performance of the tech-teams that create the technology.

I’m sure that you’d agree that corporate IT teams should be accountable for adequately supporting your business endeavors.  And what should you expect from them?  The answer is not that simple because corporate IT is —and always has been— a two-headed beast!

One brain is dedicated to operating the IT assets and the other one focused on changing them.  The ‘operate’ and ‘change’ halves are very different.  Furthermore, their respective performances cannot be evaluated collectively.  One side is dedicated to continuity, short-term actions, and transactional speed.   The other one is dedicated to change and is judged on very different criteria. 

The First Half: Quantitatively Measured and Standards-Based

The IT operations —as they are usually named—are devoted to keeping computer systems running smoothly.   They work with existing assets, the solutions that were put in place by the second half dedicated to change.  

The good news about operations is that, over the last few decades, this half has implemented quantitative measures of performance that leave little space for interpretation. System failures, downtimes, response times and others are undebatable measures of a good job done.  Furthermore, the major part of the IT operation costs comes from purchased, standards-based technology resources.  This means that most of the costs to operate the IT assets are traceable to vendor invoices, so that there is always an auditable evidence of the costs. This means that most of the costs can be compared to the same commodities provided by other vendors.  This opens the door to frequent optimization efforts. They measure themselves, and they genuinely improve.

The Ill-measured Other Half

The other side of corporate IT lives and breathes on change.  The development, software factory, solution engineering  —or any other of the many name it’s given— is dedicated to understanding new requirements and changing the systems to adequately support the evolution of your enterprise.  The expectation toward the second function should be that they do the right thing, at the right pace.  In other words, the evaluation of their performance should be the speed at which they provide their contribution, and the quality of the work done.  

Quality and Speed

Both velocity and excellence of work are important and interdependent. Corporate IT could produce quality outputs at an unacceptable pace or inversely, speedily provide poorly engineered deliverables.  It is not without embarrassment that I’ve witnessed much too often poor quality outputs delivered at a slow pace.

Quality and speed allow your organization to more rapidly respond to market changes, or better, to provoke the disruptive changes that will give you a profitable business edge.    

Cost is voluntarily out of the equation, since most corporate IT costs for the development half of IT are directly linked to speed.  Being slower or delivering poor quality results usually increases costs, sooner or later. Additionally, I suspect that from a purely business point of view, you need more rapid delivery of change, not lower costs —although that wouldn’t hurt.

Poor Measures

The bad news about development head is that this half has no reliable measure for speed, and an incomplete grasp on quality.    Refer to this article to discover why speed in delivering change cannot improve. The reason is simple: it is not measured. It has never been, and unless the engagement model is changed, the second half will continue to be un-measured on speed —and remain mediocre on that front.

You may also want to learn about  why the same faulty engagement model leaves unattended a whole section of quality that later boomerangs back to your business endeavors and slows IT turnarounds.  

Summing Up Value for Corporate IT

Regardless of the state of your organization’s processes to assess corporate IT’s performance, keeping business value in the right place, as an investment assessment tool, is a first step toward clarity upon expected results.

Business value should never be used for appraising corporate IT work, and is no replacement for adequate measures of performance that foster accountability.

The next step is to align IT’s work with quantitative measures of performance that are aligned with you enterprise’s expectation toward their work. Beware however that new meters need to be put in place. The ones in place leave too many important areas unattended, which irremediably leads to underperformances.

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