Mark McDonald

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Mark P. McDonald
GVP EXP
8 years at Gartner
24 years IT industry

Mark McDonald, Ph.D., is a former group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio

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Is IT isolated in your organization? Here are ten telltale signs in your IT strategy.

by Mark P. McDonald  |  January 25, 2013  |  5 Comments

It is time for the annual IT kickoff and presentation of the 2013 IT strategy. The kickoff meeting offers a unique opportunity to assess IT, its role in the enterprise, its goals for the coming year, etc.  These sessions provide insight into how isolated IT is from the rest of the enterprise.  Here are ten telltale signs that IT is on an island and seen as apart rather than a part of your company.

These are in no particular order.

  • Isolation by irrelevance. The IT strategy talks about IT without putting IT in a business context or connecting what IT does with what the business needs to do. An IT strategy that only talks about IT tells the business that they do not have to worry, care or expect much from IT because its more of a functional appendage than a core capability.
  • Isolation by the ordinary. The goals, targets and outcomes in the IT strategy are vague, unclear, and center on doing your current job better – high quality services, managing costs, delivering projects on time, etc.  Sure it is great to know that doing your job means success, but often doing your job is the best way to lose your job.
  •  Isolated by monetization.  The IT strategy is presented in financial terms, with nature only expressed in terms of budgets, costs and the need to control both.  Reducing IT to its input costs is the epitome of commoditization as everything can be expressed in terms of money with little regard to the capabilities and results returned for that investment.
  • Isolated by a lack of prioritization.  All projects, services, imperatives are equally important.  If everything is equally important, than nothing is particularly important to IT or the business.
  • Isolation in time.  The high level initiative or project Gant chart has the vast majority of projects completing at the end of 2013 or beyond.  What happened to last year’s projects – the 2012 initiatives that were planned to complete in 2013?  If everything is expected to complete 9 months or more in future, then how connected is it to the rest of the organization.
  • Isolation by generalization.  The stated IT vision could apply to any company, any year or any industry.  How relevant and connected could your IT strategy be if anyone could fulfill the IT goals?
  • Isolation by repetition.  This year’s goals are the same or very similar to last year’s plus or minus 10%.  Is IT delivering new results or repeating the same results year over year?
  • Isolation by ability. There are limited investments in IT skills, capabilities or capacity to execute the strategy.  Given the growing and changing demands of new technology it is difficult to see how you can connect business and new technology without also gaining new skills.
  • Isolation by organization.  The IT strategy describes new governance arrangements, processes and policies for engaging the business.  This institutionalizes the separation of IT from the rest of the business via formal processes and procedures.
  • Isolation by stability.  Does the rate of change in the IT organization its structure and teams match the rate of change in the rest of the organization?  If IT remains the same when the rest of the organization is changing, then it has to be isolated.

These are just a few observations of IT strategies that indicate that IT is isolated from the rest of the organization.  An introspective IT organization represents a reasonable response to past pressures for cost, quality and risk.  However, this introspection is no longer valued in the emerging world of digitalized business its time for IT to re-integrate with the rest of the organization to prevent isolation from becoming banishment.

Related posts on IT Kickoffs

The annual ritual of corporate kickoffs

Are you providing the CEO with the best script for IT?

A few ways CIOs and IT executives make it easier to separate business from IT

When Frugality Fails

What is your IT mindset?

A tool for assessing technology’s amplification of your strategy

5 Comments »

Category: 2013 Strategic planning     Tags: , , ,

5 responses so far ↓

  • 1 Jay Oza   January 25, 2013 at 4:11 pm

    Good Post.

    @5ToolGroup

  • 2 Is IT isolated in your organization? – Gartner Blog Network - Mymsn5 Today   January 26, 2013 at 2:04 am

    [...] here: Is IT isolated in your organization? – Gartner Blog Network [...]

  • 3 Links for Jan 27 2013 - Eric D. Brown   January 27, 2013 at 11:46 am

    [...] Is IT isolated in your organization? Here are ten telltale signs in your IT strategy. [...]

  • 4 Brad Hurley   January 30, 2013 at 9:38 am

    Excellent points. Unfortunately, they describe almost every IT strategy I’ve ever seen.

    (Go Gate!)

  • 5 Roni   May 16, 2013 at 8:56 pm

    The IT leadership has to provide a vision for developing and implementing IT initiatives that create value for the enterprise in a constantly changing intensively competitive marketplace. To address the issue of relevance of the IT strategy to the overall business strategy, IT managers have to position themselves at the high point of the organization’s leadership, and look for the best insights and ideas, so that IT initiatives would help the organization excel within its environment. Effective IT leaders are the ones that lead a whole IT strategic management process, and deliver business value with IT investments.

    From a relevance standpoint, and to put IT in a business context, the leadership’s assumptions about environment, mission, and core competencies must fit reality. Also, assumptions in all three areas have to fit one another. The theory of the business must be known and understood by the IT leadership and throughout the organization. Also, the IT strategy has to be tested constantly to make sure that it is consistent with the organization’s goals, business strategy, and environment. The IT leadership has to interact with the entire organization in order to understand the organization’s environment, and to be able to define a unique strategy, attract the resources necessary and build the capabilities required to create value for all stakeholders.

    The IT leadership has to set a strategic direction to transform the organization. The IT leadership has to focus on getting management and employees pointed in the right direction with the ability to learn and adapt concurrently to help ensure that the IT strategy is relevant to the organization’s business strategy, and will deliver the best IT value. As part of a relevant strategy, the organization’s IT resources have to be organized to formulate and execute the business strategy. The IT leadership has to have the ability to capitalize on complexity and convert complexity into opportunity by embodying creativity and building operating dexterity. The ability to reinvent customer relationships is also important.

    Setting priorities involves redesigning solutions around the customer. It requires the ability to use IT affectively to achieve maximum business value and objectives. This leads to achieved harmony between IT and business decision-makers within the organization by focusing on improving financial performance and marketplace competitiveness. Making business decisions that take into account both business and IT management priorities, means ensuring that the organization’s IT sustains and extends the organization’s strategies and objectives within the organization’s structure.

    There is widespread agreement that communication between business leaders and IT leaders is essential for effective alignment between IT and the business. Strong alignment is more than just negotiating agreement about a particular set of initiatives at a point in time. In the extreme, resilience-focused managers can see their strategic-change focused counterparts as impatient and domineering, wanting to force through projects without considering the longer-term consequences for their units or the enterprise, while managers focused on strategic change may see resilience-focused ones as overly rigid naysayers. By discussing the two different perspectives in a common language everyone can understand, IT and business executives can adjust their requirements to resolve conflicts. As shared understanding develops, they may identify new approaches that better balance both perspectives from the start.

    To set priorities for new initiatives, the operational-resilience perspective focuses on how the new solution will integrate with existing technologies and business processes or whether the solution is scalable and maintainable. With this perspective, slowing down an initiative to ensure that it is being done safely is seen as acceptable since quick action without necessary controls can lead to later difficulties. Studies have repeatedly found that alignment affects profit, productivity, sales growth, and reputation, prompting firms to consider efforts to further increase the extent of fit between IT and business strategy. From a resource viewpoint, prioritization requires IT to be deeply embedded in key business activities, the same activities that may likely change if environmental forces call for a rapid shift in strategic focus. Having IT resources in close proximity to activities that need to change allows for rapid responsiveness to change.

    Setting priorities is one of the hardest things managers do. You try to involve everyone in the process and make it transparent, so that everyone owns the outcomes. But there is always room to second-guess the process, or decisions made in the process. People have a tendency to forget why decisions were made, or that we all agreed on the decision when it was made. The challenge for IT leaders is to optimize IT investments and not let it be an obstacle in the overall business strategy. Realizing the value also requires additional investments or process changes, such as training, process redesign, and skilled people, to complement the IT investment Lack of clear responsibility, inaccurate measurement, and misplaced investment, when combined with skepticism over the value of IT, can lead to frustration and finger pointing when the expected payoffs are not realized.

    To avoid repetition, the IT leadership has to function with an innovative business model mindset, that can either help the organization create a new market or allow the organization to create and exploit new opportunities in existing markets. Part of this approach would involve creating an environment for partnership and innovation between the business and its customer, and enable customers to capture maximum business value by: realizing the value beyond cost, demonstrating transformational leadership and strong senior management involvement, leadership commitment to share the business strategies, focus on business outcome, combine process and industry expertise to better interpret the market information, and enable technology to provide end to end approach.

    Repetition is related to the level of strategic flexibility, an important element on the part of the IT leadership. Strategic flexibility increases the adaptive capacity of IT management in terms of the degree of freedom to initiate or adapt to change. This requires a strong sense of hyper competitive attributes that require sensing and responding to changing business requirements. By not harvesting ripe IT fruit in a timely manner, organizations may also miss important emergent modifications or deviations in the strategic trajectory and could end up delivering on a strategy that is no longer valid or relevant in the current context.

    Dynamic capabilities are responses to the need for change or new opportunities, and the changes can take many forms: they involve the transformation of organizational processes, allocations of resources, and operations. Dynamic capabilities can take a variety of forms and involve different functions, such as marketing, product development or process development. The overriding common characteristics of dynamic capabilities are that they are higher level capabilities which provide opportunities for knowledge gathering and sharing, continual updating of the operational processes, interaction with the environment, and decision-making evaluations.

    IT managers do not always understand the nature of the business and, instead, focus more on the technology. The reality is that payoffs from IT investments are not just the responsibility of the IT function. Each constituent who uses IT or is involved in the value generation shares responsibility for aligning IT with business functions. Everyone who uses the resulting system or influences the data processed by the system should be responsible for the payoffs. Often times IT managers are so focused on delivering the whole package of projected IT benefits that they fail to realize the potentially high payoff from selectively delivering those parts of the IT package that can bring early satisfaction.

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