When I speak with most senior executives at companies, they highlight the “value gap” in information. According to the PriceWaterhouseCoopers 12th Annual Global CEO Survey in January 2009:
“…CEOs still see major gaps in the information they need to survive the next 12 months and make decisions about the long-term success of their businesses. CEOs believe that agility, customer service, talent, management and reputation are the four most important factors in long-term competitive advantage. Not surprisingly, most also believe that data about their customers (94%), brand (91%) and employees (88%) are important or critical to long-term decision-making. However, strikingly low percentages of CEOs say they have comprehensive information in these and other critical areas that contribute to organisational agility. Just 21% have comprehensive information about the needs and preferences of customers and clients. Less than one third feel they have all the information they need about reputation (31%) and the views and needs of employees (30%).”
I would not expect the results of the PWC survey to be a surprise to anyone in IT. With that said however, why aren’t IT professionals surprised? If they truly know this is the reality for companies, why hasn’t the value gap in information been solved?
Here are my views on this:
Organizational Silos
Most organizations exist as functions or silos, creating barriers for information to flow between them. Further, the compensation system of most companies encourages a silo mentality. For example, the person in charge of sales is compensated on hitting sales targets. I’m not advocating that this is bad, as organizations (especially publicly traded institutions) need to hit revenue targets to survive.
Realizing they are functionally siloed and their metrics typically do not cross organizational boundaries, IT must embrace and work through the model regardless. IT transparency is key in working within the constructs of an organization.
Politics of Information
Many people in an organization look at information as power, i.e. the more information you have, the more power you have. This mentality encourages the hoarding of information and a lack of cooperation to solve the information challenge within an organization.
Pressure on IT to Deliver
If I said to an executive, “it will take nine months and $2M to deliver your project. But to do it right, i.e. manage the data properly, it will take eleven months and $2.3M.” What do you think the response will be? “Do it in six months for $1.4M.” In general, IT organizations feel a tremendous amount of pressure to execute and deliver, yesterday. To meet expectations, IT organizations often try to deliver projects in six months.
You will often hear sponsors encourage the “get it in quickly” approach and “we can clean it up in phase two”. More often than not, phase two never comes.
Lack of Data Architecture
Within most organizations, data architecture, information management, data governance, enterprise data management are all terms that lack clarity and definition. When I discuss data issues with most senior IT people, they want to address them, but they don’t know how or where to start. To date, they’ve been mired in “keeping the lights on” with little time focus on what matters to the business – the information. Most IT organizations gravitate to what they know best, infrastructure and applications.
The net result is that most companies do not have a strategy or architecture to manage their information.
Stay tuned to my next blog where I discuss IT best practises for these challenges.
4 Comments
Great article, and you are correct – this doesn’t surprise me at all. I agree with your points in the write up, especially the ones concerning organizational silos and pressure on delivery.
Because of the way that companies are ran today, most CEOs look for the next number – not the number in 2, 5 or even 10 years. Accordingly, the majority of emphasis for success is placed on the sales organization and making the “next” sale. Other organizations, such as support, licensing, etc. know nothing about the deals being made and what it’s going to take to support the customer(s). However, as companies noticed a general trend several years ago related to new software contract agreements, or the lack thereof, maintenance and support revenue became significantly more important – to the point of being strategic.
At some of the companies that I have worked for I have recommended developing service teams for major accounts that include marketing, sales, consulting and support. For these customers, approaching them with a united front to help accomplish their goals and goes a long way. For specific accounts (depending on company size), I recommend an “executive sponsor” visit once every six months. This helps alleviate the assumed approach of an organization that encourages silos and provides a direct channel to the executive team in a company. It also ensures that information regarding an account/partner/OEM is available to everyone and shared, not just relayed to a single individual or organization.
Of course, to make this initiative successful, you need a proper IT infrastructure that provides access to different data sets, documentation, content systems, CRM/ERP info, and meetings notes and spreadsheets that is available to all of those that need access. Which, by the way, is not cheap. There are several alternatives, and many companies started on different KM initiatives several years ago, but the economy has somewhat hindered forward thinking. Executives want cheap storage of information, cheap resources to manage the program, and reduced expenses. But what they don’t realize is that spending a little more money for a true Knowledge and Content Management system will give them a great return on their investment (ROI).
When I am consulting with companies, I sometimes use the analogy of building a house. EVERYTHING depends on the foundation. A bad foundation can wreak havoc on the most beautiful house – to the point where it can’t be occupied. In the same manner, a bad application foundation (Platform, Product, Process, etc.) can be condemned just as easily, so it is very important to spend a lot of time on the foundational aspects and really put good people, process and technology to work.
Also, remember to include those that will be using the system in the overall design, as well as in specific areas that pertain to their part of the business. Gathering support at every level within a company will be extremely easy others are viewed as stakeholders.
Great article, which in my expereince, is totally on point. I would add that most leaders of technology seem to report to another C level that don’t understand technology. So if the Tech leader says, “1 year and 1 million’ for a project, and that is already aggressive, the C level will tell him to do better, like he is negotiating with a used car salesman. Ray’s analogy about the house is excellent. I lived it with a reporting dashboard project. It started out on a weak foundation (wrong DB structure), and remained that way. The “pigeon management style” CEO wouldn’t listen, then blamed everyone else. I learned a crucial lesson working as a PM at this poorly run company about referential integrity. It is complicated! A great testing and launch plan is the only way to ensure performance, and this takes time.
Thanks for your comments. What especially resonates with me, is the pressure on public companies to deliver on a quarterly basis. It often leads to a short-term mentality and leaves few resources to focus on more strategic initiatives. From my perspective, this is the leadership challenge that we face and must work on that fine balance.
I also like your comments on forming cross functional teams to support customers. I agree that this approach will reduce barriers.
Thanks again.
Kevin,
I couldn’t agree with you more. One of the irony’s of IT is…you can’t get enough budget to do it right the first time, but there’s always enough budget to do it right the second time!