IT Can Deliver the Goods

Only 26 percent of the 130 senior IT execs surveyed said they track financial metrics after making a technology investment, but 63 percent said they want to do so. And while 81 percent are interested in applying "a predetermined method to screen and prioritize IT investments," 42 percent don't. What's holding them back? Eighty percent said their organizations lack financial skills, making it difficult to quantify the benefits of IT investments. Forty-two percent said insufficient financial knowledge among IT staff, in particular, precludes their companies from doing IT portfolio management.

Running the Numbers

A DiamondCluster principal maintains that IT professionals, unlike staff in marketing, operations and other departments, aren't trained in finance. Is that so? Those of you over the age of 35 will recall that most IT organizations actually sprang from the finance department, since the first computers were purchased for general ledger and other financial applications. So while most IT staffers aren't accountants, they're comfortable with numbers and know how to serve a financial master. Don't underestimate IT's ability to evaluate and prioritize technologies based on their revenue-generating or cost-cutting potential.

Ah, but we're told there's more to the financial accountability problem--a "cultural issue" specific to IT personnel. Because money was thrown haphazardly at technology in the late 1990s, the reasoning goes, IT lost its financial discipline and is having trouble readjusting to today's rigid ROI culture.

Nonsense. Just about every corporate department got sloppy in the dot-com years. How many marketing teams, for instance, blew their companies' venture funding or profits on over-the-top media campaigns and lavish promotional affairs? If IT spending was excessive, marketing spending was downright profligate, yet no one today talks about "cultural" impediments to disciplined marketing spending.Companies must get past the notion that IT professionals can't handle financial responsibility. Considering the fact that only senior IT execs participated in the Kellogg/DiamondCluster survey (which was done in collaboration with the Society for Information Management), could it be that some CIOs and CTOs have a prejudicial view of their personnel's capabilities? And could it be that some managers don't want to hold their reports financially accountable because they're uncomfortable delegating authority and insist on controlling the purse strings themselves?

The failure to align IT projects with business goals isn't so much a cultural problem or an aptitude problem as it is a management problem. Companies must shake up their organizations, adjust their processes and retrain their people so it becomes possible--and mandatory--for IT organizations and other departments to work together to deliver business value from technology investments. Stop making excuses and just do it--for starters, on small projects and with hand-picked teams. Meantime, if you have some successes to crow about, drop me an e-mail at the address below.

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