At the Legal Week Strategic Technology Forum I took delegates on a journey through some of the leadership challenges that chief information officers (CIOs) face in their quest to maximise the value that their firms generate from investments made in information technology. Its content was based on a number of streams of research that I am currently involved with.
Yet, despite the focus of my presentation on the CIO, a title and role most prevalent today in information and knowledge-based organisations, what was immediately startling was that the vast majority of those in the audience had job titles like ‘IT director’, ‘director of IT’ or ‘head of IT’.
Therein provides a glimpse as to the genesis of the problem that most of them experience as they seek to drive their organisations forward in the use of IT while also ensuring that the benefits from any investments made on IT are delivered. They are simply seen by most in their respective firms as the person responsible for managing the technology.
The ‘head’ or ‘director’ of IT label reflects an old view where the focus of the role was indeed on managing IT. This position dates back to a bygone era when the core requirement of the job was to keep the computer systems running. At that time, technology played a limited role in the strategy and operations of organisations. Today, most organisations are fundamentally dependent on their IT-based systems. IT can also play a strategic role for a practice. And with the outsourcing of IT to third parties and new delivery models such as software as a service (Saas), there may not even be any computer systems to run anyway.
Most of those in the audience recognise what must happen in order to generate the benefits to the firm from investments made in IT. The key challenge they face is that the environment within which they work can conspire against them generating a return for their firms on IT spend. They face a number of obstacles.
My research is suggesting that most partners lack any real awareness of what IT can do for their firms. Indeed, the transformational capability of IT is generally not recognised. Furthermore, IT is typically viewed as an operational liability — a cost to be minimised — rather than having any strategic implication. Within these senior ranks there is also a general lack of understanding as to exactly how IT generates value and the key role they and others in the firm play in that process.
The fact is, technology itself has got no inherent value. Unlike property or precious gems, for example, the value of IT is not in its possession. So just buying and deploying client relationship management or workflow or document management software solutions does not automatically result in any expected benefits flowing to the firm once the technical implementation has been completed. Benefits must be actively managed for.
Partners must recognise that any benefits from IT investments will only emerge from changes within the firm that accompany any deployment. These changes are enabled and shaped by the functionality of the software. Such changes can include implementing new processes, changing work practices, introducing new procedures, perhaps even changing the structure of the firm. Sometimes even the culture may require attention, particularly if the firm is considering new Web 2.0 tools promoting collaboration.
Consequently a programme of change must accompany any IT implementation. So, for example, delivering the benefits of new technologies supporting electronic and paper disclosure is likely to require significant change in a practice. Partners and other senior professionals in the firm must assume responsibility for ensuring that any required changes actually happen. This is not something that can be abdicated to the IT professionals in the firm. To this end, I would advocate the construction of a ‘benefits realisation plan’ to accompany any technical implementation.
How work is undertaken in many firms was devised in an era when there was no or limited technology. The accompanying structure, processes and work practices reflected this reality and represented the optimum configuration for that time. But technology today offers tremendous opportunities to organise for work in a more efficient and effective way.
The challenge within a firm is not to ‘manage IT’ but to ‘generate value through IT’. While subtle, this latter quest is a fundamentally different proposition requiring a different response. It demands a firm-wide endeavour. The IT director can have a central role to play in transforming firms, but it also requires partners and senior managers to understand that they too have a responsibility.
Professor Joe Peppard holds the chair in Information Systems at Cranfield School of Management.
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