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September 23, 2006

Technology Information for Information Technology

Uncertainty is already hard enough on planning, but misinformation makes it doubly worse. For example,while academic and trade press journalism stirs the uncertainty with offbeat questions like "Does IT Matter?", irresponsible metrics like "IT spending as a percent of revenue" gather the kind of steam that lets people believe in the lip synching right up until the background recording is interrupted.

Business management orphans the lip-synch of metric myths. Good management makes IT better, and bad management makes it worse. Given that, guess what needs to be measured? Of course -- the management itself.

"IT" is not monolithic and for many reasons cannot be meaningfully "rolled up" into a single dimension of operational resource. We get the intellectual comfort of trying to do that from thinking about corporations as if they were buildings instead of systems, where we need to go out and buy X amount of concrete or X amount of nails. But because corporations are systems, their "composition" is more properly understood as the set of enabling terms of their behaviors. So as a business driver, technology is an environmental factor, more akin to regulations or geographies, where the challenge is this: to manage their potential impacts to levels of effectiveness and value by incorporating their inherent risks and opportunities into the company's operational behaviors.

Using a portfolio approach explicitly presents the logic of that incorporation. But here's a heads up. Who should control the portfolio? Don't be fooled by the apparently simple formula of having a CIO report to the CFO. Managing a portfolio is both a strategic discipline and a disciplined strategy. The goal is to achieve certain kinds of outcomes, but
the supporting process is to manage constraints. Just as you hold your CFO accountable for interpreting the financial environments both external and internal to the company, you'll need to hold a CTO responsible for interpreting the technology environments inside and out.

Posted by Malcolm Ryder at September 23, 2006 9:47 PM

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