• Technology
  • CFO.com | US

The Democratic Way to Great IT

A former CFO and CIO tells why business leaders should take responsibility for filling their own daily technology needs.

Frustration over information technology may be one of the most common attitudes among business leaders. From failed projects and systems degradation to costly downtime and data-security lapses, when it comes to IT it often seems that anything that can go wrong will go wrong, sooner or later.

At the same time, though, there may be a sense that IT could be great, given precise prioritization, the right managers, and effective communications with them. But even if companies have those things, the best that most of them can expect is that their IT will be good, not great, according to Susan Cramm, a former chief information officer and CFO and a longtime coach to IT executives.

The reason, simply, is that companies can’t afford the investment that would be necessary to ensure they get everything they want from IT, says Cramm, whose new book, 8 Things We Hate About I.T., is set for release on March 29 by Harvard Business Press. The perennial challenge is “how to fit 100 pounds of demand into a 25-pound bag,” she writes.

In an interview with CFO, Cramm refers to what she calls “governance bread lines,” made up of line leaders and executives who have put together business cases for projects with technology components. “Everybody is sitting there waiting their turn,” she says. “But the practical reality is that there’s always more to do than there is supply of IT resources.”

Overcoming the handicap of insufficient resources is possible only by “democratizing” IT-enabled innovation, writes Cramm, who was CFO of the Chevy’s Fresh Mex restaurant chain for four years in the 1990s after it was purchased by then-Pepsico subsidiary Taco Bell, where she had been CIO. That means creating a platform and policies that allow business leaders to safely fulfill their day-to-day technology needs on their own.

A new organizational model must evolve that “will allow IT to make sure IT is done well without trying to do it all,” she writes. “Business leaders should have more IT authority and responsibility.” In the democratized framework, the technology department would shift from direct to indirect control of IT-related activities, from a servicing to a coaching role, and from providing “point” solutions to providing enabling tools.

Even short of such a paradigm shift, a pervasive problem is provincialism on the part of line leaders. They tend to emphasize getting their own jobs done and ignore that from an enterprisewide perspective, there could be better uses for IT resources. “When all you’re interested in is, say, how to sell Taco Bell Grandes in Pennsylvania, there may be an opportunity cost, because if you get the [IT] funding then other things won’t get funded,” says Cramm.

Another common mistake regarding information technology is making IT-enabled projects harder than necessary by ignoring technologies currently in place. Initiatives usually are done faster and cheaper when companies resist the urge to buy new gear and instead reconfigure existing systems, says Cramm. But both business and IT executives “fall in love with bright shiny objects,” she tells CFO. She advises that for any project, IT should be required to include the use of incumbent technologies in the range of options.

Alignment between the objectives of business and technology leaders — which Cramm says has been “one of the biggest issues related to IT for the last 30 years” — obviously helps mitigate such problems. But she stresses that alignment can be overdone. “Pursuing alignment at the expense of realizing value, running efficiently, and securing the future has a negative impact on the enterprise,” she writes. For example, problems can arise when, in the quest for alignment, IT develops one-off solutions to keep business partners happy. “IT may create a database or a financial app just for Joe the CFO that doesn’t integrate well with the supply-chain management tools, for example,” she says.

None of this means that IT should be able to dictate what the needs of the business are. On the other hand, says Cramm, the business should not be able to tell IT how to do its job, including which vendors, technology, and processes to use. But doesn’t the business have that right, being the boss? “No,” says Cramm. “You’re business partners. It’s not a feudal relationship.”

Cramm, meanwhile, says she went back to the IT world because she found finance less interesting than technology. The latter is a younger discipline, she explains, with more unknowns and a faster pace of change. As CFO at Chevy’s, she was responsible for not only finance and IT but also franchising, legal, real estate, and construction. Yet the job was still easier than being a CIO, she says, because “everybody understood what those organizations did and their responsibilities in those areas.”

 

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