n. a thought, belief or opinion, often held by many people and based on appearances.
-Cambridge Dictionary of American English
Oscar Wilde wrote, “The cynic knows the price of everything and the value of nothing,” and today, within far too many businesses, his aphorism aptly describes the problem with the perception of IT. Those who doubt IT’s value (and rail against its cost) are everywhere—in the boardroom, among the CXO ranks, heading up business units and among the end users.
True, CIOs are making tremendous strides toward boosting IT’s credibility. Many are overseeing a balanced portfolio of IT work and practicing good project management. Some have figured out how to run their IT shops like disciplined businesses. And plenty of IT chiefs have a seat at the executive table.
But data from our new survey, “Turning IT Doubters into True Believers,” indicates that the business side’s take on IT is still less than stellar. Even among companies with a solid reputation in the IT community, the average business perception of IT’s value is an unimpressive 6.05 on a scale of one to 10 (with one being extremely negative and 10 being extremely positive).
The biggest complaints? IT costs too much. It takes too long to deliver benefits or doesn’t deliver them at all. IT is a commodity that fails to deliver differentiation. It doesn’t line up with business strategy.
In many cases, these perceptions of IT are misperceptions, based on a lack of understanding or awareness. Not that that matters. “When you get to a certain level in an organization, perception is reality,” says George Tillmann, vice president and CIO of Booz Allen Hamilton, a $3.1 billion management and IT consultancy. “You can argue [that it’s unfair] til you’re blue in the face, but it really won’t get you anywhere.”
Because people act on their perceptions, whether valid or not, a negative view of IT can have real consequences for the organization. Most notably, according to survey participants, companies that value IT less miss out on opportunities for innovation and growth and, ironically, spend IT dollars inefficiently. “If a business doesn’t believe in IT and doesn’t believe that investing in IT is a choice that will produce results, they can put themselves at a competitive disadvantage” to companies that believe in IT and do invest, says Michael Gerrard, vice president at Gartner.
The good news is that CIOs can change how the business perceives IT and its value. Using a combination of measurement and communication practices, along with alignment-enhancing moves, CIOs can turn adversaries into allies and doubters into true believers—that is, businesspeople who regard IT as a strategic partner capable of delivering high value to the enterprise. The CIO’s success depends on it. “You absolutely have to have people that believe in you,” says Dave Holland, CIO of Genesys Health System.
It won’t be easy. Business leaders may be loath to commit their time or resources to getting involved in IT, and lack of a clear framework for valuing IT can handicap CIOs seeking to raise IT’s reputation. And perceptions, particularly long-held ones, don’t disappear overnight, or even with a success or two. Changing minds takes consistent effort, not only in terms of delivering IT value but in measuring that value, communicating that value and enlisting the business to help IT deliver that value.
But for those who succeed in making believers out of the business, it’s worth it. Benefits amount to a virtual wish list for most CIOs: increased credibility with the business, closer alignment with business objectives and improved ability for the CIO to influence the business.
It’s impossible to improve how IT is perceived without basic competence in the function and some level of system implementation success, but simply being competent or achieving a major project win is not enough. CIOs must be proactive and consistent about spreading the good news of IT value with effective measurement, alignment and communication (see “The Best Ways to Change Perception,” opposite page). Using a combination of these best practices tailored to their specific situations and needs, CIOs can attack the following typical complaints about IT.
IT projects are always late, always over budget, and always hard to track and understand.”
When Frank La Rocca was asked to take over as vice president of IT at KeySpan two and half years ago, he met with each of the senior corporate officers at the $6.7 billion utility company for at least an hour. Alone. The company’s IT budget was high, and IT transparency was low. The execs La Rocca spoke with said they couldn’t understand what IT was spending all that money on. They said they were approving projects but not getting updates on them. They felt disconnected, out of the loop. They noted that few projects were completed on time or on budget.
“The real itch for us was the inability to get clarity around where IT resources were being expended—money as well as people—and how those decisions were being made,” recalls KeySpan President and COO Robert J. Fani. “There was no receptivity to look at benchmarking or performance metrics for themselves. [IT was] unwilling to look at outsourcing versus insourcing. And the icing on the cake was their inability to communicate in a way in which they could be understood.”
The perception of IT within KeySpan was an “unfriendly, unapproachable organization unwilling to collaborate,” Fani says.
La Rocca sums it up: “The business had lost faith in IT.”
Things started to change just when they looked their bleakest—on the day Fani called La Rocca into his office to tell him he’d been been getting endless complaints about how IT projects were not getting done on time. La Rocca responded by showing Fani a scorecard he’d been using to track IT project success. In the past year, the IT department had been working on 43 projects, only three of which had been late. Two of those three had been delayed deliberately; only one was truly behind.
It was at that point, La Rocca believes, that Fani began to question the validity of his own perception of IT and started to give IT the benefit of the doubt.
“You have to be able to show people the facts in a nonconfrontational way,” explains La Rocca.
La Rocca took his experience with Fani and extended it to the rest of the leadership team. He began to share with them all the data collected on IT performance on a monthly basis. “I bring the entire portfolio in front of them—how much we spend versus what was budgeted, what the issues are with each project and the basic progress status of red, yellow, green.”
By the end of the first year, the impact of La Rocca’s regular updates on IT progress and achievements was palpable at budget time. La Rocca told the executive committee, “We can absolutely live within these budget constraints, but by the way, if you would see it in your purse strings to give us this much more, I could deliver this for you. It’s up to you. It doesn’t matter to me.” The executive committee considered it, and gave him the additional funding. “They felt enough trust in the process and transparency we had provided, and they didn’t even have to second-guess it,” says La Rocca. (For more on the power of IT transparency and how to achieve it, see “Seeing Is Believing.”)
Fani sees progress at last. “It’s taken about a year to get to the point where both the lines of business and the corporate functions are embracing this new IT culture.”
For a commodity, IT costs too much.
At CUNA Mutual Group, the big complaint was that IT cost too much. “The IT budget was growing by double-digit percentages each year, yet there were issues with projects and deliverables,” says CUNA Mutual’s executive vice president and CFO, Jeff Holley. “Someone like me gets very cost-focused when we’re not getting value out of an area.” CTO Rick Roy couldn’t argue the point; he knew he had to get IT’s costs in line before even thinking about changing minds about IT’s value.
Roy’s challenge at the $2.4 billion company was “changing the conversation about costs into a discussion about value.” He first focused on getting IT costs down through vendor renegotiation and redeploying resources, ultimately cutting his budget by 20 percent over an 18-month period. Roy also “blew up” the IT reporting structure, embedding managers deep within business lines, where they reported directly to business unit leaders and only indirectly to IT. It was all part of the effort to “shift perception away from a commodity idea of IT and drive alignment with the business,” he says.
Roy followed cost-cutting by benchmarking internal IT operations against peer groups. In some areas, his group was very cost-competitive. In others, they “weren’t bad,” he says. Roy did a full disclosure of his findings with corporate leadership. “We said, Here’s where we stand, and here’s what we’re doing about it,” says Roy. “It was a fact-based conversation. And the company could finally start to make decisions about IT based on data and not just perception.”
Roy knew there were some big successes happening within IT, but they weren’t getting any attention. “Some things were going very well, but they were the best-kept secrets on the planet, and we had to ask, Why aren’t we getting any credit for this?” Roy says. IT created monthly reviews for the heads of business units, updating them on service delivery and execution within their units. “That discipline really raised awareness about the amount of work and collaboration that was really going on,” Roy says.
The combination of cost-cutting and communication began to make a difference. “The fact that IT costs came down and we started to see a noticeable improvement in quality drove a significant improvement in perception,” says Holley.
The key hurdle at CUNA Mutual, and one of the biggest barriers to improving perception according to our survey, was lack of business leader interest or time to invest in these efforts. “A lot of CIOs wrestle with business customers who are very vocal critics of IT but won’t invest five minutes in trying to make it better,” says Roy. “But you have to get on their wavelength. And if you get their time, use it wisely.”
For Roy, that meant quickly communicating the connection between the positive things IT was doing and the value those activities generated for the business. His IT department uses a very detailed cost-benefit analysis model for all projects over $250,000, a monthly Balanced Scorecard for all IT efforts and monthly management reports tailored to each business unit. Roy had to take this complex internal IT value framework and whittle it down to one chart to show to business peers. “It was a challenge for us. How do you take a robust IT strategy and simplify it? You’re never going to have five hours to take the CEO or the board through it,” he says. “You have to give it to them in 10 minutes, and if you get their interest, then you can go deeper.”
You may think you’re aligned, but you’re not aligned with me.”
“I hate IT.” That’s what you’d get from one former sales executive at Armstrong Floor Products North America, a division of Armstrong World Industries, if you asked him what he thought of the company’s technology group. For him, IT was to blame for the problems he’d had with his PCs and his data. He certainly had no concept of, or interest in, what IT could do for him, says Vice President and CIO Don Martin, who joined the $3 billion manufacturer three years ago.
What was missing, in Martin’s eyes, was real alignment between IT and the business. And the best way to get that, he believed, was to embed IT in the business units. So six months into his tenure, Martin reorganized his staff of 200 and created a business relationship management group, with IT managers working to understand business processes, initiatives and strategies.
That done, he began working on a campaign to turn around the perception of IT’s business value. He and his four IT directors identified the top 40 opinion makers at Armstrong. They sent them each a questionnaire, asking them to rate IT on a value-capability scale. The IT directors then divided the opinion makers among themselves, and approached them with the new IT message: IT wanted to align with them and help them deliver business value.
But they couldn’t just show up like door-to-door salesmen, pitching a product no one had asked for. Instead, Martin and his directors leveraged the insight of the business relationship management group. Armed with knowledge of each business unit’s needs, the IT managers approached the execs with something that was actually important or interesting to that individual. “There wasn’t a single one of them that didn’t have something they needed from IT,” explains Martin. They also used the initial assessments of IT’s value to address each person’s doubts or concerns.
Martin’s goal was clear: Establish relationships with the businesspeople based on their key initiatives; communicate how the IT organization was relevant to those initiatives; achieve at least an 80 percent success rate in influencing those opinion makers; and ultimately, make working with IT a part of doing business at Armstrong.
Since that time, Martin and his team have gone back to those key influencers with another request to assess IT’s value and capability. There’s been an uptick in the ratings, but acknowledges Martin, changing perceptions takes time. “At least two to three years,” he says.
What about the sales executive who hated IT?
“He was a big mountain to climb, but we’re making good progress there,” says Martin. He may not yet love IT, but he has begun to invite IT to his strategic planning meetings. And good thing—he’s now president and CEO of Armstrong Floor Products.
Beyond the Money Pit
Successful IT leaders keep an eye on anything that indicates positive or negative movement in IT’s reputation, from quantifiable things such as customer satisfaction surveys and post-implementation audits to more anecdotal evidence such as being invited to strategic meetings or the chat around the watercooler.
“I listen for the number of positive comments versus negative comments,” says La Rocca. “And today there seems to be more positive than negative, with comments like, ’I didn’t know IT had it in ’em,’ or ’Wow, we’ve never seen this information before,’ as opposed to, ’Oh yeah, IT, the big black box. IT, the money pit.’”
Dave Holland, CIO Of Genesys Health System, keeps an eye on system usage in the hospital. IT true believers will use the systems to their full potential. In fact, Holland takes complaints about systems from doctors as a positive sign. At least, they’re sold on using them. (See “IT: Under New Ownership,” Page 54, to learn how Holland got medical users to sponsor IT projects.)
CIOs agree that turning IT doubters into true believers is an ongoing process. Roy has seen the results of his quarterly customer satisfaction surveys take a definite upturn over the past 18 months, from the 60th percentile saying IT meets or exceeds expectations to close to 90 percent. But that, he says, just buys him more time to make improvements. “It’s a marathon, not a sprint,” he says.
“It’s an ongoing challenge,” agrees La Rocca. “I take two steps forward and one step back every day. And given the complexity and magnitude of IT, I don’t think you’re ever fully there. But that’s what keeps it exciting.”
CIO Senior Editor Stephanie Overby can be reached at email@example.com.