Managing Demand: A Suggestion

Many great responses on last week’s posting about managing demand.

Let’s talk about some of the threads that emerged. I was faulted for the analogy to Sony product development because the CIO is more accountable for a failure and has fewer resources and “new products” to bank on than Sony’s product people. I say that’s a cop out. If Sony can diffuse accountability for a loser to such an extent that no one emerges as accountable, then I wish them luck. Someone is always personally accountable for failed products at product-focused companies. It simply depends on where in the organization a connection is made between the product and the person. Sometimes that connection gets pushed all the way up to the CEO level. Remember John Sculley at Apple? He put his name next to the Newton PDA and become the product manager in the eyes of analysts, the media and shareholders. The Newton became symbolic of his reign and it ultimately helped take him down.

My point is that CIOs should be as accountable for demand of their products as Scully was. What’s holding IT back is the sense among the business that accountability is so diffused within IT that no one takes personal responsibility for the “product” being introduced, aside from implementation responsibility. The Sony analogy is meant to drive home the point that IT is a product development function as much—or more—than a fulfillment function. As outsourcing increases, as packages dominate, the product development function inside IT needs to be more highly developed. As things stand now, IT fulfills demand for loser products and absorbs the frustration and blame when those products fail to change the world.

I don’t see many solutions to the problem in the responses, however. So let me propose a simple one: How difficult could it be to designate a lieutenant to be IT “product manager,” with responsibility for gathering demand information and funneling it into reasonable IT “product” plans with input and eventual sign-off from the CIO? (Of course, the CIO is ultimately the product manager of IT, but again, that’s mostly for accountability’s sake. And the CIO doesn’t have time to go out and develop products and assess demand at a real grassroots level.) It’s a friendlier approach than what we have now, which is an order taking process at budget time, following by a merciless winnowing out of requests by the CIO, CFO and CEO. Who has tried this “product-based” approach and can report on the results?