Good to Great I.T.

With apologies to Jim Collins for the title of this blog entry....

It seems to me that most companies judge the performance of their I.T. departments in two ways.

1. On infrastructure: Do things work? (And if they break are they repaired quickly?)
2. On Project Management: Do projects get completed on time and on budget?

If the answers to these two questions is Yes, congratulations! You are good.

These are pretty basic measures. Obviously we all want our PCs and laptops to run flawlessly. The applications shouldn't crash. Our website should not be down. We need to run in a secure environment. I call this executing basic blocking and tackling - the fundamentals of I.T. infrastructure management.

And secondly, we judge I.T. on project management and execution. if we're going to give the I.T. department millions of dollars to implement that new system, they had better not run over budget, miss deadlines or provide a system that doesn't work.

Of course for more sophisticated companies, I.T. excellence is measured on multiple conditions - I.T. strategic alignment, Physical and intellectual data security, Infrastructure Change control processes, Sarbanes-Oxley compliance, Governance, cost control, ISO certification, among many more....

But in the end, the average internal customer rates I.T. on two axis. Infrastructure and Project execution. If you do those things well, you have a good I.T. department.

I'm not going to spend much time telling you how difficult it is to execute these two metrics flawlessly. It takes dedicated, hard working, excellent employees, using good processes to make this happen. But for those of you who have managed to execute on these two major tasks, where do you go from here?

How do you get from Good to Great?

The short answer is: Business Process Execution. Now that you've provided the infrastructure and given the business the application tools, partner with the business to make sure the tools are used well - that the processes are being executed flawlessly.

How do you do that? Here are some suggestions.

1. Keep your eye on the prize. When big systems are justified, many times they're paid for with expectations of cost reductions or revenue enhancement or cashflow improvement or improved inventory turns. Make the business goals, I.T. goals. In the systems department, your job isn't done until the business benefit is achieved. (Makes any discussion about "I.T. alignment" moot.)

2. This forces you to look beyond launch date of the system. It says you must partner with process owners and managers to improve transaction execution, to achieve those business goals. This takes frequent, open and honest dialog. It requires partnering with your business counterparts.

3. Understand that the system itself doesn't guarantee anything. It amazes me that many smart executives expect that once a system is installed, the benefits should "just come". That same reasoning would have us install the latest version of MS Word on your computer, then sit back and wait for you to write the next Harry Potter novel!

4. Help your business counterparts understand the process, monitor the process and execute the process. In some companies (especially big ones), you might be amazed to learn that no one actually understands the end to end business processes. Departments become so specialized, that they only understand their jobs from their in box to their out box. They have no appreciation for what happens before the task reaches them, nor the affect that their work (if poorly executed) has downstream. This takes time, patience and coaching - words seldom used in technical I.T. job descriptions. Integrated systems are not very forgiving if the integrated tasks aren't performed properly. Transactions just stop.

5. Compensate your I.T. staff for obtaining positive business results. Make positive business outcomes into performance goals for your staff.

For example, the Purchasing Business Analyst might have a goal of reducing PO exception processing to less than 5% of all POs issued. Or perhaps should share a goal with Purchasing management to identify x% purchasing cost savings.

Your Payables analyst might have a goal that automated three way match processing should handle 90% of all payables transactions, or that prompt invoice processing should result in 100% allowable discounts.

Your Financial business analyst, might have a goal of shortening the monthly or quarterly close to x days. Or to automate all monthly journal entries.

6. Good I.T. functions still speak in terms of "us and them". Great I.T. departments speak in terms of "we". Once you've blurred the boundaries between business functions and I.T. support functions, you know you're headed on the path to Great.