BUSINESS DISCONTENT WITH INTERNAL IT ORGANIZATIONS IS GROWING (AND VICE VERSA)

In our recent meetings with clients, we’ve detected a stronger-than-usual malaise with their organizations’ current processes for prioritizing and executing IT initiatives. Granted, there has always been a healthy tension between what the business needs and what any corporate IT organization can deliver. Discontent on the part of the business is not new. There are always many more projects that business executives want and need than there are resources to do them. But the current level of discontent among customer-centric business executives is growing. Many of today’s business execs feel that they are unable to adequately influence the IT prioritization and decision-making processes. They also complain that they don’t have enough influence over, and visibility into, architectural decisions that are being made that will impact the Quality of Customer ExperienceSM.

Increasing Discontent from Both Business & IT Management

Let’s take a closer look at some of the symptoms of the current disconnect between business and IT. Then we’ll offer a few suggestions gleaned from people who have lots of experience dealing with some of these issues (and the arrows in the back to prove it).

BUSINESS EXECS’ LAMENTS. Here are some of the issues that we’ve been hearing from the customer-centric business people we work with in a number of large organizations:

* Our IT department isn’t end-customer-focused. It takes them much too long to make changes in functionality that negatively impacts our customers’ experience.

* Our IT organization does an okay job of managing our internal operational applications (accounting, finance, manufacturing, etc.), but doesn’t have the skills needed to rapidly develop and evolve our customer-touching Web-based and cross-channel applications and infrastructure.

* Our IT organization doesn’t give us enough visibility into, or control over, the architectural decisions and trade-offs they are making. These decisions impact our customer experience. We should have more say in them.

* Our IT organization is incented to deliver projects to business units without coordinating or leveraging applications and services that should be reused across projects.

* There are major projects that we just can’t seem to do--customer databases, product databases, single sign-on, etc. We’ve already tried to get these done three or four times in the past 10 years. But either the attempts failed, or they fell off the priority list.

* I no longer have the option of doing my own IT development and/or of managing my own outsourced projects. I have to go through our IT organization. They make decisions that I have to live with, and I don’t like the ones they’re making.

* The IT analysts who do requirements gathering and process design don’t know how to drive those requirements from our end customers’ point of view. So, we wind up with “business as usual” incrementalism, rather than transformational business processes and designs.

TECHNOLOGISTS’ LAMENTS. Here are some of the issues that we hear from the IT side of the house:

* We want to organize our IT projects around our business clients’ needs, but we don’t want them telling us how to do our jobs. We want to be responsive, but we can’t meet schedules if requirements and priorities keep shifting. We need them to sign off on their requirements and let us deliver to those requirements in bite-size chunks.

* We don’t want to “roll our own” applications--we’d much prefer to rely on commercial off-the-shelf (COTS) software. Yet we find that the business demands a huge amount of customization--that makes the COTS investment and maintenance very costly.

* Our business users don’t understand that we now have a huge amount of high priority work that has to get done around compliance issues--Sarbanes-Oxley, HIPAA, Graham-Bliley, etc.

* We want to take a portfolio-management approach to our IT development. We want to ensure that we have a good mix of risky and not-so-risky projects and of business applications and infrastructure projects. We want the business to help structure the portfolio priorities, but then we need time to execute on that portfolio before they change the mix again.

* We’re lacking a business architecture from which we can drive our IT architecture. It would be great if the business leaders would give us a few visionary initiatives that we could drive towards, instead of constantly playing catch-up and trying to second guess where they’re taking the business strategically.

* We need to organize in small self-managing teams in order to be effective and efficient; these teams need to deliver “chunks” of functionality; yet keeping these chunks coordinated within a larger context is challenging.

* We want to be able to use the best approaches from iterative/agile development processes, but we also want to use offshore development--communicating our changing needs throughout the iterative process is tricky at best when dealing with a distributed development organization.

* We want to use iterative/agile development vs. traditional waterfall-style development; but we need to do time-consuming detailed design for the big infrastructure pieces, such as a complete design for the database before we build it. Nobody is willing to give us the time or the budget to do these time-consuming design activities.

Disconnects and Finger-Pointing

As you can see by the two litanies of issues on both sides of the house, there’s a lot of frustration building in both the business and IT camps. These frustrations are slowing companies’ attempts to redesign their customer-impacting applications and infrastructure.

WHAT’S CAUSING THE CURRENT PAIN?

Corporate IT Is Optimized to Run Internal Operations

In the majority of the organizations we’ve observed over the past several years, corporate IT is aligned to support the operations of the business--not the needs of the organization’s end customers. IT runs finance, accounting, ERP, CRM, sales operations, contact centers (which are being outsourced), data warehousing, sometimes HR (which is increasingly outsourced), email, networking, the data centers, the corporate Intranet, and all other operational systems. Typically, there are different groups responsible for developing or customizing applications, for deploying applications, and for running and maintaining operational applications and infrastructure. These development groups are typically organized around projects and deliverables. The operations staff is typically organized around platforms.

If your organization has highly domain-specific areas of expertise--such as drug discovery or oil exploration or chip manufacturing, commercial software development, engineering design--the chances are good that these expertise-specific IT shops are kept separate from corporate IT.

Customer-Direct Applications Typically Have Not Been Handled by IT

Over the past decade, we’ve all witnessed the emergence of a genre of applications designed to support direct customer interactions. These customer-direct applications include Web Sites, e-commerce sites, customer portals, Interactive Voice Response systems, kiosks, and ATMs, among others. Often, the IT groups responsible for the design and delivery of these customer-direct applications were separated from corporate IT, given their own budget and purview, and placed in close proximity to the business units responsible for setting priorities and direction. That worked pretty well.

However, the customer-direct applications infrastructure and processes often lacked the controls and security required by the corporate IT organization. Web applications, in particular, were developed and evolved quickly. Time-to-market took precedence over quality control.

Yet Customer-Direct IT and Corporate IT Are Merging In Many Organizations

Since the dotcom bubble burst in early 2001, many companies have been merging their customer-direct operations into their corporate IT organizations. There are three good reasons for this...