One of the primary goals of Accenture's IT strategy at the beginning of its implementation was to think about IT as a "business within a business." There were several key points around which this strategy was designed, such as utilizing C-level executives from multiple departments to make IT-related decisions in line with organizatonal goals and tailoring programs tightly to end-user needs. Furthermore, Accenture wished to line up IT as a service provision center versus a cost center.
Accenture's initial perspective on IT seems to empower and provide flexibility for IT to be an effective and critical part of the organization's overall operations. Do your companies adopt the philosophy of IT as its own business entity within the organization? If so, how does this set-up affect how IT operates within the organization? If not, do you think this perspective would help or hurt your organization?
Pam and I interviewed our CIO last week. I can see similarities in our structures but I believe we shift our paradigm a bit from a business perspective. Technology is invited and should sit at all strategic sessions but our view is that Tech's primary purpose it to enable business to achieve the business goals. While we empower our Tech department, Tech's organizational goals and decisions are made to support business goals. However, our user (staff users) utilize a very broken over processed help desk located in San Jose and Chennai.
ReplyDeleteSometimes it seems like the tail may be wagging the dog in your description. Either way, it is essential to have Tech's voice in the mix during planning sessions. So, we're just like you but completely different :)!
My company has a somewhat "multiple personality" concept happening with IT. The CIO sits as an "advisor" on the Executive Committee but generally doesn't bring signficant strategic initiatives to the table. And this is interesting to me who actually runs a business providing technology consulting services to our clients. There must have been some of this same interplay with Accenture and as a matter of fact, most of their "out sourcing" really was to a captive group that actually were Accenture employees...just employees that supported client-IT department outsourcing.
ReplyDeleteIn my experience, the CIO position is the least consistently seen as strategic among all the C-suite positions. It seems to be highly dependent on the effectiveness of the individual in the role to establish and maintain influence within the organization.
I like a business within a business concept... accountability, authority and responsibility tend to be aligned in this manner. The one follow-up question I'd have is... "Is it really a business in a business if it doesn't have competitors?"
In response to Dave's question and speaking as a monopoly (you have no choice other than take power from my company, unless you make your own on site), yes it is a business.
ReplyDeleteThe interesting part about the Accenture transition was that the transition of the IT department actually was to transform how the business utilized IT. Instead of an allotted budget and no external business involvement, Accenture went to a more empowerment model allowing the business to effectively utilize IT thus making IT successful within the organization. Eliminating IT priorities driven by politics and measuring and meeting SLAs, IT's need would have more visibility. The next step to that is of course the C-level executive financial investment to IT based on the value of the project. I see this as a transformation of how IT interacts with the rest of the business, forcing accountability of the other business units. While BML Technology still has a cost center, the Technology department does not simply develop software, we use deep intellectual property and business knowledge of financial services to build products.
ReplyDeleteLoyola's CIO did a nice job presenting to our class last week. I also had the opportunity to interview her following the class. I did get the sense that technology at Loyola is a "business within a business" but not yet a strategic partner. While there appears to have been great progress made, there is a lot of jockeying for position/acceptance. A lot of that has to do with educational institutions being very adverse to change and when one looks at the speed of technological change the two cultures don;t really mesh that well.
ReplyDeleteThe one thing that Loyola is considering that Accenture did was outsource. The CIO explained that it is a lot easier to outsource programming to someone working out of their home somewhere around the country than to find office space and pay them a salary and benefits.
I just spoke with our CIO today and gained a new perspective on IT as a business. Currently we are integrating the Wachovia legacy systems with ours, designing it around customer needs, demands, etc. It is a business focus rather than cost center. However, from my perspective in a much smaller capacity we operate as a cost center only. We focus on IT cost vs. revenue but in a very skewed fashion. So while I believe IT is looked at as a business from the top, that approach does not cascade throughout lower levels of the organization. I'll hedge my bets on that changing as we gain direction from regulators and customers.
ReplyDeleteTwo days ago I met with our CIO of our corporation. It was very helpful to gain that 50,000 foot perspective. Although we are not there yet, we have made much progress in moving IT from a simple business unit to something that is integral to everything we do. It seems in healthcare, there is much energy being spent to adopt the electronic medical record throughout our business. Mostly stimulated by healthcare reform. We too outsource some services, and some we keep. IT does have an important seat at the highest level of management.
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