Six IT Decisions Your IT People Shouldnt Make

April 22, 2006

Team KBS
-

Dwight Abouhalkah Kathy Copeland Aaron Lian Tim Stout Pete Wilhelm

Adapted from the article written by Jeanne W. Ross and Peter Weill, HBR, November 2002

Senior Managements Six IT Responsibilities

Strategic
How much should we spend on IT? Which business processes should receive our IT dollars? Which capabilities need to be company-wide?

Execution
How good do our IT services need to be? What security and privacy risks will we accept? Whom do we blame if an IT initiative fails?

What is the business value of IT?

Many executives dont know. Inherent disconnect between executives and IT.
I cant manage what I dont understand.

In successful firms: executives assure that business strategy drives the level of IT required.

#1

How Much Should We Spend on IT?

How much is enough? Does benchmarking help? The 3% rule. Define the business strategy. Define the strategic role IT will play in the organization. Spend the resources required to fulfill the objective. Red Cross NBCS: Delivering on individual projectsbut with no strategic platform.

#2

Which Business Processes Should Receive our IT Dollars?

Prioritize initiatives and projects Consider the strategic significance

Implement simultaneously Sequence projects

Hershey Foods Delta Airlines Tosoh Quartz ERP System

#3

Which IT Capabilities Need to be CompanyWide?

What should be centralized and standardized?

Company culture Specific needs Cost control Business unit autonomy

Trade-offs OHSU Electronic Medical Records (EMR)

#4

How Good do our IT Services Really Need to be?

Cadillac or Buick? Do we really need gold-plated functionality? Unused features Total cost of ownership
Initial cost Annual operating cost Lost revenue OHSU - EMR

#5

What Security and Privacy Risks will We Accept?

What level of protection or openness do you want? What are you willing to spend? Will it limit functionality or convenience? Hassle factor! Yale Privacy Example ESCO Security Examples

#6

Whom do We Blame if an IT Initiative Fails?

Finger pointing Wheres the real problem?

IT group The non-IT executives management of IT-enabled change

Sponsorship Ownership of outcomes

Summary

Senior executives cant abdicate responsibility for these six IT decisions Collaborate Involve the right people
BOISE (PeopleSoft & MAXIMO)

The executive suite

Questions ??? Comments .. Arguments @#*& Conclusions !!!