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FBA - CIO
Fundamentals of Business Administration
Chief Information Officer
• Lecture (90 min) on postgraduate specialisation study for CIOs
• Faculty of Economics, University of Zagreb
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How to make an IS project succeed?
World experience:
HIGH LEVEL OF FAILURES• This indicates that, very roughly, something like one-fifth to one-quarter of
industrialised country IS projects fall into the 'total failure' category, something like one-third to three-fifths fall into the 'partial failure' category, and the remaining minority fall into the 'success' category.
– (Failure, Success and Improvisation of Information Systems Projects in Developing Countries, RICHARD HEEKS, January 2002, Institute for Development Policy and Management, University of Manchester, http://unpan1.un.org/intradoc/groups/public/documents/NISPAcee/UNPAN015601.pdf
– 27.03.2008
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Ireland included!
• When you stand back and look at the landscape, the typical outcome of a major change programme underpinned by the introduction of new technology is that there's a 50 per cent chance the project will fail outright, a 40 per cent chance that the project will be delivered late and a ten per cent chance that everything will be okay and within budget,…
• Irish IT projects 'have just 10% success rate' – Feb 22, 2008, 14:37 PM
• http://www.qas.ie/company/data-quality-news/irish_it_projects_have_just_10_success_rate__903.htm
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A comparison with other activities
• Percentage of buildings that collapse in construction or use?
• IS development and management are complex multidisciplinary activities
• If you really wish to succeed, everything complots towards your success (old Chinese proverb?)
• Many stakeholders have contrary motivation (but would not admit it openly)!
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Management (1)
• Delegation to some unappreciated computing insider
• Incompetence – no time for interview, – not to notice my ignorance
• Pay to get rid of any involvement• Not really wishing to succeed
– local optimum lost – peace and privileges due to lack of information
• Underestimation of computing profession– only understanding of business goals counts– IT staff are “Fachidioten”
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Management(2)
• IS is a service to bookkeeping• Nepotism
– my best man / neighbour's kid can solve it
• Enough to buy hardware• If I have money, I shall buy:
– the best – the most expensive that exist + foreign consultancy
• foreign consultant often sent for punishment to Croatia
• A question for the manager: Why don’t you replace yourself with some best of breed, in the first place?
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Management(3)
• Take a WB loan and pay everything to foreigners– keep only the paying back of the loan
• Demand completed quick solutions, install immediately and ruin everything
• After having spent so much for computerisation, next 10 years I do not give a cent
• I don’t want to pay for maintenance – especially not if performed via Internet, when I do not see
them toiling
• Ruin the firm and sell the real estate – Transition
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Management(4)
• Initiate a useless project to demonstrate your activity• Pretend to do something• Buy something senseless and claim it is The Best
World Practice• Order some project just in order to get a percentage• Buy the IS solution strictly in accordance to the
Public Procurement Act – Try the same with wine!
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Users (1)
• IS controls us• Revamp the data for the computer• Colourful interface is what counts most• Reporting is most important and the development
should start there• I wish it all in a single table• No optimisation, please• I shall put it into my copy book and input it later• I haven’t got time to bother with computers,
someone shall enter the data afterwards
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Users (2)
• Do not mention exceptions• Do no testing, say it’s OK• I cannot do it because I have never done it• I don’t understand a bit
– and I don’t even try to
• Anything becomes a serious problem• We are overloaded and we haven’t got time for you• Every employee needs a personal aide to work on
computer• Everything was better before
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Developers generally
• Fighting the ever changing technology
• Trying to resell something existing– Hammer & Nail
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In-house Computing
• Do not show your competency – more work, same salary
• Send me to all imaginable courses – to get a better salary somewhere else
• Buy me the newest and the best SW tools – to get a better salary somewhere else
• Let the user precisely specify his/her requirements – If s/he knew, would be a computing professional
• Implement literally as the user wishes– failure assured, no bothering afterwards
• Users are stupid– if so, why don’t you exploit the difference
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Outsourcers (1)
• Attractive presentation is most important• SW for petrol blending is appropriate for the railway timetabling• Sell at highest price to be appreciated by the user, and give him
a percentage • Learn by heart many abbreviations, standards and buzzwords• References
– State your principal’s references as your own – Failed project put into your reference list
• maybe no one will check
• Computerise exactly the status quo
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Outsourcers(2)
• Let the user sign the SW specifications, and later let him sign the annexes
• Let a CASE tool generate the application and do not improve the ergonomics – that is how the computer works
• Ignore the user’s suggestions and objections• Maintain only when you are forced to• While mending something, spoil something else
– not to be called too often
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Outsourcers(3)
• Send your inexperienced programmers to practice• Do not improve the business processes
– much effort, no reward
• If the response is slow, let the user buy stronger HW– do not improve algorithms
• Best user is who paid but never uses
• We bring you the best (world) practices & solutions– but maybe not applicable to me?
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Wrong conclusions Why is no manufacturing profitable (In Croatia)?
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Role of the Computing Department Positive view
• From accounting service it has become an important competency factor
• Standard applications – can be bought – outsourcing
• Specific applications – develop by your own, – or under your control
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IT Committee on the Company Level
Competent and representative body of high level– Plan– Budget– Priorities– Rebalance
else:– Contradictory requirements– Priorities unknown– Ad hoc priority change– Independent, incompatible IT acquisition
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Chief Information Officer (CIO-1)
• New CIO becomes leader within the inner top
management circle• Technology is not enough• Using IT make the company unique on the market• Competitive advantage
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Chief Information Officer (CIO-2)
• Means :– Technology:
– cut the costs, – improve efficiency through
• integration • automatisation, • standardisation
– Agility:– Management of speed, scope, costs and risks of change– Balance of change requirements with change capabilities
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Chief Information Officer (CIO-3)
– Information:
– Business insight and understanding to act under changed circumstances
– Innovation:
– Presenting on the market new ideas using comparative advantage and capabilities and developing new ones
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Chief Information Officer (CIO-4)
• 10 priorities (Gartner):1. Understanding the essence of environment
2. Produce a vision how can IT contribute to success
3. Formulate and explain the expectations of IT-based company
4. Devise an understandable and appropriate IT management
5. Merge the business and IT strategy
6. Build a new IT organisation, to be elastic and more focused
7. Develop and maintain a high performance for IS
8. Manage the new company and IT risks
9. Lead, not only manage
10. Transfer the information about your IS using business language
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Chief Information Officer (CIO-5)
Desirable competences:• Understanding the business organisation, policy and culture
within the company,
• Commercial behaviour,
• Understanding and analysis of competition,
• Leading, in-sourcing and building of trust,
• Strategic thinking,
• Leading, delegation, development,
• Team building,
• Influence and persuasion,• Out of 25 competencies, CIO must exercise 24 of them, to more or less extent.
The only one not applicable for CIO is Design and development of applications.
• It cannot harm of s/he had been doing it, but should not continue with it as CIO.
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Other functions
• Chief Information Security Officer (CISO)• Team for reaction to security accidents• Business processes• Business intelligence• Data mining• Balanced scorecard• Project management office
– Project oriented teams
– Support centre• Can be virtual
• Stimulation– Money
– Professional advancements
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Change management
• It is natural to resist change– Mass
– Magnetic field
• Trade union objects any change requiring workers’ efforts– Opera:
• Soprano and Tenor are willing to, but the Baritone does not allow them.
– Union struggle:
• Management to workers: I demand from you everything, I give you nothing in return
• Trade union to management: We demand everything, we do not offer anything
• Solution: A compromise
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Mangers’ and professionals’ attitude towards change (1)
•But what ... is it good for? –Engineer at the Advanced Computing Systems Division of IBM, 1968, commenting on the microchip.
•640K ought to be enough for anybody. –Bill Gates, Microsoft CEO, 1981
•There is no reason anyone would want a computer in their home.–Ken Olson, president, chairman and founder of Digital Equipment Corp.,1977
•Everything that can be invented has been invented.–Charles H. Duell, Commissioner, U.S. Patent Office, 1899
•I think there is a world market for maybe five computers. –Thomas Watson, chairman of IBM, 1943
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Mangers’ and professionals’ attitude towards change(2)
•I have travelled the length and breadth of this country and talked with the best people, and I can assure you that data processing is a fad that won't last out the year.
-The editor in charge of business books for Prentice-Hall, 1957•This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.
– Western Union, internal memo, 1876•Who the hell wants to hear actors talk?
– Harry Warner, one of Warner Brothers founders, 1927
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Resistance to changeHartman, Sifonis & Kador: Net Ready, Hill-McGraw
What to do when you discover that you are riding a dead horse (instead of quietly replacing it):
• Change riders.• Buy a stronger whip.• Harness several dead horses together for increased speed.• Emulate the best practices of companies riding dead horses.• Outsource the ridership of the house.• Affirm that “This is the way we have always ridden this horse”.• Change the requirements, declaring that “This horse is not dead”.• Perform a cost analysis to see if contractors can ride it cheaper.• Promote the dead horse to a management position.• Have the lawyers bring suit against the horse manufacturer.• Put out a news release that, in unlikely event the horse is dead, it was dead before if
ever came to company.
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Success
•High and proper motivation•Commitment of the highest management•Competent IS IT team•Restructuring (gradual, sustainable)•IS is a restructuring tool•ABC, not Big bang•Evaluative•Empathy and sympathy for the user•Reward accordingly to success, (even) own IT employees
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Citations
•The most damaging phrase in the language is: We've always done it this way.
–Grace Murray Hopper, American computer scientist•No pressure, no diamonds.
–Mary Case, American screenwriter•Be a yardstick of quality. Some people aren't used to an environment where excellence is expected.
–Steve Jobs, Apple CEO•The key to successful leadership is influence, not authority.
–Kenneth Blanchard, American management expert•No foreign policy - no matter how ingenious - has any chance of success if it is born in the minds of a few and carried in the hearts of none.
–Henry Kissinger, American politician•A leader is best when people barely know he exists. When his work is done, his aim fulfilled, they will say: we did it ourselves.
–Lao Tse, Chinese philosopher•Whenever an individual or a business decides that success has been attained, progress stops.
–Thomas J. Watson, IBM president
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When we have an IS
•It cannot be proved that investment in IT pays-off (ROI)
–Does electricity connection pays-off?–Does a company need WC? (Funky Business)
•Job never done.•Overall costs do not diminish, nor the life becomes easier (expectations rise)•More knowledge, work and money is required•Competence and quality grow
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Acknowledgement
Collection of citation I owe to Vedran Mornar
