UK: DISINFORMATION TECHNOLOGY.

UK: DISINFORMATION TECHNOLOGY. - Is the gap between top executives and their IT managers narrowing? A survey, carried out by MORI for Management Today and Computer Associates, suggests there is still quite some ground to cover.

by Jane Bird.
Last Updated: 31 Aug 2010

Is the gap between top executives and their IT managers narrowing? A survey, carried out by MORI for Management Today and Computer Associates, suggests there is still quite some ground to cover.

George Bernard Shaw is reputed to have observed that Britain and the US are divided by a common language. Top executives and their senior IT subordinates don't have that problem - theirs is much worse. They have each spoken their own distinctive dialects for years, and communication between them not infrequently breaks down. They also tend to have different priorities and vastly different perceptions. 'IT people are ogres,' in the opinion of Robert Bischof, chief executive of Boss Group, the forklift truck manufacturer. IT people, on the contrary, think of themselves as 'demigods', according to Simon Hassett who is himself an IT manager, at Jackson's Bakery, Hull. What's more, says Hassett, IT managers 'look down on CEOs and MDs because they think these people know nothing whatsoever about computers'.

There are obvious dangers when functions clash to this degree. The divergence could be truly alarming if found within a single organisation, where everyone is supposedly co-operating towards achievement of a common goal. But just how wide is the chasm? Is it still true, for example, that most top executives are personally unfamiliar with fundamental aspects of IT? MORI's 'disconnect' survey sponsored by Computer Associates is by no means reassuring on this point. Almost a quarter of the sample of top managers - and more than a quarter of those aged over 45 - did not use a PC either at home or in the office although the great majority of the younger bosses (and almost all the IT managers, of course) are regular PC users.

Arguably, something that is not really understood is not readily controllable.

But does it matter in practice whether or not a top executive taps his own keyboard? Michael Frye, 51-year old chairman of engineering group B Elliott, has no computer on his desk but is unrepentant. What matters, he insists, is not possession of a profound practical knowledge of IT but an ability to ask the right questions. 'The most important thing is being seen to take an interest,' says Bischof, the German-born boss of Boss, who is also in his 50s. 'You can express it by having a box on the desk (which he does, while admitting that it doesn't get much use) or you can express it better in discussion.'

But that begs the question: is there sufficient communication between chief executives and their heads of IT? In paired interviews (where chief executives and IT managers working in the same companies were questioned), just over half the IT managers questioned said that meetings with top management occurred at least once a week, and a large majority thought the existing frequency was 'about right'. On the other hand, a substantial minority of IT people (15%) were not happy that they had enough access to those at the top, and felt that the two parties should get together more often. Only 4% of the top executives thought that more frequent meetings would be a desirable development. Furthermore, a majority of the IT managers reported that their input was solicited by board level executives either 'occasionally' or 'never'. Most top managers were under the impression that the IT department was consulted 'frequently'.

Presumably the basic purpose of such consultation is, or should be, to ensure (a) that IT is providing the organisation with the service it needs, and (b) that senior managers and others are fully aware of all that IT can do for them. The survey found top executives and IT managers in general agreement that IT had been 'successfully harnessed to business objectives'; also that the company derived good value from its IT investment. But while the great majority of top executives were satisfied that their fellow directors understood what IT could do, the IT managers themselves were a lot less sure on this question.

One doesn't have to look far for concrete examples. According to Terence Driscoll, MIS controller at Bentalls, the department store group, users all too often don't know what they want, or fail to recognise the scale of the technological problems involved. 'IT people understand how information is held in the computer, whereas non-technical people tend to think that you can wave a magic wand and all the information will jump out of the files in the exact format you want.' But there are faults on both sides.

Computer people 'speak a language that nobody can understand,' says Nick Butcher, managing director of the UK arm of couriers DHL International.

'We do talk in a techy way in the IT department,' Driscoll admits. 'You have to try very hard not to use jargon when talking to non-technical people.'

Maybe IT staff don't always talk to their customers enough. 'It's important to expose IT people to users,' says Judith Haste, systems development manager at Domino Printing Sciences of Cambridge, manufacturers of ink-jet printers. 'There is a general feeling that IT is necessary, but business managers feel they don't understand it. They need to see the changes, and the demonstrable benefits, that it can bring,' observes Haste. 'IT people have to justify themselves by demonstrating that the results are better when they are involved,' adds Steve Walker, information services manager at Tullis Russell, the Glenrothes-based paper company. On the management side, Butcher believes that, 'If IT people deliver business success, and show their technology to be relevant to business needs, business managers will be drawn to them.'

But it doesn't always happen like that. The survey found that top executives and their IT managers had rather different perceptions of IT's usefulness to the business. In paired interviews, top managers tended to value IT most as a means of improving operational efficiency, but only a minority thought that it made a strong contribution to cost saving. As a group, the IT managers were inclined to believe that their greatest contribution could be found in the area of customer service.

Barely a quarter of the companies in the survey bothered to measure return on investment. Jerome O'Hea, chairman of Colt, the industrial heating and ventilation group, reckons that while it may be relatively straightforward to calculate payback in the first year, this becomes progressively more difficult. 'I don't think we've been very successful at measuring it retrospectively,' he says. 'For example, some of the software we've installed on the marketing side has definitely increased our business, but it would be very hard to add it all up.'

The full benefits of IT are notoriously difficult to quantify, of course, since so much turns on individual judgment. Clugston Construction in Scunthorpe attempts to measure return on investment by looking at staff efficiency - as well as at the cost savings associated with production of on-site reports. 'Just the reduction in the amount of paper we produce has been a major benefit,' says managing director Stewart Tilley.

At B Elliott, IT investment is included in overall monitoring of return on net assets. Bischof of Boss advocates the comparison of existing IT costs with quotes from external providers. 'Also we cross-check with other companies in the same industry.' Less than one business in 10 among those taking part in the survey treated IT as a profit centre.

Bentalls is another company which makes no attempt to measure payback from IT. 'From a purely business point of view, we get away with murder,' Driscoll admits. As long as the board perceives that it's getting value for money it's happy, he says, although it might compare this year's figure with last year's and check on the general perception of users. 'But from an IT point of view we can innovate, experiment and carry out R&D without having to justify ourselves and keep looking over our shoulders.'

Innovation in IT was one more subject explored by MORI, and one which produced a large measure of agreement. A majority of the IT managers, and a very similar proportion of top executives, believed that their business had won competitive advantage - at least 'to some extent' - by applying IT in innovative ways. (However there was an even greater consensus rejecting the proposition that the business had ever been forced to react to innovative applications on the part of competitors, which suggests a degree of complacency, or perhaps bravado, over this matter.) Less than 10% of the paired sample were prepared to admit that the organisation had gained no competitive edge at all in the area of IT.

Frye of B Elliott is again disarmingly honest. It's easy to go too far with IT, he says. But he has his reasons: 'You might reduce manufacturing lead time from six weeks to one week and then find that you're spending two weeks on paperwork, so much of the advantage is lost'. For Clugston the issue is simple. 'The idea is not to have the most sophisticated IT system in the world, but to make a profit from construction activities,' says Tilley. Rob Painting, finance director of Keller Group, a London firm engaged in ground engineering, also believes that there are other considerations of more relevance to the business than IT. Besides, he says,'We have no need to be at the leading edge, because we are merely interested in historical data such as financial and contract information.'

Computer Associates' CEO Charles Wang is severely critical of such attitudes.

Any company which neglects the opportunity of applying IT in an aggressive fashion is likely to find itself at a disadvantage to its rivals, he believes.

Moreover the chief executive needs to be seen to be using IT effectively in order to set a good example. In practice, of course, in many companies and industries, the CEO is somewhat removed from the centre of IT action.

When MORI asked who carried overall responsibility for IT, around 10% of the top executives replied 'top management'. A quarter of the IT managers, and a slightly higher percentage of the top executives, named the head of finance or purchasing. A majority of both classes of respondent located responsibility for IT within the IT department. But whatever his or her department or function, in only half the companies in the sample did the manager in charge of IT sit on the board - which normally entails ready access to the CEO. The younger the age of the chief executive, incidentally, the greater the manager's chance of reaching the boardroom.

Approximately two-thirds of the companies covered by the survey have some form of IT strategy group or committee - although slightly more top executives than IT managers seem to be aware of its existence. The person most likely to be chairman of this body is the finance director, followed (if IT heads are to be believed) by the managing director, or (if the chief executives are correct) by the IT director. In view of this discrepancy, it's not wholly surprising that there should be some misunderstanding among CEOs and their IT managers about the extent of outsourcing, for example, also about standardisation on particular manufacturers or suppliers.

It's evidently not unknown for the head of IT actually to be denied membership of his company's IT strategy group. Numbers of chief executives are openly opposed to the appointment of IT specialists as committee chairmen or team leaders. IT people are too influenced by technological factors, they feel, to see things from a business view-point. B Elliott, for example, has established multifunctional teams to examine processes such as distribution, manufacturing and product development.

Each team includes a representative of IT, but 'having an IT person as leader doesn't work', Frye insists.

Yet a lot of IT people at least recognise their limitations and would like to correct them. The IT managers in the survey overwhelmingly agreed with the notion that 'organisations would benefit if IT managers had more business training'. They gave even more support to this proposition than to its obverse: that 'organisations would benefit if the CEO had more IT training'. (The top executives were cooler to both ideas.)

So what conclusions do MORI experts reach on the basis of these findings?

'Top and IT managers are divided about the extent to which each of them understands the other's perspectives,' comment the MORI researchers. They, however, feel that it is less IT managers than their superiors who should be enrolling for development courses. 'There seems,' they conclude, 'to be a slightly greater need to bring top managers up to speed about IT, rather than IT managers about business.'

The survey findings are based upon 140 telephone interviews conducted by MORI in the early part of the year.

70 top managers and 70 IT specialists from the Times Top 1000 database were interviewed. Of the 70 interviews in each group, 46 were 'paired', that is, both CEO and IT specialist were interviewed from the same organisation which means differences of opinion between them are not subject to the usual sampling tolerances.

Copies of the report are available free from Computer Associates on 01753 679679 or ukmkpg@cai.com

1. HOW OFTEN DO CEO AND IT DIRECTOR MEET?

% of total paired sample

Top executives IT managers

Daily 26 7

Weekly 39 48

Monthly 26 35

Less/never 7 9

Don't know 2 2

2. HOW OFTEN IS IT INPUT REQUIRED BY BOARD?

% of total paired sample

Top executives IT managers

Frequently 61 46

Occasionally 37 50

Never 2 4

3. HOW IS IT IMPORTANT?

% of total paired sample

(Score = 8 or more out of 10)

Top executives IT managers

Efficiency 74 57

Customer service 67 65

Profitability 54 41

Cost saving 39 39

Source: MORI

4. IS IT USED TO GAIN COMPETITIVE ADVANTAGE?

% of total paired sample

Top executives IT managers

To a greater extent 28 24

To some extent 67 67

Not at all 4 9

Don't know - 2

Source: MORI

5. DO YOU HAVE AN IT STRATEGY GROUP?

% of total sample

Top executives IT managers

Company has strategy

group 67 59

It is chaired by:

MD 9 11

CEO/chairman 1 7

Any top management 10 18

Financial/ purchasing

director 24 14

Other director 7 4

Any other director 31 18

IT director 13 7

IT manager 7 10

Head of IT - 4

Any IT 20 21

Other/ don't know 5 -.

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