The IT expert shouldn't be treated just as a "techie". He should be part of the central management group, bridging the cultural divide.
John Drinkwater knows just how horribly wrong an It project can go. As director for group information at Rank Xerox, he has spent the last 18 months watching the company's pan-European logistics system run hugely over-time and over-budget. "It should have been delivered last year as part of a $53 million project. Instead of which, we are millions overspent and have nothing to show for it," he says.
Drinkwater was recounting his experiences at a recent information technology debate at Cliveden, the luxury hotel, which was once home to the Astor family. The debate, sponsored by Management Today and accountants, KPMG, centred on the question of the perceived culture gap between the chief executive of a business and his head of IT. Drinkwater is not the only senior executive disillusioned. Runaway projects which incur extra costs and long delays while failing to deliver business benefits are widespread.
Much of the difficulty stems from the gulf between the technology director and the chief executive, says Nigel Horne, head of IT practice at KPMG. "The chief executive is not interested in IT but on its value to the business". Meanwhile, the IT director feels he is treated as a "techie" and not involved in the business, reckons Horne. "The IT director has to meet increased demands for flexible and responsive systems on a reduced budget, while individual departments are allowed to buy their own PCs and pollute the corporate database by inputting their own data."
One solution is the creation of so-called "hybrid managers". These are individuals who have skills in technology and business so they can bridge the cultural divide. Such hybrids are being created at National Power where John Handby is director of IT. His aim is to encourage business high-fliers to gain an understanding of IT departments on their way up the company ladder.
But the mere existence of such hybrids in British industry is not enough to solve the IT crisis. Top level management control is crucial. "They got what they paid for at Rank Xerox because they didn't take the time out to find what was happening," Handby says.
Drinkwater agrees that the problem was lack of control at the highest level. "Users have been kicking us to death over what has or hasn't been supplied, and the project manager is coming at us like a rottweiler. We've killed ourselves by not having change management." One mistake he admits was that they kept on trying to give the users what they wanted. "If you adopt this approach you never finish a project." He is prepared to pull the plug if the system is not ready to go this summer.
The sheer size of computer meda-projects is often key to the problem. Wherever possible, they should be broken down into bit-sized lumps, advises Handby. At National Power he aims for tasks that can be achieved within six months. Another common error is making promises that cannot be met. Do not create false expectations, warns Kenneth Coppock, Cable and Wireless's director of corporate and management accounting.
Another strategy is to avoid customised software; go for off-the-shelf-packages. Only customise the 20% that is key to your competitive advantage. Some organisations have separated out computer operations to form an independent business centre providing a service to the other business units. Others have gone further and outsourced almost all their computer operations. There is no evidence as yet that the chairman needs to be a computer boffing. Only one of the 12 executive directors at J Sainsbury has any knowledge of IT, yet it has been a world-leader in the application of technology to the supermarket industry. Ian Coull, Sainsbury's development director, says: "Our success has been based on creative tension, knowing where we want to be in five years' time and finding out how IT can get us there."
What matters is that IT experts should be part of the central management group, reckons Wynford Evans, chairman of South Wales Electricity Board. "They need to be privy to the bulk of the thinking so that they can contribute to it." When that happens, IT has a unique opportunity to be a bridge. Indeed, the IT director may have a wider knowledge and understanding than anyone else in his organisation.