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Can IT grow up? An interview with Ade McCormack

July 9, 2008

Ade McCormack is the author of The IT Value Stack, IT Demystified, and a columnist for the Financial Times advising business leaders on business-IT issues. He spent the first half of his in software development as a real-time software engineer/technical project manager.

Here, he joins Cognos Senior Writer, Kelsey Howarth, to discuss why the IT department matters and how it can teach an organization to hunt like a pack.

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Why IT teams have low self-esteem

KH: In your new book, the IT Value Stack, you write that IT suffers from low self-esteem, sometimes deservedly so. Why?

AM: The low self-esteem is due to the relationship between IT people and users. Often IT people feel put upon, taken for granted, and like ancillary workers that are not truly core to their businesses.

I believe this is sometimes deservedly so because the IT industry doesn't have a fantastic track record. IT departments haven't always managed expectations well and have set itself up for user contempt.

KH: You state that IT needs to grow up. How can IT become more mature?

"Like well-behaved puppies"

AM: Many IT departments today are like well-behaved puppies. At best, they do what they're told. The IT industry has a key role to play in business and, therefore, needs to move from obedient supplier to strategic partner.

I think only when IT takes its rightful place on the Board can we really say that the IT industry has grown up. It's only then that organizations can reap the full value of their IT investments.

KH: One of your many intriguing statements in the book is that most businesses don't know what business they're in. Can you explain?

AM: If you take a typical airline or bank for example, their competitive advantage lies in their brand and how well they can lever the information they have in their organization.

If I was running a major bank I would probably outsource practically everything apart from my IS function. If I was in the airline I would outsource all my planes, my ground staff, and air staff, and focus my attention and energies on the brand marketing team and IS functions.

Organizations are slowly starting to wake up to the fact that IT is not peripheral to their business, but actually is their business.

Going beyond IT-business alignment

KH: In the IT Value Stack you recommend, not business IT alignment, but business IT entwinement. How do they differ?

AM: Business-IT alignment has been a big theme for the last ten years and it hasn't really been successful. Unfortunately, by business-IT alignment I think most people are aspiring to, at best, getting their IT function to be a well-behaved supplier.

Rather than IT being a reactive function that essentially responds to requests generated by the users, IT needs to be sitting at the boardroom table. They have the technology that can change the business, what they need is the influence to drive it through.

The Value Stack explained

KH: What is the IT Value Stack?

AM: This book is based on my IT Value Stack methodology, which helps business leaders take control of their IT investments. The 7 steps in this model in order of adoption are:

• Strategy Entwinement
• Process Entwinement
• People Entwinement
• Technology Management
• Service Management
• Circulation Management
• Value Management

"The organization as a body"

KH: Lawrence Trigwell, Associate Vice President of Financial Services at Cognos, an IBM company, was a contributor to the circulation management chapter of the book. Can you define what circulation management is?

AM: It is the flow of data, information, knowledge, and wisdom in an organization that enable staff to make better decisions in an appropriate, timely manner.

If you think of the organization as a body, we are talking about the circulation of the lifeblood around the organization.

Poor circulation, as we all know, leads to all sorts of medical complications.

KH: That seems very similar to the Cognos viewpoint on performance management.

AM: There are some great similarities. Having digital dashboards and reports that help people deeply understand their organization and marketplace is a key aspect to circulation management and is critical to better business performance.

"It's like hunting as a pack"

KH: What are the main barriers to effective circulation management?

AM: The main barriers are people and politics. In small organizations, if we want to share information or knowledge we can just shout across the table.

As organizations get bigger they develop futile setups with chieftains who are protecting their own area and information.

Company leaders can forget that it's all about hunting as a pack. They must breakdown those barriers and force the flow of blood so that everyone benefits from what the organization knows.

Suffering from a weak heart

KH: You mentioned that some businesses suffer from a weak heart. Could you explain that idea?

AM: I see the IT function as the heart of the organization. You need the machinery in place to pump out the blood.

If there are weak controls within databases and knowledge repositories, the organization will have worse than no flow of blood but poisoned flow, where essentially the data, information, and knowledge is misleading.

Other benefits of good circulation

KH: You have mentioned a few major benefits to good circulation management. Are there a few others that are crucial?

AM: In this world of Enron, Parmalat, and more, corporate governance is extremely important. It is underpinned by having controls in your organization that are built into the IT systems.

Your corporate governance is only as good as your IT function. It will determine in some organizations whether the boardroom remains at liberty or gets to spend some time in jail.

Good circulation management will also allow decision-making, not just at the top, but at every layer of the organization. I want to see the clerk that processes your check when you walk into the bank have a display that resembles a fighter pilot consol.

They need to know who you are and what you need so they can become a consultative, engaged customer-facing sales agent.

I think you'll see that increasingly whatever organization gets their circulation management act together first and starts hunting as a pack will basically take control of their various sectors.