Golf and dusfunctional business relationships

Dysfunctional relationships aren't restricted to family and marriages; they are a part of business life too.

Speaking to IT executives last week they invariably described their organizations as the orphan child or the middle child in the business family. You know that awkward middle child desperate for attention, never destined to be the golden boy or girl of the corporate family?

Let's face it: IT is seldom invited to participate as full board members, is often excluded from the decision-making process and is commonly frowned upon for being a cost rather than a driver of change.

In this corporate hierarchy, the finance department would be the eldest or first child, the one that thrives on responsibility.

We can all guess who the spoilt, youngest child is that attracts all the attention. Yep, you guessed it, the sales and marketing department.

Like all relationship problems the answer lies in effective communication. Analysts keep reminding us that the successful IT manager of the future will increasingly be managing external relationships and will be adept at juggling multiple suppliers.

Put simply, the IT manager of the future will develop relationships inside and outside the organization, exert influence and be an effective negotiator.

But according to an IT executive at one of Australia's largest enterprises (who shall remain nameless), business units still have no real appreciation of the amount of support needed to run IT.

He said business units have great expectations that are shaped by external service providers on the golf course.

Keen to win more business, these external service providers always oversell their capabilities.

With fixed budgets, the only way an internal IT shop can win against external competitors is through the introduction of a charge-back system. Gartner analyst Steve Bittinger says without a charge-back system the rest of the organization expects unlimited demand for limited supply.

Moreover, a charge-back system injects some realism into the relationship by setting boundaries.

Bittinger says the CIO has to consciously put information in the hands of the business units that compare internal IT with service providers. This information should include set metrics and benchmarks.

"Use information from tenders and use various benchmarks, but don't look at cost alone - there are multiple dimensions of value," Bittinger said. Remember external service providers can leverage huge economies of scale, so nobody wins if you assess IT at a commodity level.

In-house IT units have two great advantages. Firstly, they are always going to have a closer relationship to the business unit than any external provider (well, we hope) and internal units are not under pressure to make 20 to 30 percent profit margins for shareholders.

So next time your CEO is on the golf course and he is with a vendor delivering his "cheaper, better, faster spiel", make sure you are not forgotten.

Arm your CEO so he can reply by simply saying: "I have benchmarks in place that let me know how my IT unit stacks up."

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