As the economy slows, stock valuations sink and pressure mounts to reduce IT spending, it's a good time to understand the health of your IT assets. There are warning signs that suggest that an IT department isn't making the strongest, most cost-effective contribution to your business. But a rapid triage can help identify weaknesses and determine your company's short- and long-term needs.
As with any triage, the first step is a visual inspection. Look at what's on everybody's desktop. When you see Windows 95 and 2000, Excel and Lotus 1-2-3, or ThinkPads and 486s with 250MB hard drives, you can assume that systems can't effectively share information.
Warning signs that your IT assets might be unhealthy include the following:
-- IT spending focuses on the needs of an individual department rather than the enterprise.
-- Decision-making for IT purchases is decentralized; the CIO and executive committee don't have a shared strategic vision.
-- Projects operate in a vacuum, are consistently over budget and miss deadlines.
-- Less than 30 percent of the application development budget goes to new development projects.
-- There's no standard enterprisewide infrastructure or well-structured data environment.
-- Technology and applications go back decades and haven't been consistently renewed and retired.
-- IT expenditures boom and bust, showing inconsistent reinvestment.
Look to your vital signs: business strategy, technology and funding. Map your business strategy against your IT reality and see if they match. Here are examples of five categories:
Business context: Does your CIO have a seat at the senior management table? Senior management must share a centralized IT vision. Lay out the state of your company's current performance, organization and strategy and ask, "Do we have enterprisewide themes that focus on areas such as customer service, supply-chain management and employee connectivity? Is there tight linkage between these themes and overall corporate initiatives?"
Applications portfolio: Identify current systems and projects and assess their quality. Are applications rigid and compartmentalized? Do you have to re-enter basic information, such as customer addresses, for different applications? Do your priorities relate to your business themes?
Technology infrastructure: What are the kinds of technologies in your organization, from mainframes to desktops, and the number in each category? Do they have difficulty interacting, and do they cause problems across other systems? Who selects new technologies, and how do they make the selections? Are they consistent with the business context and the applications plan?
Organizational focus: When people say, "We're short of IT talent," they're missing the real problem. The trouble comes from spotty leadership by business executives and CIOs. Do you have leaders capable of setting a direction, staying focused and making an exciting, energized environment? You can't leave this solely to human resources. Your human resources department can help, but it's the job of the CEO and CIO.
Governance: How are technology decisions made? In most organizations, they're tactical, fragmented and low in the company. You need the right decision-making framework to get funding and keep focused. A senior leadership board that shares the vision can help you sort through sequencing and funding.
Connect the dots between business context, application portfolios, technology infrastructure, organization and governance (BATOG). If your company has become bogged down by complexity, is tied to legacy systems or is compartmentalized, chances are that systems, not business objectives, are driving your technology decisions.
Diagnosing the health of your organization using this framework usually takes about 90 days. Organize your IT vision around BATOG, discuss the current reality with the senior team, and engage it in creating a three-to-four-year plan with quarterly toll gates to ensure that you're on track. You need constant calibration because things change, such as management, mergers, economic conditions and new technologies. This framework can act as a compass in rough seas. Without it, I can't imagine how an IT organization can tell which end is up from year to year.
Feld is president and CEO of The Feld Group, a technology leadership firm in Dallas. In this role, he's the acting CIO at First Data Resources in Omaha and has served as CIO at Delta Air Lines Inc. in Atlanta. Contact him at Charlie.Feld@feldgroup.com.