Rudy Giuliani argued that the best way to fight crime is to fight the disorder that precedes it -- those quality-of-life crimes such as spraying graffiti, panhandling, breaking windows, littering and letting buildings crumble and decay. I think you can make a similar argument that the best way to improve ROI for IT is to fight the mental disorder that burdens IT's reputation -- those quality-of-mind crimes such as underinvesting, overinvesting and bad personal information-management behavior.
What leads me to this line of thinking is some work I've been doing with Hal R. Varian, dean of the School of Information Management and Systems at the University of California, Berkeley. While conducting focused research in the financial services market, we found the highest mental crime areas to be the following:
- Information opportunity: Determining where IT money should be spent.
- Application IQ: Spending the money on the right technologies.
- Information economics: Getting the best deal on the money we spend.
In recent years, the ability to purchase technology has run ahead of the typical organization's ability to extract maximum value from what it's been buying. The "whisper number" (the one no one likes to publicly acknowledge) for annual IT waste is around $75 billion. These are dollars spent yearly on failed IT projects. IT managers are certainly not blameless in this annual value sinkhole, but we frequently forget that for every dollar wasted, there were users -- let's call them "Suits" -- who were very close to the center, where choices were made and value was determined.
The unspoken dirty secret in IT waste: "It's not the technology. It's the Suits who are funding the technology." For the longest time, IT managers had a credibility problem with the business. But in reality, the inverse is true; the business has a credibility problem with IT.
John Adams, one of the political geniuses behind the Declaration of Independence, often wrote his much-loved wife, even during the darkest days of the American Revolution. In one note, he said, "We cannot guarantee success, but we can deserve it." The truly sad reality of the pregnant-with-opportunity age we live in is that most Suits don't deserve success from their investments in IT. They haven't laid the groundwork or done the homework necessary to develop good IT judgment.
The question facing IT leaders today is, What is the minimal obligation of IT to educate the Suits in the nontoxic or, at a minimum, nonwasteful use of information technologies?
Most IT shops have determined that they need do nothing more than train executives in the use of low-level desktop applications. This is the technology equivalent of a sixth-grade education. Technology literacy will become foundational to the economy of the future. Suits must know more about IT. IT leaders need to know more about what the Suits know and, more important, what they don't know about IT.
Regarding the technology literacy of executives, IT leaders need to determine the following:
- Things Suits currently "know" that they need to unlearn.
- Things Suits should know that they never learned.
- Things that accelerate the Suit technology-learning processes.
In advanced companies today, IT leaders are evaluating their peers on their technical competence. Your company should be doing it too.
Thornton May is a longtime industry observer, management consultant and commentator. Contact him at email@example.com.