Review: IT Is Too Important to Be Left to You
The prose is painfully dry.
IT Governance: How Top Performers Manage IT Decision Rights for Superior Results
By Peter Weill and
Jeanne W. Ross
Harvard Business School Press
320 pages, $35
The prose is painfully dry. The points are understated. And it's not
the sort of book you can skim and still glean most of the arguments. None of that matters. What the authors, members of MIT's Center for Information Systems Research, have done here is call for—and then show how to create—a holistic way to manage information technology.
This is not a theoretical exercise. The authors' framework is the result of studying what works and what doesn't when it comes to IT at more than 250 companies. And the differences between companies can be downright shocking. "Our research," the authors write, "shows that top-performing enterprises generate returns on their IT investments up to 40 percent greater than their competitors."
What do the best companies do differently? They start with the premise that IT is too important to be left to IT professionals. That means they link IT closely not only to overall corporate objectives but specifically to the operating divisions IT is designed to aid—and make sure the responsibility for what IT is supposed to accomplish is shared between IT and the business.
As the authors note: "We contend that enterprises with [management structures in common] perform better. For example, if the same executive committee governs both financial and IT assets, a firm can achieve better integration and create more value."
United Parcel Service Inc. shows how this can work in practice. IT-only committees (reporting solely to the CIO) determine architecture and standards, while heads of each operating unit are responsible for IT priorities. "UPS's executive team has defined the firm's four cross-functional core processes: customer relationship management, customer information management, package management and product management. A senior executive heads each core process and has full-time staff responsible for designing subprocesses and identifying IT requirements."
Once IT is thought of as it is at UPS, managing it becomes more effective, the authors contend, because the focus revolves around just three questions: