CIO view: Three truths that bridge the great divide
Photo credit: "Conversations in Silos" by Michael Krigsman
Update 1/20/12: Thanks to Carlos Francavilla for translating this post into Spanish!!
This post summarizes my remarks to a group of senior government leaders embarking on an innovative and ambitious plan to improve health care delivery in their state. A key issue is fostering communication and collaboration between business stakeholders and IT.
Statistics tell us that almost 70 percent of IT projects are late, over-budget, or fail to deliver expected value (the worst fate of all). Numbers like these make clear there is a pervasive issue in the world of IT delivery.
Despite the glaring statistics, virtually all projects start with good intentions; after all, no sane team intends to fail. Although politics and self-interest sometimes push individuals to undermine team goals, most organizations that invest in technology expect positive results. Despite these good intentions, failures occur with striking regularity and few organizations take steps needed to prevent failures from arising.
For example, no one expected a meltdown when the state of Maine went live with a new Medicaid claims processing system that allowed medical providers to submit claims over the Internet. But meltdown is precisely what happened when unanticipated errors caused the system to handle claims incorrectly. Original project cost: $25 million. Additional work required to fix errors after going live: $30 million. Hassle caused to medical providers and lost credibility to state of Maine health administrators: priceless.
Similarly, everyone surely expected success when Minnesota’s Department of Human Services (DHS) started developing its HealthMatch program, “an automated system designed to match Minnesota residents with appropriate state-run health programs, based on eligibility.” Nonetheless, the state eventually spent $41 million and settled a lawsuit with the software developer before deciding to shut down the failed program. Despite HealthMatch being a total loss, one enterprising Minnesota lawmaker subsequently introduced a bill directing the Department of Human Services to start over with a new external contractor.
As these examples demonstrate, good intentions and an honest soul are not sufficient to create successful IT projects. Many organizations simply lack the skills needed to navigate complex relationships between technology and business holders in an organization.
To avoid these problems, every CIO, project owner, and business leader should understand three basic principles:
1. Put strategy before technology
It may sound obvious but many organizations do not fully consider business strategy before deploying technology.
A prevailing view assumes that IT’s primary role is managing technology. However, this limited perspective obscures a more profound truth: technology’s highest value is helping the business achieve benefits such as driving innovation and competitive advantage, lowering costs, increasing market share, and so on. For those who love jargon, call this “IT enabling the business.”
Projects fail when organizations perceive IT as folks who “keep the lights on.” When business process owners and stakeholders do not involve IT with planning and strategy, they create mutual co-dependence with their IT counterparts. Eventually, IT itself completes this unhealthy relationship cycle by not taking sufficient time to understand and engage lines of business in a meaningful way. For those who love jargon, call this pattern “mutually assured self-destruction.”
