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By Robert Hertzberg
We have all walked into companies and formed immediate impressions of whether they were well-run or not. It may be how the receptionist greets us, how the offices are laid out or even how co-workers address one another in the hall.
The same is true of individual business units-we often know (or think we know) whether they are well-run simply by spending an hour or two in on-site meetings with those in charge.
I.T. departments are no exception; their strengths and weaknesses are quickly evident to those who know what to look for. To get a sense of what those things are, we asked five high-level consultants what tells them, early in an engagement, that they are in the presence of quality. Here's what they said.
Sign No. 1 of a Well-Run I.T. Shop
The CIO doesn't talk in terms of a "them" and "us"
It has become fashionable to say that there needs to be good alignment between the business and I.T. But how can you really know if you have that?
One way is by listening to how technology managers talk about their business-side peers. "Do they talk in terms that convey a degree of hostility, or do they talk in terms of a very strong collaboration?" says Vaughan Merlyn, a consultant with BSG Concours who has worked with technology executives at numerous Fortune 500 companies.
Merlyn says some CIOs, in their first meetings with him, have made it clear that they think the problems are elsewhere, with businesspeople who are asking for technology services to be delivered at lower cost.
"The response from those CIOs is, 'It's the business side's fault. They're idiots,' " Merlyn says.
"You hear a lot of 'us' and 'them,' and you know you don't have a well-run shop," he adds.
Another bad sign: Managers routinely arrive late to I.T.-business meetings, fail to arrive at all or are still playing with their blackberries after the meeting starts. "In those cases," Merlyn says, "I absolutely know there's going to be a whole host of dysfunctional behaviors."
At organizations where I.T.-business relationships are better, Merlyn says he often can't tell, from an initial conversation with someone involved in a collaborative project, whether that worker comes out of I.T. or the business unit. "You can't tell which badge they're wearing," he says.
Another good sign is when the CIO doesn't wait for formal meetings to ask for input from his business-side peers. "It's how often you pick up the phone or walk down the hall and run an idea by them," says Rob Milstead, a consultant at Sapient who works with utility-company CIOs.
The advantage of these informal interactions isn't necessarily that it demonstrates a warm personal friendship-"you don't have to be buddies," Milstead says-but that it allows for information-sharing without the usual office politics.
Sign No. 2 of a Well-Run I.T. Shop
The CIO knows every detail of his I.T. budget
Most CIOs can tell you what their overall budgets are. Many know what percentage of their companies' annual revenues, on average, gets plowed into I.T. But very few CIOs, especially at bigger companies, can detail their spending by division or project.
There are several reasons for this. One is that some CIOs either don't have a system for knowing what their staffs are doing or don't have a system that's detailed enough to be of any use.
Another reason is that business units sometimes make technology-buying decisions without involving I.T. The expenditures get buried in the unit's operating costs.
When Jim McGrane started as CIO of Mead Corporation in 2002, 60% of the I.T. budget was under his direct control. By 2004-the company was then called MeadWestvaco, having undergone a merger-80% of I.T. spending was under his direct control.
"I got control through influence and my governance board," says McGrane, who left MeadWestvaco in 2006 and is now an independent I.T. consultant specializing in change management.
One way McGrane got control over MeadWestvaco's I.T. spending was to create a service catalogue, some 100 pages long, laying out the things that McGrane and his business-side counterparts agreed he should provide. The creation of such a service catalogue is recommended by the Information Technology Infrastructure Library as part of ITIL's framework for managing technology operations effectively.
As an example of a poor economic practice that MeadWestvaco averted, McGrane raised the specter of a printer that goes down at 2 a.m., eliciting a help-desk call and middle-of-the-night visit at time-and-a-half pay. MeadWestvaco's service agreement, by contrast, designates such events as low priority (since the user can typically find another printer) and deals with them at a lower cost during normal business hours.
"Getting to that level of granularity lets you manage the cost of delivering what I would consider to be more than acceptable service levels," McGrane says.
Of course, not every CIO works at a $7.5 billion company and has the resources to create a 100-page service catalogue. But McGrane says "the same principles should apply" even if you run technology at a much smaller company. "You still have to insist on processes. You still have to insist on metrics."
McGrane adds that while a smaller company may have to outsource more services than a MeadWestvaco, "that doesn't allow you to delegate it and forget it."
Sign No. 3 of a Well-Run I.T. Shop
There is a clear process for submitting and prioritizing work requests
When Chris Curran begins a consulting engagement, often the first question he puts to the CIO is how the CIO makes decisions on the work requests that are piling up. His second question is often to see the prioritized list of requests.
If he gets "blank stares or a two-hour dissertation," Curran knows there are problems.
One problem may be too many input points. Another may be an unclear process for consolidating and prioritizing requests, resulting in an I.T. staff that acts like order-takers.
For instance, maybe someone with clout on the business side has gotten it into his head that a date field should be moved to the top left of a screen. If that request reaches a developer in I.T., the developer may spend the better part of a month doing the programming and testing.
"Sooner or later, not because people are evil but just because of entropy, the pipeline of requests fills with this kind of work," says BSG Concours' Merlyn.
At well-run I.T. shops, by contrast, the people making requests and the people fulfilling them follow the same process. They work off of a prioritized list that is fine-tuned in regular meetings based on the nature and source of the work request.
A request from the board of directors or the need to meet a Securities and Exchange Commission deadline may get a high priority rating. A business unit's request to buy social networking software may get a lower rating.
Where the list appears-whether on an Excel spreadsheet or on work-management software-doesn't matter, says Curran, who is the chief technology officer at Diamond Management and Technology Consultants. What's important is "there's a list that everybody works from."