The Diligent Director in a Digital Business World

the

DILIGENT DIRECTOR

in a

Digital Business World

Today’s CEO expects his business to fully exploit new technologies for maximum business advantage, under the guidance of the best available IT application expertise out there.

Impressive results have been achieved by many, but gaps in understanding between the business and technology skill-sets have resulted in too many costly failures.

As the world goes completely digital, such gaps in understanding at board level are damaging and unacceptable. But how can board members become better informed digital business strategists?

"I think that there’s a real need for a book with this kind of analysis and these types of messages. It has homed in on the key issues and explained them well."

Sir George Cox - Director General The Institute of Directors 1999-2004

Published by Geoff Codd at Smashwords

Revised and Updated - JANUARY 2016

Copyright 2014 Geoff Codd - ISBN: 9781311863072

This e-book is derived from ‘The Drowning Director’ published in the UK in hardback in 2007 by PenPress Publishers Ltd - ISBN 13: 978-1-906206-38-3

This e-book is licensed for your personal use only, and it should not be resold or given away to other people. If you would like to share this e-book with another person, please purchase an additional copy for each recipient. If you are reading this e-book and did not purchase it, or if it was not purchased for your use only, then in all fairness to the author it would be greatly appreciated if you return to Smashwords.com to purchase your own copy.

Thank you for respecting the author’s substantial investment of time and effort over many years in the research and writing of this book.

*****

TABLE OF CONTENTS

Foreword - 2016

Chapter 1 - The Challenge being addressed

Chapter 2 - Overview of Contents

Chapter 3 - A little bit of IT history for the newcomer

Chapter 4 - Trends in IT management and organisation

Chapter 5 - The extent of failure

Chapter 6 - Where to from here?

Chapter 7 - The business director’s challenge

Chapter 8 - Bringing about a change in direction

Chapter 9 - Impediments to be surmounted

Chapter 10 - The changing IT organisation

Chapter 11 - The changing role of the change professionals

Chapter 12 - Attaining a new unity of purpose

Chapter 13 - Adopting the UNITY model

Chapter 14 - Corporate coordination and IT service delivery

Chapter 15 - Setting up the Process Change Management Board

Chapter 16 - Setting up the Business Futures Group

Chapter 17 - The Process Integrity Group

Chapter 18 - The Community of Interest or Practice

Chapter 19 - A Relationship Management role

Chapter 20 - Business Process linked IT Service Level agreements

Chapter 21 - Cultural unity between business and IT

Chapter 22 - The annual IT and Process Change conference

Chapter 23 - Business Continuity Plans and IT

Chapter 24 - The UNITY Principles

About The Author

*****

2016 - FOREWORD

IT Governance in many large organisations is too often lacking in substance and inadequately informed. Business and Government leaders need to challenge their traditional beliefs and practices, if they are to become better informed and more effective leaders of today’s emerging digital world.

It goes without saying that, as each day passes, technology opens up fantastic new opportunities for business betterment. By the same token, each day produces new forms of cyber challenge that can threaten the very existence of organisations, large and small, both within Government and the Private Sector.

We have all observed an increasing number of household name organisations around the world experiencing cyber-attacks which have had a serious impact on their continuity of operations, and which have often cost them dearly. In spite of such potentially crippling threats, most board members are singularly ill-equipped to intelligently assess their business’ vulnerability to such threats, in spite of having access to the best available external advice.

In 2015 Accenture carried out a world-wide survey of the presence of technology expertise on the boards of banks. Their survey found that almost half of the world’s 109 biggest banks did not have a single board member with technology experience, and a further quarter of them only had one. And that was using a definition of ‘experience’ that was very tenuous indeed.

It is simply astonishing that so many top people, with total responsibility for the long term governance of their organisation, do not see the urgent need - or perhaps are simply resistant - to move outside their traditional business comfort zone. They are seemingly content to rely on advice from technology experts, who may indeed be first class in their area of expertise but who do not have that essential insider’s insight into the deep-rooted cultural values and underlying driving forces within one’s own organisation.

It is of course important that directors continue to receive advice from the best technology experts out there, but they also need to better understand the deeper business implications of that expert advice on their own organisation. To be able to do that, directors need to jettison the idea that the IT development activity is a ‘service’ that can be left to the experts. When technology is transforming so many of the fundamentals that we live by, then we need to contribute to that transformation, not simply ask others to lead us we know not where.

One of the main recommendations to emerge from that Accenture study was that banks should set up technology committees on their boards, and several organisations were said to have already done so. Whilst that recommendation is sound in principle, my considerable experience tells me that, unless certain conditions are met, it can also raise as many problems as it solves.

Apart from the mix of personal attributes that one would expect to find on such a committee, there are two essential inputs upon which the committee will rely totally for its effectiveness. The input of technology expertise is an obvious need, and this would normally be satisfied by CIO representation on the committee together with an external source of relevant expertise. Arranging this would not be a challenge for most organisations today.

However, the second essential input is quite another matter. This concerns the need for members of this committee to be much better informed on lessons learned, and likely outcomes from current and future IT investments, but from an internal business perspective. Pointers need to be garnered from a variety of internal sources including people at the front line, middle and senior managers heavily involved in change, and those responsible in the business for constant business process improvement.

Our traditional management culture and formal lines of communication have not encouraged this type of reporting which is now an essential input in our fast moving digital business environment. Top level attention to this issue has been lacking, hence the fact that important lessons were never really learned by top people, and the same reasons for failure have been reported time and time again. This reporting inadequacy is by far the biggest challenge to the effectiveness of the proposed new board sub-committee.

The primary focus of this book is therefore to provide guidance on how that essential input can be provided for more digitally-aware members of the board. It also promotes the fact that this board sub-committee is not intended to be a ‘technology’ committee, but should primarily focus on ‘business process change in a technology context’. While this may seem to be simply a matter of semantics, it really is not. We have seen too many major change projects fail due to overly focusing on technological innovation, rather than on preparing the business for inevitable changes in business culture and in its driving forces.

Indeed, a major inhibitor in many IT related business change projects thus far has been the lack of shared language and the divergent driving forces between business people and their technology experts. There is a need to eliminate this damaging dichotomy which has been at the root of so many project delays and misunderstandings, and this significant cultural change has to be driven from the very top of the organisation.

Accenture were absolutely correct in principle if not in detail. There has never been a greater need for a new digitally-aware board sub-committee to determine strategic and tactical issues in connection with technology driven business change, and to address today’s cyber threats and opportunities for business betterment in this new digital world.

In order to further that aim, this book provides an analysis of why our traditional IT exploitation practices are inadequate to meet today’s needs. Extensive insights and down-to-earth advice is also offered on the do’s and don’ts when setting up a board sub-committee and its essential supporting infrastructure, This advice is based on personal experience over many years of working in this field at board level in a wide variety of business and Public Service cultures, both large and small.

*****

CHAPTER 1

THE CHALLENGE BEING ADDRESSED

Business and Government leaders naturally expect everyone to develop new skills in our rapidly emerging digital world. However, many still seem to be unaware that their own traditional leadership skills and ways of working are increasingly inappropriate and inadequate in this new world .

This review of IT exploitation effectiveness is therefore intended for business and Government leaders as well as the IT professionals. It is couched in everyday language that is intended to lighten dark corners, and illuminate a subject about which many business leaders still feel uncomfortable, even when enthused by its transformational potential.

Back to Table of Content

It is hard to believe that it is nearly sixty years since I first became involved in the business exploitation of information technology. Since those very early days a digital revolution has been unfolding through a painful and costly change process which has undoubtedly been constrained by many traditional business values, management practices, and established ways of doing things.

Over many many years there have been repeated reports of huge cost overruns of many £billions on UK Government IT projects. Indeed it was reported by MoneyWeek that, in 2007 alone, this had cost every person in the UK £150 (population 61M). In 2010 the independent Standish Group reported that 24% of Public and Private Sector IT projects across the globe were considered to be failures, and all of us can no doubt recollect examples that have hit the headlines from time to time.

Peter DuPre of Micro Focus commented that this situation is not getting any better, despite all the money being thrown at the problem. One inevitable conclusion must be that the money is not being directed at the right issues, the solving of which can bring about the much needed improvements in insightfulness and effectiveness with which we are building our digital world.

There is increasing evidence that it is time to ditch many of those outmoded traditional practices and power structures that have impeded our progress towards a very different future. We must adopt a way of moving forward that is more in tune with the new digital age - a way which does not incur the huge learning costs of the past, but which captures the very essence of the world of Big Data.

Why I wrote this book: I had already been involved in introducing computers into business for nearly thirty years when I had an opportunity to take a cool hard look at what factors determined the success or failure of business IT projects. The conclusion became very clear - many costly failures were invariably due to governance and management inadequacies, usually compounded by serious cultural issues. Technology issues barely registered.

As a result, I formed an action agenda that was specifically designed to address those all-too-common weaknesses. I then had an opportunity to put that agenda into practice in a very troubled business, where the business ‘IT challenge’ was proving to be particularly difficult. The result turned out to be truly dramatic, as I describe later in this book.

Following such a convincing outcome, I spent several years developing and finessing that action agenda into more comprehensive IT exploitation guidance based on the lessons that I had learned. I realised that this must not only deal effectively with existing weaknesses, but should also provide a more appropriate way forward for dealing with the IT exploitation challenges in our emerging digital environment. This book is the result.

The primary focus of this book: The field of information technology can be split into two distinct areas. Firstly the actual delivery of technology services and infrastructure that have been previously specified to satisfy specific needs; in many organisations these services can be likened to the ‘information factory’ of the organisation. In the IT marketplace these activities are supported and stimulated by a world-wide technology research, development, and design industry, with the result that in most organisations the delivery of these technology services tends to be of a high standard.

The other main component in the overall IT exploitation process within business and Government, takes place at the interface between the IT professionals and those out in the organisation who wish to exploit the new technologies. Many weaknesses in this area have been the cause of much difficulty, frustration, and unnecessary cost over the years. Dealing effectively with that challenge is a primary focus of this book.

Many of today’s underlying difficulties in that area derive from traditional management values and practices which are increasingly inadequate in our digital age, and from the existence of a culture disconnect between the old and the new. This calls for culture and process change that permeates into the very DNA of the organisation. This is aimed at bringing about much closer alignment of business and technology drivers through the creation of a new sense of deep unity between all parties in the change process.

The attainment of this ‘deep unity’ model, as described later in this book, may look like a radical challenge and a costly exercise, but it is little more than opening up new lines of communication, clarifying new responsibilities, and encouraging a learning culture. The very first task - that of creating a new board sub-committee in place of the traditional IT Executive or Steering Group - can of itself produce huge benefits for the business.

If your main interest is in exploring technology issues, and in making the ‘information factory’ more efficient, then this book probably has little to offer you. However, if you believe that there is an urgent need for better informed IT awareness at the heart of business and Government leadership of change in our digital age, then this book is for you.

The age of the complete IT activity being provided as an arms-length service to the rest of the organisation has now outlived its usefulness. Whilst the Service model is still perfectly appropriate for the organisation’s ‘information factory’ activities, it is totally inappropriate as a basis for aligning IT innovation with the dynamic needs of the business.

Some further background: In every area of human endeavour one sees a continuing learning process by those who are constantly pushing the boundaries of possibility. Whether it be in medical treatment, air and space travel, or the application of computers in so many areas of our lives, the same pattern can be discerned. Either a technological advance, or peoples’ changed attitude towards it, can cause a leap forward in its exploitation. Once one horizon is reached, the next is opened up by another new way forward, and so it will continue.

If one looks back over the years at the application of computers within business, one can discern such evolutionary leaps forward. Typically those advances were stimulated by technological innovations, such as the advent of the mini computer, the introduction of the Personal Computer, the development of sophisticated communications including the World Wide Web, or the coming of age of new analytical techniques such as those employed in the ‘big data’ world, to name but a few.

However, whilst technological innovation continues to take us through unexplored horizons, its means of delivery throughout business and the public services has changed little over many decades. The organisation and management of the IT service is still largely as it was in the 1970s and 80s, when its complexity and its business impact was a world away from what it is today. The management of IT stimulated change has certainly not kept pace with technology innovation.

This management inadequacy has inevitably meant that the introduction of IT into business and Government has been dogged by constant impediments to the smooth and timely delivery of IT projects, which has been a continuing source of escalating costs and deep frustration. That situation has remained as seemingly intractable as ever, in spite of the many sophisticated processes and practices that have gradually been developed by the IT professionals over the years.

Examples of good practices have included small ‘proof of concept’ projects– a practice now well established, but still too often ignored. Today’s ‘Agile’ developments are based on a concept that has its roots in the 1980s EVO and RAD initiatives, and the users are also more involved in project management, as promoted in PRINCE 2, but that is also still too often inadequate. Outsourcing of IT Services to ‘best of breed’ suppliers is also now a well-established principle, and rapidly increasing use of Cloud services which is a recent trend with its roots in long established SaaS initiatives over many years.

Technology leadership is therefore not the main issue: In spite of steadily improving professional IT practices, IT project performance is still too often undermined by IT-naïve business or Government leaders who are under pressure to bring about rapid change. Such constant pressure from the top is entirely understandable, but it is applied without an adequate understanding of the risks involved, and the potentially serious consequences that inevitably flow from ignoring best established practice.

Insufficient top level awareness of IT critical success issues has also meant that the reasons for failure are often misunderstood by top management. In this scenario it is too easy to point the accusing finger at poor development practice by the change professionals, although there have been repeated project post mortems over many years - notably by the UK National Audit Office - which have identified business management issues, such as inadequate communication, leadership, and governance, as major contributory factors in such failures.

It is however natural in this situation for compelling evidence of senior business management shortcomings to be side-lined in favour of applying pressure on the IT professionals to improve their processes. Traditionally the IT development function is still too often perceived by business as a specialist ‘techie service’ that just needs to perform better, rather than realising that in our emerging digital age it is increasingly an essential integral part of improving the management and direction of the business.

Business directors and Government ministers generally recognise that every person in the organisation has to develop new skills in this rapidly emerging digital world. However, many of these people seem to be unaware that their own traditional leadership skills and ways of working are increasingly inappropriate and inadequate, and that IT exploitation governance has now become an essential component of the board’s responsibility for sound business governance.

This book explores the reasons for that deficiency, and proposes a range of business actions that need to be taken to address this in a manner that is not overly costly or disruptive. These actions include how to raise director level awareness of the issues involved, and also how to introduce the processes that are needed to bring about changes in culture down to the grass roots of the organisation; changes which are essential to support directors in fulfilling their emerging IT exploitation governance role.

Why this book is different: Over the years there have been many books written on the subject of information technology, most of which focus on the huge benefits that are to be derived from its wider adoption within business and Government. Others have also addressed the many management and technology issues that have arisen during its exploitation and, as a consequence, many lessons have been learned by the change professionals.

However, those publications have invariably assumed that the traditional organisation of IT exploitation within business and Government continues to be relevant, and that business dependency on the role of the IT specialists will remain largely unchanged. It is clear from mounting evidence, much of which is discussed in this book, that that is an unwarranted assumption which needs to be challenged with considerable vigour.

This book is that challenge. It has been written with business and Government leaders in mind who have little in-depth understanding of best practice in business computing. It recognises that some see little justification for investing more of their time in becoming better informed in what has traditionally been seen as a highly specialist field.

However, there are also those directors who feel increasingly disadvantaged, in that their hard-earned business experience in the traditional mould is becoming less valued in our rapidly evolving digital world. This book is therefore primarily aimed at redressing the lack of awareness and direct influence by those at the top of business and Government, who now believe that they need to have a more profound impact on their organisation’s exploitation of information technology.

The traditional IT exploitation model has failed to provide such an opportunity: Different ways of raising top level awareness and involvement, without devouring huge amounts of scarce quality time and energy, are therefore needed. A more relevant IT exploitation model for our digital age forms the foundation for the recommendations that follow.

This new model is designed to create and sustain a sense of ‘deep unity’ throughout the organisation in all things to do with IT exploitation. It makes provision for a board level sub-committee, which is supported by a briefing framework that enables business leaders to provide the leadership and governance that is now required in IT stimulated business change in our digital age.

This model can be introduced gradually, and its introduction need not be excessively disruptive or costly, with considerable emphasis being placed on doing existing things differently, rather than doing new things. This then becomes a ‘how to do it’ book, as well as an exploration in layman’s terms of many of the key issues.

The book provides a practical route map to enable IT naïve business and Government leaders to better understand this subject, and to instigate improvements in business IT effectiveness in a manner that provides benefit from the start of the change process. This route map is also accompanied by detailed guidance to help people at