Why many executives think so poorly of their IT groups

Odds are you’ve been at your present company a while, and in IT longer than that. Why do you think corporate executives hold a low view of the technology departments in their own organizations?

Compared to how IT professionals see themselves, non-IT executives see the technology group as less able to deal with change, less aligned to business strategy and even unable to fulfill business strategy, according to a survey by Booz Allen Hamiltonand CIO. The survey was done online at boozallen.com and cio.com; respondents included 1,650 executives worldwide. IT groups were rated “healthy” by just 34 percent of respondents, “unhealthy” by 50 percent. Answers from another 16 percent of respondents were inconclusive.

When divided by industry, banking and insurance-two fields where technology literally makes or breaks a company-the IT group fared best. Among respondents working at banks, 45 percent rated their IT groups healthy. In insurance, it was 40 percent. That compares to low ratings at public service organizations, which were rated healthy by just 18 percent of respondents, and telecommunications firms, which got 25 percent.

“IT executives are more insular than others and don’t communicate with business counterparts well,” says Corrie DeCamp, a principal at Booz Allen who led the survey, part of the consulting firm’s “Organizational DNA” program that measures a company’s or group’s culture and personality and how they relate to performance. This is the first Organizational DNA survey that looks at IT groups. The measure of an IT group’s health takes into account agree disagree responses to such questions as “Once made, decisions are often second guessed,” and “Important information about our competitive environment gets to headquarters quickly,” and “Besides pay, many other things motivate individuals to do a good job.”

Technology managers have long been criticized for not communicating well with business counterparts-not defining and marketing IT’s worth. Aligning IT with business strategy is a perennial to-do item in our own annual State of the CIO research. At some companies, the structure of the IT group may contribute to a perception of being “unhealthy,” DeCamp suggests. For example, a shared services model, where all business units contract with a central IT group for technology tasks, may make economic sense for sprawling conglomerates.

For one example, see Unifying Global Operations in which the CIO and general manager of global business processes at Fronterra needed to ensure that the only silos at the dairy group are of the giant stainless steel variety.

But creating a shared services group may also create more bureaucracy for business units to cut through when trying to get a project done.

“Folks in business units perceive that if they have their own IT organization, that group can do things just for them,” she says. IT through shared services can be viewed as “less nimble.”

At companies where the CIO reports to the CEO, IT is seen as more healthy, the survey also found. There’s better translation of decisions to action, respondents said, and such IT groups are more likely to innovate and improve business processes.

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