IT department, management must ally before outsourcing

There’s an important step that many SMBs forget to take before deciding whether they should outsource their software or system maintenance: aligning the IT department’s activities with the business goals of the organization.

It’s something Concord, Ont.-based Deeley Harley-Davidson Canada knows, and has been making serious efforts to improve upon over the last 18 months.

“One of the greatest challenges is, of course, IT departments like to work on what they think is important for the organization, not what the business units think is important,” says Brian Pollard, director of procurement and logistics at Deeley Harley-Davidson Canada.

So the motorcycle distributor, which has about 110 employees, has formed what it calls a technology enhancement committee, upon which a number of staff from across the enterprise sit to evaluate requests for new IT applications. These application requests — most of which come from project teams formed of primarily business-side (non-IT) members of the organization — must be supported by a number of documents, including a list of business reasons and a cost justification.

But an IT resource sits on every project team. This keeps the IT department in the loop and helps Deeley make the right decisions when it comes to choosing technology. It also limits applications purchases that may be unnecessary — or at least ill-timed from a business perspective.

The project team structure has been in place for more than a year, the technology committee for about six months. While there’s some room for improvement, so far decisions on technology are being handled the way management believes they should, says Pollard.

But often there’s misalignment between IT and the business side of an organization because political or cultural problems exist in a corporate environment.

Martin McNicoll, president of IT-Ration Consulting Inc. in Montreal, says one of IT-Ration’s customers decided to go with the software-as-a-service model. Unfortunately the trust level between the owner and his team was extremely low and the new collaboration tool was viewed as a new way for the owner to check up on his employees.

“There’s a very low take rate there,” says McNicoll. “They spent a lot of money on it, it’s a big implementation, all the bells and whistles, and nobody’s using it.”

Even when a company’s political structure is solid and relations are good between management and the IT department, there can be difficulties getting appropriate applications in place. It takes determination and good planning.

And just like your IT department, an outsourcer must understand the business goals behind a technology decision. If you are the organization in question, it’s your responsibility to make such goals clear.

“Then when you go out to the market to find someone who can do it, they won’t try to shoo you off in a direction you don’t want to go,” says Chris Ellsay, president of Ottawa outsourcing firm “You can pull them back and say, ‘No, our goal is A. If you can’t offer A don’t feel bad, but for our business we need A.'”

After all, it’s not really about technology, it’s about clarity of thought — knowing exactly what business capability, competitive advantage or cost reduction you’re trying to achieve, Ellsay says.

Sadly, in an IT immature organization, IT is often viewed only as a cost, or a drain on the bottom line. As a result, management is reluctant to OK technology investments because it doesn’t understand the value they would bring.

An IT manager or CIO must recognize that his or her IT department is not just in the business of keeping technology systems working. In fact, it should constantly be marketing IT and its value to the rest of the organization so everyone understands how it can be used to reach important business goals. The IT manager must also understand the business, says Carmi Levy, senior research analyst with Info-Tech Research Group, based in London, Ont.

“It’s not enough to deliver a Web site,” says Levy. “That Web site also supports some very mission-critical business functions, such as online sales and fulfilment and support and marketing. The IT manager has to understand what all those business drivers are so that he or she can deliver the technology to meet those needs.”

It has been said before but bears repeating: technology for technology’s sake is an invitation to disaster. Every application deployed should have an underlying business driver, and that business driver must be well-understood by those who perform the deployment. If not, you could have all the right equipment, resources and time for your technology journey, but nobody who really knows the ultimate destination.

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