IT leaders focus on how to get more for less cost

A key theme of the IT Directors' Forum last month was how to create more value for less cost.

A key theme of the IT Directors' Forum last month was how to create more value for less cost.

The 350 senior IT directors and managers on board the cruiseship Aurora heard about GlaxoSmithKline's insistence on getting payback after one year from all of its IT projects; Hampshire County Council scrapping its IT budget by creating an internal market for IT; and the Medical Research Council's unique outsourcing arrangement with Logica CMG, which relies on payment by business results.

IT directors were also advised by the Best Practice Group to let suppliers lead projects, in the light of their new legal liabilities following a 1996 judgement which placed a duty of reasonable care on specialist IT suppliers.

For a good model for success in creating true business value, IT directors should look at how Tour de France champion cyclist Lance Armstrong has revolutionised thinking about winning cycle races, said Paul Tomlin, general manager of Avis Futures, part of the Avis car hire company.

"Just as Armstrong races only in the Tour de France, so IT directors should focus only on the strategic projects that give most value to the organisation and not waste time on trivia," he said.

Tomlin expanded on his analogy, saying that the Tour de France comprises a series of races, with teamwork essential at all stages - with team members slipstreaming each other, for example.ÊThe race route changes each year, so teams have to adapt, they have to keep being innovative, and they have to distinguish clearly between the tactical and strategic actions.

"IT managers are too often defensive, putting up barriers between themselves and the business. Instead they should put passion back into their work, take personal risks, build their commercial credibility and be more accountable," Tomlin said.

Margaret Smith, director of business information systems at Legal & General Assurance, focused on the importance of effective, jargon-free communication in getting the attention of the board.

IT has to overcome the presumption that it will talk technology, and ensure it communicates in the right way to each group of business people. For example, the monthly board report should be no longer than one page of A4 and be written in clear business language, said Smith.

She also advised IT directors to speak up at meetings. "By keeping quiet, you are agreeing," Smith warned. She also urged IT managers to take advantage of general governance projects and use them to help the cause of IT.

"You have won when everybody is talking about what IT has done for their bottom line; when you do not have to edit bottom-up reports; and when, at board meetings, co-directors have said it all." said Smith.

In changing times, chief executives themselves often do not know what they want from a new IT director, said headhunter Alan Mumby of Whitehead Mann. He said, broadly, they are looking for four characteristics:

  • Hygiene factors: truth, openness, integrity
  • Personal characteristics: leadership, energy, creativity, proactivity and passion
  • Commercial savvy: they want someone who has been there before. Key factors include relevancy, evidence of successful track record, flexibility
  • The "X" factor: that extra sparkle to add lustre to the position, for example, the ability to forge people into a dynamic team.

Mumby said that there are not enough potential IT directors who fit this sort of profile. "I get disheartened that value-added is not even on your agenda - it is not articulated in most of the CVs I receive," he said. "You have to know what value you and your team have added and measure it in numbers."

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