November 1, 2005 – In September, Ventana Research conducted a workshop for senior finance executives as part of CFO Magazine’s Strategy Execution Conference. Its theme was integrating business and information technology, particularly in areas (including budgeting and planning, closing, reporting, compliance and profitability management) where the proper application of IT would have the greatest potential for creating business value. We also delivered an overview of the methodology we use to help companies create requirements for IT initiatives and find the software that best matches their needs. Part of the workshop was devoted to discussing the most common IT issues that participants had to confront to address the business challenges facing them. We found that the pure technology concerns were dwarfed by a broader set of challenges related to the organization, communications and resources.

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The results of canvassing our CFO workshop participants demonstrated again
that from a business perspective, the greatest IT challenges have less to do
with technology than with people and organizational issues. Communications concerns
were cited most frequently. Some participants declared that IT’s lack of understanding
of business issues and strategic requirements was a barrier, while others cited
IT’s failure to listen to users’ needs. Recognizing that the problem cuts both
ways, others mentioned a lack of clarity on the part of users in defining their
requirements and a general inability to communicate clearly, possibly because
(as others noted) different groups use different definitions. Cultural barriers
also were mentioned. None of this was particularly surprising; Ventana Research
often finds that fixing what appear to be technical problems begins with engaging
all participants in a meaningful discussion.

Organizational issues were the second most frequently mentioned item. Perhaps
because of a lack of effective dialogue and a track record of poorly executed
projects, many people do not see the value of investments in IT and question
whether IT departments can deliver. One participant mentioned a lack of buy-in
from IT, which can happen when an initiative driven by a line of business excludes
IT. Process management concerns, including scope creep, also made the list,
as did corporate politics. Overall, organizational issues appear to be a constant
impediment, but usually they can be mitigated by preparation and communication.
On the other hand, an IT department that has a poor reputation within the company
has to reverse that perception before anything else is possible. (When you find
yourself in a hole, the first step, as the epigram advises, is to stop digging.)

Resources were another familiar stumbling block. Over the past three years,
organizations have had more opportunities to invest in IT-related projects than
they have had funds earmarked for capital spending. Many companies pared the
size of their IT staffs considerably and now do not have the human resources
to support needed initiatives. In midsize organizations, being able to attract
and retain people with the necessary IT skills always has been and continues
to be a challenge.

Of course, our conference attendees also mentioned plenty of technology issues.
They deal with disparate systems that are difficult to integrate, poorly designed
data warehouses (or no data stores at all), systems that cannot scale to their
requirements, poor data definitions and data quality and difficulty in getting
useful information from their IT systems into reports. They also struggle with
basic architecture issues such as ensuring flexibility and with build-versus-buy
decisions.

Assessment

Information technology is a big headache for companies of all sizes. They find
it difficult to manage the acquisition, implementation, use and maintenance
of their IT systems. Ventana Research consistently finds, though, that “IT issues”
go well beyond purely technical concerns and always touch on people and processes.
Companies continue to struggle with information technology because they lack
internal resources and a methodology capable of assessing the adequacy of their
IT architecture and environment, as well as the organizational and process issues
that accompany them. They also have a hard time finding a trusted advisor to
help them address these issues in the ways that mean the most to them.