The Right Mindset for Managing IT

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The Right Mind-set for Managing IT

• M. Bensaou
• and
• Michael Earl
• HBR Sept-Oct 1998

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North American and European Executives and IT

• IT investments are unrelated to business strategy
• Payoff from IT investments is inadequate
• Theres too much technology for technologys sake
• Relations between IT users and IT specialists are
  poor
• System designers do not consider users
  preferences and work habits

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As A Result

• Outsource IT
• Hope Power Users Will Come to the Rescue
• Blow Up IT

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Why?

• IT is Both Exalted and Feared--IT should
  support/be strategy--Integrating IT with
  Business Goals Is Extremely Difficult

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Authors Conclusions

• Too many executives in the West are intimidated
  by the task of managing technology
• IT should be managed--controlled even-- like any
  other competitive weapon in a managers arsenal
• Thinking revamped by a a study of Japanese IT
  management

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And

• A Western executive might spend time to develop
  and IT strategy related to a firms strategy
• A Japanese executive would base IT investment
  decisions on simple and easily quantified
  performance-improvement goals

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• A Western manager might go for a leading-edge
  application in the the belief that it would
  deliver competitive advantage
• A Japanese manager would look at performance
  goals and choose the technology-whether old or
  new-that would help him achieve those goals

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How Do We Decide What Information Systems Our
Business Needs?

• WestWe develop an IT strategy that aligns with
  our business strategy
• EastWe let the basic way we compete, especially
  our operational goals, drive IT investments

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How Will We Know Whether IT Investments Are
Worthwhile?

• WestWe adapt capital-budgeting processes to
  manage and evaluate IT investments
• EastWe judge investments based on operational
  performance improvements

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When Weve Trying To Improve A Business Process,
How Does Technology Fit Into Our Thinking?

• WestWe assume that technology offers the
  smartest, cheapest way to improve performance
• EastWe identify a performance goal and then
  select a technology that helps us achieve it in a
  way that supports the people doing the work

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How Should IT Users And IT Specialists Connect In
Our Organizations?

• WestWe teach specialists about business goals
  and develop technically adept, business-savvy
  CIOs
• EastWe encourage integration by rotating
  managers through the IT function, collocating
  specialists and users, and giving IT oversight to
  executives who also oversee other functions

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How Can We Design Systems That Improve
Organizational Performance?

• WestWe design the most technically elegant
  system possible and ask employees to adapt to it
• EastWe design the system to make use of tacit
  and explicit knowledge that employees already
  possess

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In Japan

• Investment in IT follows a logic of strategic
  instinct rather than strategic alignment
• Issues are-Customer satisfaction-Product
  quality-Customer service
• IT investments are made in support of these
  business goals

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In the West

• The value-for-money mindset can be destructive
• It can bias IT investments toward cost-saving
  projects rather than revenue generating
  ones-Recall Venkatramen and the issue of
  efficiency vs. effectiveness

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The Five IT Management Principles
West
East
Strategic Alignment
Strategic Instinct
Value for Money
Performance Improvement
Technology Solutions
Appropriate Technology
IS-User Relations
Organizational Bonding
Systems Design
Human Design
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In Conclusion

• The authors imply that Western managers should
  adopt the Japanese model in order to achieve
  better IT results.
• Do you agree? Why or why not?