Measure me illogically and that's how I'll behave

IT departments are viewed very differently from company to company: in the worst cases, they're a necessary evil, a law unto themselves and a cost centre; in the best, they're strategically significant, an integral and contributing business service – certainly seen as key to driving revenue and competitive advantage. So why the huge disparity? What goes so wrong for some companies and so well in others? And how can we move from the former to the latter and then sustain it? These are important questions, and we do need resolution. IT investments can be as much as 50% of corporate capex, and we can't afford the team delivering on that not to be getting it right in the eyes of the business management it's supposedly there to benefit. OK, so that's the position. But now it's watch-out time. Because there are dangers, and they're mostly around being lured into quick fixes. Jumping on the 'American style' metrics bandwagon, for example, or attempting to move IT onto a charge-back model, where funding explicitly comes from the business units it supports, might be part of the answer. But it's unlikely that a return to the timesheets will alone do much more than ensure individuals and departments spend more time justifying their existence. And the same goes for implementing internal progress monitoring and workflow systems for IT: it may well be a good idea, but chances are Microsoft Project and some simple browser-based communication tools will do if we're after improving efficiency. Indeed, much of what's put forward as a solution to 'IT department problems' can be more destructive than constructive – and the worry is it's easy to get sucked into the notion that a third party can do for you what you can't or won't for yourself. Time to get advice from some in manufacturing who certainly have been getting it right. I spoke first to David Lloyd, group systems manager at Stadco, which engineers and manufactures body panels for the likes of Ford, Jaguar, BMW and Land Rover. He's had to deal with a lot of change in the last couple of years; now with 22 IT professionals around the world, did he go the performance metrics or charge-back routes? "No. I have an IT team in Shrewsbury, a second in Birmingham and a development team also in Shrewsbury, as well as people in Germany and Brazil, and we've linked them to business units. So each IT manager has a number of plants for which they're responsible. They have monthly meetings with the plant management team, run by the plant director, and the result is actions-orientated minutes that are circulated to the operations director, finance director and myself." Which is sounding a bit formal and time-consuming – but he assures us it's not. "Those meetings only last about an hour and a half, and the focus is on business and plant issues, with frank and open dialogue among equals. It's very deliberately constructed that way, and our IT managers spend additional time with their business units so that each knows intimately where the other is coming from. We don't sit in an IT ivory tower: everyone understands we're providing key services to those businesses." As for systems, Lloyd runs Microsoft Project-based Gantt charts for the bigger projects, with milestones and the rest, and he supports that with weekly 20-minute team meetings. He also looks at issues with the finance director and UK operations director on a weekly basis. Then at the detail level, he has a web system that logs where people are and why, with peer checking around holidays etc. His is an avuncular, people- and business-centric approach. Throughout, the emphasis is on pragmatic, egalitarian and collaborative processes and decision-making – but he agrees that fundamental to it all is getting the right team-orientated people. "I put a lot of effort into recruiting very good people," he says. Looking at the charge-back model, he advises only going there when it's necessary, for example with JVs. "It becomes very time consuming, and if management is focused only on costs and deliverables it misses the raison d'etre of IT." Indeed he rejects most metrics for much the same reason. "Do you measure the team on server availability? What? Metrics can hide the truth anyway. It's more important to monitor good practice – like adherence to backup and restore procedures." Business responsibility Graham Leake, formerly systems director at Britax Aircraft Interiors but now running project management firm GEL Consulting, is another who majors on communication and involvement. He agrees that IT can become isolated and the butt of the blame game, and his number one advice is for business leaders. "You can't have an IT policy in splendid isolation; you've got to start with the business strategy. Projects will take time, resource and cost money, so the directors have got to review and debate the business and its strategy first, sort out their objectives, and then the IT can fall out of that. Otherwise, you get the 'busy fools' situation, and division between the operational guys and IT." That said, he suggests: "You need to build a team that can take responsibility for projects in terms of the business processes, as well as understanding the systems themselves … so they all understand the issues, and respect one another's positions." And it isn't just about sitting in on meetings: "There need to be actions arising and focus back on the business objectives, like 'are we driving down costs?' and 'are we getting usage out of this equipment or these applications?'." On the subject of measurement, he believes that there need to be performance metrics and milestones – both of the people in the team and of the projects. "You've got to be able to measure so you can see progress, where the delays are, why and so on. But you need to encourage performance awareness in the company, so that when directors and managers question what value they're getting out of IT beyond simply, 'the system is up and running 99.999% of the time', you can show what's being delivered." Leake suggests that at the individual level, it's incumbent on managers to ensure that performance measures are meaningful, agreed and perceived to be worthwhile and business-centric. "Remember the adage, 'measure me illogically and I'll behave illogically'," he says, adding, "If you're not stretching and growing your people, you can't expect to stretch and grow the business – and you can't expect them to stay." What about the charge-back model? "I've always tried to avoid that – for two reasons. First, if you get the rate wrong – and nine times out of 10 it looks horrendous – then you get into a war with the users. Second, where's the value in accounts moving money around in recharges between departments. What a waste." Linday Watson, programmes director at automotive development firm Menard Engineering, disagrees. Menard runs its IT, and indeed all shared services (HR, finance, etc), as cost centres, and Watson argues that unless that's done and you're delivering services to paying customers, it's difficult to get that business focus and transparent efficiency. However, although that means accurate recording of time spent on each activity and individual, project and business KPIs, they're not the be-all and end-all. Because tempering everything is Menard's culture – which is again egalitarian. Menard is a classic matrix organisation, and individuals in IT fit neatly into that, with project and functional teams having multiple reporting lines. The point is they're thus directly linked into the business. "IT is a function, but we have people lined up to support specific projects, and specific parts of the business," says Watson. "IT people are integrated with the project teams: it may not be full time, but we put them into the organisation they need to support, so they sit on meetings and may even re-locate around the sites. That way everyone understands what they're trying to achieve." Further, Menard has very deliberately located its service teams right at the heart of the company, so they're viewed very much as central. "That way, everyone can see them all the time, what they're working on and how busy they are... It also means the IT team is much more accessible. You can make phone calls and send emails, but being available for face-to-face conversations is extremely important." Indeed, nothing more complicated than straightforward communication is, he insists, more than half the battle. "We make sure that the whole company is aware of project status and key drivers all the time." Which leaves performance metrics and systems. And while the company, its departments, everyone is measured against KPIs, it's clear that again, they're about encouragement and development – not fault-finding. "It's as important to develop your people as it is to get the equipment and the business right," observes Watson. His bottom line: "It's all about getting the right people." And the right culture and then the systems.