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• W8312379 abstract "mad as hell, and I'm not going to take this anymore! The choice is yours: manage information technology, or give away a bundle The experts' I's: infallible, inflexible, and very inflatable You have the knowledge to change this And the technology trends are in your favor Sometime in the not too distant future, some new Peter Drucker is going to point out how managers in the 1990s spent way too much money on information technology because CEOs were afraid, unwilling, or untrained to manage it. Instead managers blindly put their trust in technological experts whose motto was Infallible, inflexible, and inflatable. Until finally one day, like the television anchor played by Peter Finch in the movie Network, they stuck their heads out the windows and yelled, mad as hell, and I'm not going to take this anymore! And mad they should be. IT capital spending per white collar worker has tripled since 1980, while overall IT spending is projected to increase by 60 percent over the next five years [ILLUSTRATION FOR EXHIBIT 1 OMITTED]. Yet despite all this spending, companies that manage to extract significant business value from their IT investments are rare exceptions to the rule.(*) Many CEOs have tried to improve matters, perhaps by outsourcing parts of the IT function or repeatedly changing the CIO. But little has changed. IT expenses continue to rise, major reengineering projects still languish because key systems fail to materialize, and market share and the bottom line show little of the promised improvement. Hopefully, that Peter Drucker of the future will also point out that CEOs finally learned to resolve the problems simply by regaining control of their IT organizations. For the truth is, IT can be managed just like any other part of your business, using the same traditional managerial toolkit to make business-based decisions and trade-offs. The IT box Many of today's business leaders view IT as a black box, unsure of what goes on within it and not particularly anxious to find out. They don't know the right questions they should be asking, much less the answers they should be getting. They cannot penetrate the techno-speak of the IT group and are often forced to defer to the technologists. In short, IT often escapes the management scrutiny which is commonplace elsewhere in the enterprise. But think about how you manage the other major functions of your business - strategy and planning, new product development, operations, and customer service. You're probably not an expert in all these areas, yet you have a good feel for what's on the critical path and what's crucial to your current strategy and plans. You have a vision of where you are trying to take the company and how these functions support that vision. You don't micro-manage, but you know how to quickly penetrate to where the rubber hits the road. You know the crucial numbers to watch to determine if things are on track. You realize, for example, that a key objective of strategy and planning is to focus investments on areas that will have the greatest impact on the growth and profitability of the business. You therefore use measurements such as return on invested capital, and would insist on a set of payback analyses you understand and trust, when the head of manufacturing requests funds to build a new plant. When it comes to developing new products, no doubt you assign individual accountability, say, to a brand or product manager, whose compensation and performance assessment are based on capturing revenues or market share from new product launches within a given time frame. If a product design team were to add bells and whistles that you don't see supported by market research and you suspect will inordinately delay your product launch plans, you don't sit still. You challenge them, and you are comfortable in doing it. In operations, you know how maintenance relates to uptime, what the trade-offs are between customer service levels and cost, and what the three or five operationally oriented numbers are that you need to look out for. …" @default.
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• W8312379 date "1996-06-22" @default.
• W8312379 modified "2023-09-24" @default.
• W8312379 title "An Open Letter to CEOs: How Otherwise Good Managers Spend Too Much on Information Technology" @default.
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