The Real Business of IT - book review

‘The Real Business of IT’ by Richard Hunter and George Westerman, published by Harvard Business Press

This book has an impressive feel to it, with the Harvard endorsement and authors who represent a good combination of academia and consultancy.  Hunter is a VP from Gartner - well known as specialists in IT consulting - and Westerman is a researcher at MIT, another strong brand.  The credibility of the book is strengthened by references to their research and to real issues in top companies such as Intel.  It would have been good to have had more in-depth interviews but the clear conclusions and practical approach make up for this deficiency.

The book also has the advantage of being relatively short (around 200 pages) and without any unnecessary padding.  The message is consistent throughout; IT must provide business value and be seen to do so, otherwise it will fail and the CIO will be moved on.  The reasons why many CIOs do fail are summarised in what the authors call ‘Value Traps’, most of which provide useful insights.  A good example is the CIO who follows the principle that ‘the customer is always right’ when often the internal customer does not have the information - or is biased - and does not want what is best for the business.  A related message - that is particularly relevant to our work in business partnering - is that the IT person should try to be a ‘peer rather than a vendor’ and should not try to be seen as a special case.  The debates should be around the business issues, not around internal politics and processes.

The book is full of frameworks that help understanding of the issues and retention of the principles.  Some are short and easily memorable, others quite complex and detailed, the latter probably more use to the person who wants to go beyond reading to implementation.  I particularly liked the matrix that ranks projects on two dimensions - source of value and scope of change - and thus allows these to be classified into four categories - internal/informing, external/informing, optimising and reshaping.  The explanation is followed by examples from different companies in each quartile, showing how each type has to be managed in different ways.

There is also the Gartner version of the ‘Virtuous Cycle’ which follows the processes of needs identification, investment, managing change, application development and harvesting.  The final stage of harvesting is about identifying benefits, showing transparency and learning lessons, all of which contribute to future credibility and effectiveness.  One particularly valuable message is that there is no point in going to top management and claiming business impact if you haven’t convinced those at operational level that the benefits are real and lasting.  The benefits can be both hard and soft but they must be believed by those at the sharp end to have credibility.

There are also some excellent references to benchmarking, accepting that it can never be perfect but emphasising the mind-set that comes from comparing with best in class.  There is a particularly useful decision tree for those who believe that benchmarking is not possible or that there is no company to provide a reasonable comparison.

In the latter half of the book there is a powerful chapter on integration of IT into business processes, stressing again that IT should not be a special case.  The CIO of Raytheon found that IT projects were being obstructed because these were not subject to the same decision processes as other investment projects; when the change was made to harmonise and use the same decision framework, the IT department found fewer obstacles in their way.  The authors suggest that the key to success is integrating three elements - formal, political and cultural - when bringing about change through IT.

The final chapter covers the role of the CIO and made me, as a non-IT person, wonder whether the authors were getting too carried away in their desire to extend the influence of the CIO.  The basic message is a good one, that the CIO will benefit and gain credibility if he or she takes on business projects outside the IT arena – the ‘CIO plus’.  I was just about convinced by the idea that good CIOs make good CEOs, as IT becomes a central part of the strategy and competitive advantage of many companies.  But it went too far for me when the authors suggested that CIOs could branch out as CFOs too; I would need to see a few successful examples to be convinced.  However, the overall message was valid and motivating; there has never been a better time to be a CIO and the best ones should be ‘loving it’ and looking for new opportunities.

Overall this is an excellent book for prospective CIOs and for anyone who is keen to make a contribution to success in an IT department of a major company.  I shall be recommending the book as pre-reading for a course we are running on business partnering for IT people in a major company because it contains many of the messages that link to the course objectives.  It certainly seems to be the best book around in this area.

Buy the book here