It’s no secret that many information technology projects fail, and big data has not reversed the trend. A professor at Duke University’s Fuqua School of Business argues this track record has significantly more to do with strategy than the actual technology itself.
“While it's really easy to place the blame on chief information officers, eventually we have to acknowledge the fact that there seems to be a fundamental weakness throughout the industry,” Jeremy Petranka said. “If we look more into why projects tend to fail, it's fairly obvious that the real issue at play isn't a lack of IT ability. Instead, it seems to be a lack of deep understanding of what makes up strategy in general, what makes up IT strategy specifically, and how these two connect within an organization.”
Defining strategy itself can be a slippery concept.
“You'd be surprised how many C-level execs I've worked with or taught can't easily answer that question,” said Petranka, assistant dean for Fuqua's new Master of Quantitative Management: Business Analytics program. “Without getting too far into the weeds, you can think of strategy as your organization's intentional identity. It's who you've chosen to be and more importantly, who you've chosen not to be. With limited resources you can't be great at everything. You have to choose your identity. In an organizational setting, this identity has to explicitly define what your measurable goals are, what things you've decided to be good at to achieve those goals, and how you're going to be good at those things.”
In IT, words like cloud computing and big data get thrown around a lot.
“These aren't strategies,” Petranka said. “These are tactics.”
Too many chief information officers are focused on tactics and not strategy, Petranka said. IT strategy must be focused on whose specific problems within an organization the IT group is trying to solve.
“The fact is, there are a huge amount of IT skills that we could bring into an organization,” he said. “The ones we should bring in are the ones that will make us good at the types of problems we'll solve. Everything else is a waste of resources.”
For example, an investment bank focused on high-speed trading needs the ability to develop high-speed applications and cutting edge architecture, but a beautiful presentation is less important, Petranka said. Conversely, for a large health care organization seeking to improve operational efficiency, being able to visualize operational data for doctors, nurses and administrators is significantly more valuable.
What often prevents organizations from focusing correctly, Petranka said, is a failure of IT strategy to be driven by the broader business strategy.
“Remember, IT is just a tool to solve specific business problems,” he said. “If these aren't clear, then there's no chance the IT organization can have a coherent strategy.”
In short, whatever a business needs to be good at to serve its customers, its IT strategy must be focused tightly on helping do that better, Petranka said. Long term, IT strategy must adapt as the overall organization’s trajectory changes, such as in response to industry evolution.
“With this view of strategy, we're now able to more clearly see why so many IT projects and groups are consistency unsuccessful,” Petranka said. “It's not that the IT group doesn't have inherent talent. It's instead the issue that the IT group wasn't built to solve specific types of problems aligned with the organization's ultimate strategy. They weren't empowered to be good at specific types of problems, acknowledging that with limited budgets that would necessarily entail them not being good at other types of problems.”