Peer to Peer Magazine

PEER TO PEER: THE QUARTERLY MAGA ZINE OF ILTA 54 We see now in many markets, including legal, a rush into cloud computing. That surge is no more rational, I would assert, than the rush into any popular fashion accessory. In fact, cloud computing is not new. It is, however, rebranded and generating the kind of buzz that prompts lawyers to demand their IT departments "do something" in cloud computing. FUSING STRATEGIES Three things must change to begin to fuse the firm's IT and business objectives into a common strategy: 1. IT leadership; 2. The IT mandate; and 3. IT governance. 1. IT Leadership When an organization chooses a chief executive, it looks for certain qualities: leadership skills, communication skills and the ability to envision and then execute that vision, for example. Many organizations, including law firms, have expanded the chief role far beyond the executive suite. Nowadays it's commonplace for every major department or division inside an organization to have its own chief. In this way, IT departments have acquired chief information officers (CIOs) and chief technology officers. But, we have often excused these new CIOs from the expectations that apply to chief executives. Many CIOs, as a consequence, are CINOs: chiefs in name only. They lack the leadership and management qualities necessary to align IT strategies with the principal business strategies of their firm or company. The process by which we select these chiefs is often to blame for their lack of fundamental business skills. Many IT departments are led by "super peers": consummate technicians who have risen through the ranks and come to be seen as best of breed by their peers. However, the skills necessary to assure, say, that local and wide area networks function efficiently and at high availability levels are not necessarily the skills needed to transform business processes and foster innovation. Indeed, one can argue that the conservative outlook and risk aversion needed in an IT infrastructure manager is antithetical to the kind of dynamism and acceptance of risk found in a true business leader. Those conservative traits may also lead "super peer" chiefs into ovine and consumerist decision-making. So, the first task in aligning IT and business strategy is to look closely at your IT leadership choices and ask a series of questions. • Is your IT chief a chief technician or a chief executive? • Does he cultivate other leaders inside the IT organization who are driven not by technology imperatives but by business imperatives? • Is the IT organization insular and invisible, as it might be if led by a technician, or connected and highly visible in everyday operations? • Can your technology leaders operate within the upper management strata of your firm as peers to top management, rather than as suppliers? • Can they embrace the strategic imperatives of the firm in formulating their own plans? Can they understand them? 2. The IT Mandate A second line of inquiry in aligning IT strategy with firm strategy concerns what we ask the IT function to do. The principal and very often only mandate that drives most IT functions is that of "keeping the lights on." On average, more than 90 percent of IT budgets go to procuring and maintaining basic IT infrastructure: the servers, networks, desktops, laptops and basic applications that keep operations running from day to day. Very often, 100 percent of the thoughts of IT management are devoted to those tasks. The result is an inherently conservative organization that is consumed with the details of day-to-day operations and useless in seeking out innovations that will help to make the underlying business more profitable or competitive. If you doubt this, then ask what metrics are used to measure the success of your IT operations. Most often, budget compliance is the only metric that rises to the attention of top management in the firm. When that is true, you are communicating to IT management that "keeping on keeping on" is their only job. To change all that, begin to measure the impact that technology initiatives have on firm performance — on profitability, profit per partner or revenue per lawyer. You needn't start with measuring the impact of basic IT operations. The nexus between basic operations and profitability is too tenuous (which suggests an IT infrastructure management strategy focused on efficiency). Instead, start with discrete projects. In my own firm, we have identified the technology-related operations that most impact profitability and now manage and measure them separately from basic IT operations. And impact on profitability is an everyday metric for those groups. For example, the tools and techniques our firm uses to manage practice economics grew out of one of those groups. We can now examine the pricing and project management initiatives that use those tools and techniques and determine with some precision their impact on profitability. Being able to point to a positive impact on profitability helps to broaden use of these tools and techniques. You can change the expectation under which your IT group operates simply FEATURES We have identified the technology-related operations that most impact profitability and now manage and measure them separately from basic IT operations.

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