Making Decisions in the Dark
Does a CEO's lack of technical nous really matter to the organization at large? CEO of US-based computer training company CM IT Linda Burzynski thinks it does.
"One of the key facts we see in business today is the need to stay current with the ever-changing world of technology," Burzynski says. "The most competent CEOs and directors fully understand technology impacts every facet of their enterprise including communication, accounting functions, advertising and marketing, legal, productivity and ultimately, the bottom line. No CEO or director can be up to date on all of the demands and opportunities prevalent today through technology. Smart CEOs and directors surround themselves with smart executives and outsourced IT firms who possess the expertise to apply technology in the real world of business today."
However, surrounding yourself with people who know more than you do may not always be enough to ward off disaster. Bad technology decisions way too often send shock waves all the way through companies, but ultimately end up at the doorstep of a CEO or a CIO, according to Kahn.
"I think it's a huge problem," he says. "If you think about all the technology implementation failures, you have to ask yourself who is making those decisions. Is policy driving those decisions? Do [decision-makers] truly understand the functionality that they need to be able to harness if the technology is to make the place run faster and better? One has to ask why it is that so many failures happen with such tight budgets. With a much more competitive landscape you would think that the C class executives would be paying much more attention to how they're spending their finite resources in both buying and implementing technology."
Instead, organizations frequently buy new software because no one understands they could achieve a desired result with their existing software. Time-poor executives are a major contributing cause, Kahn says. Or the organization will buy a US product that requires a fortune to customize, because buying from SAP or IBM gives insecure executives a sense of security.
"There is an old saying - 'Nobody gets fired for buying IBM' - and while certainly it's not as bad as it used to be, there are organizations that pay a million dollars or so for a solution that could otherwise be got from a local [Australian] firm for $50,000," Hire says. "Plenty of our associates report that. They say that it's quite frustrating when people go and buy a content management system that costs a million dollars when they only need a $20,000 or $50,000 solution."
The other problem that can occur when decision-makers do not understand IT, Hire says, is a tendency to think in the short term and not consider lifetime costs of IT solutions. "They might think: 'Well this will solve our problem this year', but they don't look at how much it will cost them over the life of the technology."
However, Hire points out that gaps in executives' understanding of IT are not always their fault. There is a hole in the university education of IT executives, he says. "A lot of university courses are well and truly out of date by the time the students graduate. The information is out of date, so the executive that does an MBA for instance, might find that the IT component is not that practical or useful to him in understanding [technology] issues."
A good manager will try to fill in these gaps, Hire says.
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