From an IT Strategy, Architecture and Governance point of view there are five key areas. These are:
1. Business (including business processes),
2. Technology (including systems and networks),
3. Solutions (including applications),
4. Information (including data), and
5. Human Capital (including competence and performance)
Decisions regarding all these key areas are generally complex, but relatively uniform – except in the area of Human Capital where the element of individual attitude can become an unexpected variant. Yet, of all these key areas, which is the one that can have the greatest impact on IT performance improvement and customer (external) service? Of course, it’s Human Capital. An organisation can function very well on mediocre technology and high-performance people. But the reverse does not apply.
Add to this the fact that there is a world-wide shortage of good IT skills, and the number of Information Technology university students is dropping world-wide. Where will this leave IT departments in the future, with growing business demands on IT and the need to enable more strategic business drivers?
It is no wonder that more and more CIOs are starting to worry about their Organisational Capability in the future. We should be worrying about this now. We should be understanding the risks and putting into place plans to mitigate these risks.
The natural consequence of scarce resources is higher costs. And we have already witnessed this over the past five years with the cost of higher level jobs moving up one or two full grade bands.
So, how do we manage this situation? We need to put in place a Human Capital Strategy. We need to give Human Capital the same emphasis (from a strategic planning point of view) as we give Technology, Information, Finance, and other drivers of business performance. In his book “The New Human Capital Strategy”, author Bradley Hall states “Consider the discipline with which companies measure, manage, and grow financial capital. Now, think of how they manage human capital. The “most important asset” is largely unmanaged”.
Line Management have left most of the “responsibility” of people management to HR. But Line Management is “accountable” for the performance of its unit of business – and the highest cost on most IT budgets today is people!
The time has come for Line Management to carry both the “accountability” and the “responsibility” for the performance of the drivers of performance in their business unit – and that includes people performance – and it starts at the top.
In future newsletters we will explore Human Capital Strategy and how it can be applied in IT.