Of all the members of the executive committee, the CIO is the least understood—mostly because his profession is still so young. Over the centuries, the fields of manufacturing, finance, sales, marketing, and engineering have evolved into a set of commonly understood practices, with established vocabularies and operating principles comprehended by every member of the senior team. By contrast, the field of information technology—born only forty years ago with the advent of the IBM 360 in 1964—is prepubescent.
This generation gap means that, in most organizations, the corporate parent—caught in the linguistic chasm between tech-speak and business-speak—has no idea what its youngest child is up to. Management too often shrugs its shoulders, hands the kid a fat allowance, and looks the other way. Later on, the company finds it's paid an outrageous price for the latest technological fad. Instead of addressing the problem, many companies just kick the kid out of the house.
The result in many major corporations is that IT is an expensive mess. Orders are lost. Customers call help desks that aren't helpful. Tracking systems don't track. Indeed, the average business fritters away 20 percent of its corporate IT budget on purchases that fail to achieve their objectives, according to Gartner Research. This adds up to approximately $500 billion wasted worldwide.
Such waste—most egregious in industries like transportation, insurance, telecommunications, banking, and manufacturing—is a direct result of the fact that IT has so far operated without the constructive involvement of the senior management team, despite the best intentions of CIOs. Over the years, IT departments have enthusiastically fulfilled requests by different corporate functions. In the process, companies have created and populated dozens of legacy information systems, each consisting of millions of lines of code, that do not talk to one another. As the data from discrete functions collect in separate databases, more and more resources are required merely to keep the systems functioning properly.
| There is no longer any reason why nontechnical executives should allow themselves to be befuddled by IT discussions. |
While the Y2K crisis impelled many companies to clean up the worst of their legacy systems, most organizations merely did spring cleaning, ignoring the fact that their technological houses badly needed structural repair. Despite advances in technology, most companies continue to struggle with thirty-five-year-old, costly, and rigid information archeology; a cynical executive board; a discouraged IT organization; and throngs of increasingly frustrated customers. Add the confusion of mergers and acquisitions and a long march of poorly implemented "solutions" (ERP, CRM, data warehouses, portals, mobile computing, dashboards, and outsourcing), and you end up with chaos. How can this situation possibly be set right?
Making IT work has little to do with technology itself. Just because a builder can acquire a handsome set of hammers, nails, and planks doesn't mean he can erect a quality house at reasonable cost. Making IT work demands the same things that other parts of the business do: inspired leadership, superb execution, motivated people, and the thoughtful attention and high expectations of senior management.
IT success also requires common understanding. Senior managers know how to talk about finances, because they all speak or understand the language and can agree on a common set of metrics (profit and loss, balance sheets, return on assets, and so on). They can do the same with most elements of operations, customer service, and marketing. So why not with IT? There is no longer any reason why nontechnical executives should allow themselves to be befuddled by IT discussions or bedazzled by three-letter acronyms. And there is no reason that technologists cannot learn to speak the language of business and become perfectly good leaders.
We believe that there are three interdependent, interrelated, and universally applicable principles for executing IT effectively and that it is top management's responsibility to understand and help apply them. The three principles are:
A long-term IT renewal plan linked to corporate strategy. Revamping IT is like renewing a major urban area while people are living there. The effort requires a plan that keeps the entire IT group focused on the company's overarching goals during a multi-year period, makes appropriate investments directed toward near-term cost reduction, and generates a detailed blueprint for long-term systems rejuvenation and value creation.
A simplified, unifying corporate technology platform. Such a platform replaces a wide variety of vertically oriented data silos that serve individual corporate units (HR, accounting, and so on) with a clean, horizontally oriented architecture designed to serve the company as a whole. This is similar to selecting standard-sized pipes and connectors for a city plan.
A highly functional, performance-oriented IT organization. Instead of being treated as if it were different from the rest of the firm or as a loose confederation of tribes, the IT department works as a team and operates according to corporate performance standards.
Like interlocking gears, these principles work together and must be consistently applied. If they mesh well, each reinforces the others. If one is disengaged or turns in the wrong direction, the whole machine starts working against itself or grinds to a halt. 
How Delta Did It
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