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Contents vii
Section II IT Governance 87
Chapter 7 Creating IT Shared Services 88
IT Shared Services: An Overview 89
IT Shared Services: Pros and Cons 92
IT Shared Services: Key Organizational Success Factors 93
Identifying Candidate Services 94
An Integrated Model of IT Shared Services 95
Recommmendations for Creating Effective IT
Shared Services 96
Conclusion 99 • References 99
Chapter 8 A Management Framework for
IT Sourcing 100
A Maturity Model for IT Functions 101
IT Sourcing Options: Theory Versus Practice 105
The “Real” Decision Criteria 109
Decision Criterion #1: Flexibility 109
Decision Criterion #2: Control 109
Decision Criterion #3: Knowledge Enhancement 110
Decision Criterion #4: Business Exigency 110
A Decision Framework for Sourcing IT Functions 111
Identify Your Core IT Functions 111
Create a “Function Sourcing” Profile 111
Evolve Full-Time IT Personnel 113
Encourage Exploration of the Whole Range
of Sourcing Options 114
Combine Sourcing Options Strategically 114
A Management Framework for Successful
Sourcing 115
Develop a Sourcing Strategy 115
Develop a Risk Mitigation Strategy 115
Develop a Governance Strategy 116
Understand the Cost Structures 116
Chapter 9 The IT Budgeting Process 118
Key Concepts in IT Budgeting 119
The Importance of Budgets 121
The IT Planning and Budget Process 123

viii Contents
Corporate Processes 123
IT Processes 125
Assess Actual IT Spending 126
IT Budgeting Practices That Deliver Value 127
Chapter 10 Managing IT- Based Risk 130
A Holistic View of IT-Based Risk 131
Holistic Risk Management: A Portrait 134
Developing a Risk Management Framework 135
Improving Risk Management Capabilities 138
Appendix A A Selection of Risk Classification
Schemes 141
Chapter 11 Information Management: The Nexus
of Business and IT 142
Information Management: How Does It Fit? 143
A Framework For IM 145
Stage One: Develop an IM Policy 145
Stage Two: Articulate the Operational
Components 145
Stage Three: Establish Information Stewardship 146
Stage Four: Build Information Standards 147
Issues In IM 148
Culture and Behavior 148
Information Risk Management 149
Information Value 150
Privacy 150
Knowledge Management 151
The Knowing–Doing Gap 151
Getting Started in IM 151
Appendix A Elements of IM Operations 155
Mini Cases
Building Shared Services at RR Communications 156
Enterprise Architecture at Nationstate Insurance 160
IT Investment at North American Financial 165

Contents ix
Section III IT-Enabled Innovation 169
Chapter 12 Innovation with IT 170
The Need for Innovation: An Historical
Perspective 171
The Need for Innovation Now 171
Understanding Innovation 172
The Value of Innovation 174
Innovation Essentials: Motivation, Support,
and Direction 175
Challenges for IT leaders 177
Facilitating Innovation 179
Chapter 13 Big Data and Social Computing 182
The Social Media/Big Data Opportunity 183
Delivering Business Value with Big Data 185
Innovating with Big Data 189
Pulling in Two Different Directions: The Challenge
for IT Managers 190
First Steps for IT Leaders 192
Chapter 14 Improving the Customer Experience:
An IT Perspective 195
Customer Experience and Business value 196
Many Dimensions of Customer Experience 197
The Role of Technology in Customer Experience 199
Customer Experience Essentials for IT 200
First Steps to Improving Customer Experience 203
Chapter 15 Building Business Intelligence 206
Understanding Business Intelligence 207
The Need for Business Intelligence 208
The Challenge of Business Intelligence 209
The Role of IT in Business Intelligence 211
Improving Business Intelligence 213

x Contents
Chapter 16 Enabling Collaboration with IT 218
Why Collaborate? 219
Characteristics of Collaboration 222
Components of Successful Collaboration 225
The Role of IT in Collaboration 227
First Steps for Facilitating Effective Collaboration 229
Mini Cases
Innovation at International Foods 234
Consumerization of Technology at IFG 239
CRM at Minitrex 243
Customer Service at Datatronics 246
Section IV
IT Portfolio Development and Management 251
Chapter 17 Application Portfolio Management 252
The Applications Quagmire 253
The Benefits of a Portfolio Perspective 254
Making APM Happen 256
Capability 1: Strategy and Governance 258
Capability 2: Inventory Management 262
Capability 3: Reporting and Rationalization 263
Key Lessons Learned 264
Appendix A Application Information 266
Chapter 18 Managing IT Demand 270
Understanding IT Demand 271
The Economics of Demand Management 273
Three Tools for Demand management 273
Key Organizational Enablers for Effective Demand
Management 274
Strategic Initiative Management 275
Application Portfolio Management 276
Enterprise Architecture 276
Business–IT Partnership 277
Governance and Transparency 279

Contents xi
Chapter 19 Creating and Evolving a Technology
Roadmap 283
What is a Technology Roadmap? 284
The Benefits of a Technology Roadmap 285
External Benefits (Effectiveness) 285
Internal Benefits (Efficiency) 286
Elements of the Technology Roadmap 286
Activity #1: Guiding Principles 287
Activity #2: Assess Current Technology 288
Activity #3: Analyze Gaps 289
Activity #4: Evaluate Technology
Landscape 290
Activity #5: Describe Future Technology 291
Activity #6: Outline Migration Strategy 292
Activity #7: Establish Governance 292
Practical Steps for Developing a Technology
Roadmap 294
Appendix A Principles to Guide a Migration
Strategy 296
Chapter 20 Enhancing Development
Productivity 297
The Problem with System Development 298
Trends in System Development 299
Obstacles to Improving System Development
Productivity 302
Improving System Development Productivity: What we
know that Works 304
Next Steps to Improving System Development
Productivity 306
Chapter 21 Information Delivery: IT’s Evolving Role 310
Information and IT: Why Now? 311
Delivering Value Through Information 312
Effective Information Delivery 316
New Information Skills 316
New Information Roles 317
New Information Practices 317

xii Contents
New Information Strategies 318
The Future of Information Delivery 319
Mini Cases
Project Management at MM 324
Working Smarter at Continental Furniture International 328
Managing Technology at Genex Fuels 333
Index 336

Preface
Today, with information technology (IT) driving constant business transformation,
overwhelming organizations with information, enabling 24/7 global operations, and
undermining traditional business models, the challenge for business leaders is not
simply to manage IT, it is to use IT to deliver business value. Whereas until fairly recently,
decisions about IT could be safely delegated to technology specialists after a business
strategy had been developed, IT is now so closely integrated with business that, as one
CIO explained to us, “We can no longer deliver business solutions in our company
without using technology so IT and business strategy must constantly interact with
each other.”
What’s New in This Third Edition?
• Six new chapters focusing on current critical issues in IT management, including
IT shared services; big data and social computing; business intelligence; manag-
ing IT demand; improving the customer experience; and enhancing development
productivity.
• Two significantly revised chapters: on delivering IT functions through different
resourcing options; and innovating with IT.
• Two new mini cases based on real companies and real IT management situations:
Working Smarter at Continental Furniture and Enterprise Architecture at Nationstate
Insurance.
• A revised structure based on reader feedback with six chapters and two mini cases
from the second edition being moved to the Web site.
All too often, in our efforts to prepare future executives to deal effectively with
the issues of IT strategy and management, we lead them into a foreign country where
they encounter a different language, different culture, and different customs. Acronyms
(e.g., SOA, FTP/IP, SDLC, ITIL, ERP), buzzwords (e.g., asymmetric encryption, proxy
servers, agile, enterprise service bus), and the widely adopted practice of abstraction
(e.g., Is a software monitor a person, place, or thing?) present formidable “barriers to
entry” to the technologically uninitiated, but more important, they obscure the impor-
tance of teaching students how to make business decisions about a key organizational
resource. By taking a critical issues perspective, IT Strategy: Issues and Practices treats IT
as a tool to be leveraged to save and/or make money or transform an organization—not
as a study by itself.
As in the first two editions of this book, this third edition combines the experi-
ences and insights of many senior IT managers from leading-edge organizations with
thorough academic research to bring important issues in IT management to life and
demonstrate how IT strategy is put into action in contemporary businesses. This new
edition has been designed around an enhanced set of critical real-world issues in IT
management today, such as innovating with IT, working with big data and social media,
xiii

xiv Preface
enhancing customer experience, and designing for business intelligence and introduces
students to the challenges of making IT decisions that will have significant impacts on
how businesses function and deliver value to stakeholders.
IT Strategy: Issues and Practices focuses on how IT is changing and will continue to
change organizations as we now know them. However, rather than learning concepts
“free of context,” students are introduced to the complex decisions facing real organi-
zations by means of a number of mini cases. These provide an opportunity to apply
the models/theories/frameworks presented and help students integrate and assimilate
this material. By the end of the book, students will have the confidence and ability to
tackle the tough issues regarding IT management and strategy and a clear understand-
ing of their importance in delivering business value.
Key Features of This Book
• A focus on IT management issues as opposed to technology issues
• Critical IT issues explored within their organizational contexts
• Readily applicable models and frameworks for implementing IT strategies
• Mini cases to animate issues and focus classroom discussions on real-world deci-
sions, enabling problem-based learning
• Proven strategies and best practices from leading-edge organizations
• Useful and practical advice and guidelines for delivering value with IT
• Extensive teaching notes for all mini cases
A Different Approach to Teaching IT Strategy
The real world of IT is one of issues—critical issues—such as the following:
• How do we know if we are getting value from our IT investment?
• How can we innovate with IT?
• What specific IT functions should we seek from external providers?
• How do we build an IT leadership team that is a trusted partner with the business?
• How do we enhance IT capabilities?
• What is IT’s role in creating an intelligent business?
• How can we best take advantage of new technologies, such as big data and social
media, in our business?
• How can we manage IT risk?
However, the majority of management information systems (MIS) textbooks are orga-
nized by system category (e.g., supply chain, customer relationship
management, enterprise
resource planning), by system component (e.g., hardware, software,
networks), by system
function (e.g., marketing, financial, human resources), by
system type (e.g., transactional,
decisional, strategic), or by a combination of these. Unfortunately, such an organization
does not promote an understanding of IT management in practice.
IT Strategy: Issues and Practices tackles the real-world challenges of IT manage-
ment. First, it explores a set of the most important issues facing IT managers today, and
second, it provides a series of mini cases that present these critical IT issues within the
context of real organizations. By focusing the text as well as the mini cases on today’s
critical issues, the book naturally reinforces problem-based learning.

Preface xv
IT Strategy: Issues and Practices includes thirteen mini cases—each based on a real
company presented anonymously.1
Mini cases are not simply abbreviated versions of
standard, full-length business cases. They differ in two significant ways:
1. A horizontal perspective. Unlike standard cases that develop a single issue within
an organizational setting (i.e., a “vertical” slice of organizational life), mini cases
take a “horizontal” slice through a number of coexistent issues. Rather than looking
for a solution to a specific problem, as in a standard case, students analyzing a mini
case must first identify and prioritize the issues embedded within the case. This mim-
ics real life in organizations where the challenge lies in “knowing where to start” as
opposed to “solving a predefined problem.”
2. Highly relevant information. Mini cases are densely written. Unlike standard
cases, which intermix irrelevant information, in a mini case, each sentence exists for
a reason and reflects relevant information. As a result, students must analyze each
case very carefully so as not to miss critical aspects of the situation.
Teaching with mini cases is, thus, very different than teaching with standard cases.
With mini cases, students must determine what is really going on within the organiza-
tion. What first appears as a straightforward “technology” problem may in fact be a
political problem or one of five other “technology” problems. Detective work is, there-
fore, required. The problem identification and prioritization skills needed are essential
skills for future managers to learn for the simple reason that it is not possible for organi-
zations to tackle all of their problems concurrently. Mini cases help teach these skills to
students and can balance the problem-solving skills learned in other classes. Best of all,
detective work is fun and promotes lively classroom discussion.
Toassistinstructors,extensiveteachingnotesareavailableforallminicases.Developed
by the authors and based on “tried and true” in-class experience, these notes include case
summaries, identify the key issues within each case, present ancillary
information about the
company/industry represented in the case, and offer guidelines for organizing the class-
room discussion. Because of the structure of these mini cases and their embedded issues, it
is common for teaching notes to exceed the length of the actual mini case!
This book is most appropriate for MIS courses where the goal is to understand how
IT delivers organizational value. These courses are frequently labeled “IT Strategy” or
“IT Management” and are offered within undergraduate as well as MBA programs. For
undergraduate juniors and seniors in business and commerce programs, this is usually
the “capstone” MIS course. For MBA students, this course may be the compulsory core
course in MIS, or it may be an elective course.
Each chapter and mini case in this book has been thoroughly tested in a variety
of undergraduate, graduate, and executive programs at Queen’s School of Business.2
1
We are unable to identify these leading-edge companies by agreements established as part of our overall
research program (described later).
2
Queen’s School of Business is one of the world’s premier business schools, with a faculty team renowned
for its business experience and academic credentials. The School has earned international recognition for
its innovative approaches to team-based and experiential learning. In addition to its highly acclaimed MBA
programs, Queen’s School of Business is also home to Canada’s most prestigious undergraduate business
program and several outstanding graduate programs. As well, the School is one of the world’s largest and
most respected providers of executive education.

xvi Preface
These materials have proven highly successful within all programs because we adapt
how the material is presented according to the level of the students. Whereas under-
graduate students “learn” about critical business issues from the book and mini cases
for the first time, graduate students are able to “relate” to these same critical issues
based on their previous business experience. As a result, graduate students are able to
introduce personal experiences into the discussion of these critical IT issues.
Organization of This Book
One of the advantages of an issues-focused structure is that chapters can be approached
in any order because they do not build on one another. Chapter order is immaterial; that
is, one does not need to read the first three chapters to understand the fourth. This pro-
vides an instructor with maximum flexibility to organize a course as he or she sees fit.
Thus, within different courses/programs, the order of topics can be changed to focus on
different IT concepts.
Furthermore, because each mini case includes multiple issues, they, too, can be
used to serve different purposes. For example, the mini case “Building Shared Services
at RR Communications” can be used to focus on issues of governance, organizational
structure, and/or change management just as easily as shared services. The result is a
rich set of instructional materials that lends itself well to a variety of pedagogical appli-
cations, particularly problem-based learning, and that clearly illustrates the reality of IT
strategy in action.
The book is organized into four sections, each emphasizing a key component of
developing and delivering effective IT strategy:
• Section I: Delivering Value with IT is designed to examine the complex ways that
IT and business value are related. Over the past twenty years, researchers and prac-
titioners have come to understand that “business value” can mean many
different
things when applied to IT. Chapter 1 (Developing and Delivering on the IT Value
Proposition) explores these concepts in depth. Unlike the simplistic value propo-
sitions often used when implementing IT in organizations, this
chapter
presents
“value” as a multilayered business construct that must be effectively
managed at
several levels if technology is to achieve the benefits expected. Chapter 2 (Developing
IT Strategy for Business Value) examines the dynamic
interrelationship between
business and IT strategy and looks at the processes and critical
success
factors
used by organizations to ensure that both are well aligned. Chapter 3 (Linking IT
to Business Metrics) discusses new ways of measuring IT’s
effectiveness that pro-
mote closer business–IT alignment and help drive greater business value. Chapter
4 (Building a Strong Relationship with the Business) examines the nature of the
business–IT relationship and the characteristics of an effective relationship that
delivers real value to the enterprise. Chapter 5 (Communicating with Business
Managers) explores the business and interpersonal competencies that IT staff will
need in order to do their jobs effectively over the next five to seven years and what
companies should be doing to develop them. Finally, Chapter 6 (Building Better IT
Leaders from the Bottom Up) tackles the increasing need for improved leadership
skills in all IT staff and examines the expectations of the business for strategic and
innovative guidance from IT.

Preface xvii
In the mini cases associated with this section, the concepts of delivering
value with IT are explored in a number of different ways. We see business and
IT
executives at Hefty Hardware grappling with conflicting priorities and per-
spectives and how best to work together to achieve the company’s strategy. In
“Investing in TUFS,” CIO Martin Drysdale watches as all of the work his IT depart-
ment has put into a major new system fails to deliver value. And the “IT Planning
at ModMeters” mini case follows CIO Brian Smith’s efforts to create a strategic
IT plan that will align with business strategy, keep IT running, and not increase
IT’s budget.
• Section II: IT Governance explores key concepts in how the IT organization is
structured and managed to effectively deliver IT products and services to the orga-
nization. Chapter 7 (IT Shared Services) discusses how IT shared services should be
selected, organized, managed, and governed to achieve improved organizational
performance. Chapter 8 (A Management Framework for IT Sourcing) examines
how organizations are choosing to source and deliver different types of IT functions
and presents a framework to guide sourcing decisions. Chapter 9 (The IT Budgeting
Process) describes the “evil twin” of IT strategy, discussing how budgeting mecha-
nisms can significantly undermine effective business strategies and suggesting
practices for addressing this problem while maintaining traditional fiscal account-
ability. Chapter 10 (Managing IT-based Risk) describes how many IT organizations
have been given the responsibility of not only managing risk in their own activities
(i.e., project development, operations, and delivering business strategy) but also
of managing IT-based risk in all company activities (e.g., mobile computing, file
sharing, and online access to information and software) and the need for a holistic
framework to understand and deal with risk effectively. Chapter 11 (Information
Management: The Nexus of Business and IT) describes how new organizational
needs for more useful and integrated information are driving the development of
business-oriented functions within IT that focus specifically on information and
knowledge, as opposed to applications and data.
The mini cases in this section examine the difficulties of managing com-
plex IT issues when they intersect substantially with important business issues.
In “Building Shared Services at RR Communications,” we see an IT organiza-
tion in transition from a traditional divisional structure and governance model
to a more centralized enterprise model, and the long-term challenges experi-
enced by CIO Vince Patton in changing both business and IT practices, includ-
ing information management and delivery, to support this new approach. In
“Enterprise Architecture at Nationstate Insurance,” CIO Jane Denton endeavors
to make IT more flexible and agile, while incorporating new and emerging tech-
nologies into its strategy. In “IT Investment at North American Financial,” we
show the opportunities and challenges involved in prioritizing and resourcing
enterprisewide IT projects and monitoring that anticipated benefits are being
achieved.
• Section III: IT-Enabled Innovation discusses some of the ways technology is
being used to transform organizations. Chapter 12 (Innovation with IT) examines
the nature and importance of innovation with IT and describes a typical inno-
vation life cycle. Chapter 13 (Big Data and Social Computing) discusses how IT
leaders are incorporating big data and social media concepts and technologies

xviii Preface
to successfully deliver business value in new ways. Chapter 14 (Improving the
Customer Experience: An IT Perspective) explores the IT function’s role in creating
and improving an organization’s customer experiences and the role of technology
in helping companies to understand and learn from their customers’ experiences.
Chapter 15 (Building Business Intelligence) looks at the nature of business intelli-
gence and its relationship to data, information, and knowledge and how IT can be
used to build a more intelligent organization. Chapter 16 (Enabling Collaboration
with IT) identifies the principal forms of collaboration used in organizations, the
primary business drivers involved in them, how their business value is measured,
and the roles of IT and the business in enabling collaboration.
The mini cases in this section focus on the key challenges companies face in
innovating with IT. “Innovation at International Foods” contrasts the need for pro-
cess and control in corporate IT with the strong push to innovate with technology
and the difficulties that ensue from the clash of style and culture. “Consumerization
of Technology at IFG” looks at issues such as “bring your own device” (BYOD) to
the workplace. In “CRM at Minitrex,” we see some of the internal technological and
political conflicts that result from a strategic decision to become more customercen-
tric. Finally, “Customer Service at Datatronics” explores the importance of present-
ing unified, customer-facing IT to customers.
• Section IV: IT Portfolio Development and Management looks at how the IT
function must transform itself to be able to deliver business value effectively in
the future. Chapter 17 (Application Portfolio Management) describes the ongoing
management process of categorizing, assessing, and rationalizing the IT application
portfolio. Chapter 18 (Managing IT Demand) looks at the often neglected issue of
demand management (as opposed to supply management), explores the root causes
of the demand for IT services, and identifies a number of tools and enablers to
facilitate more effective demand management. Chapter 19 (Creating and Evolving
a Technology Roadmap) examines the challenges IT managers face in implement-
ing new infrastructure, technology standards, and types of technology in their real-
world business and technical environments, which is composed of a huge variety of
hardware, software, applications, and other technologies, some of which date back
more than thirty years. Chapter 20 (Enhancing Development Productivity) explores
how system development practices are changing and how managers can create
an environment to promote improved development productivity. And Chapter 21
(Information Delivery: IT’s Evolving Role) examines the fresh challenges IT faces in
managing the exponential growth of data and digital assets; privacy and account-
ability concerns; and new demands for access to information on an anywhere, any-
time basis.
The mini cases associated with this section describe many of these themes
embedded within real organizational contexts. “Project Management at MM” mini
case shows how a top-priority, strategic project can take a wrong turn when proj-
ect management skills are ineffective. “Working Smarter at Continental Furniture”
mini case follows an initiative to improve the company’s analytics so it can reduce
its environmental impact. And in the mini case “Managing Technology at Genex
Fuels,” we see CIO Nick Devlin trying to implement enterprisewide technology for
competitive advantage in an organization that has been limping along with obscure
and outdated systems.

Preface xix
Supplementary Materials
Online Instructor Resource Center
The following supplements are available online to adopting instructors:
• PowerPoint Lecture Notes
• Image Library (text art)
• Extensive Teaching Notes for all Mini cases
• Additional chapters including Developing IT Professionalism; IT Sourcing; Master
DataManagement;DevelopingITCapabilities;TheIdentityManagementChallenge;
Social Computing; Managing Perceptions of IT; IT in the New World of Corporate
Governance Reforms; Enhancing Customer Experiences with Technology; Creating
Digital Dashboards; and Managing Electronic Communications.
• Additional mini cases, including IT Leadership at MaxTrade; Creating a Process-Driven
Organization at Ag-Credit; Information Management at Homestyle Hotels; Knowledge
Management at Acme Consulting; Desktop Provisioning at CanCredit; and Leveraging
IT Vendors at SleepSmart.
For detailed descriptions of all of the supplements just listed, please visit http://
www.pearsonhighered.com/mckeen.
CourseSmart eTextbooks Online
CourseSmart is an exciting new choice for students looking to save money. As an alter-
native to purchasing the print textbook, students can purchase an electronic version of
the same content and save up to 50 percent off the suggested list price of the print text.
With a CourseSmart etextbook, students can search the text, make notes online, print
out reading assignments that incorporate lecture notes, and bookmark important pas-
sages for later review. www.coursesmart.com.
The Genesis of This Book
Since 1990 we have been meeting quarterly with a group of senior IT managers from
a number of leading-edge organizations (e.g., Eli Lilly, BMO, Honda, HP, CIBC, IBM,
Sears, Bell Canada, MacDonalds, and Sun Life) to identify and discuss critical IT manage-
ment issues. This focus group represents a wide variety of industry sectors (e.g., retail,

manufacturing, pharmaceutical, banking, telecommunications, insurance, media, food
processing, government, and automotive). Originally, it was established to meet the com-
panies’ needs for well-balanced, thoughtful, yet practical information on emerging IT
management topics, about which little or no research was available. However, we soon
recognized the value of this premise for our own research in the rapidly evolving field
of IT management. As a result, it quickly became a full-scale research program in which
we were able to use the focus group as an “early warning system” to document new IT
management issues, develop case studies around them, and explore more collaborative
approaches to identifying trends, challenges, and effective practices in each topic area.3
3
This now includes best practice case studies, field research in organizations, multidisciplinary qualitative
and quantitative research projects, and participation in numerous CIO research consortia.

xx Preface
As we shared our materials with our business students, we realized that this issues-
based approach resonated strongly with them, and we began to incorporate more of our
research into the classroom. This book is the result of our many years’ work with senior
IT managers, in organizations, and with students in the classroom.
Each issue in this book has been selected collaboratively by the focus group after
debate and discussion. As facilitators, our job has been to keep the group’s focus on IT
management issues, not technology per se. In preparation for each meeting, focus group
members researched the topic within their own organization, often involving a number
of members of their senior IT management team as well as subject matter experts in
the process. To guide them, we provided a series of questions about the issue, although
members are always free to explore it as they see fit. This approach provided both struc-
ture for the ensuing discussion and flexibility for those members whose
organizations
are approaching the issue in a different fashion.
The focus group then met in a full-day session, where the members discussed all
aspects of the issue. Many also shared corporate documents with the group. We facilitated
the discussion, in particular pushing the group to achieve a common understanding of
the dimensions of the issue and seeking examples, best practices, and guidelines for deal-
ing with the challenges involved. Following each session, we wrote a report based on the
discussion, incorporating relevant academic and practitioner materials where these were
available. (Because some topics are “bleeding edge,” there is often little traditional IT
research available on them.)
Each report has three parts:
1. A description of the issue and the challenges it presents for both business and IT
managers
2. Models and concepts derived from the literature to position the issue within a con-
textual framework
3. Near-term strategies (i.e., those that can be implemented immediately) that have
proven successful within organizations for dealing with the specific issue
Each chapter in this book focuses on one of these critical IT issues. We have learned
over the years that the issues themselves vary little across industries and organizations,
even in enterprises with unique IT strategies. However, each organization tackles the
same issue somewhat differently. It is this diversity that provides the richness of insight
in these chapters. Our collaborative research approach is based on our belief that when
dealing with complex and leading-edge issues, “everyone has part of the solution.”
Every focus group, therefore, provides us an opportunity to explore a topic from a

variety of perspectives and to integrate different experiences (both successful and oth-
erwise) so that collectively, a thorough understanding of each issue can be developed
and strategies for how it can be managed most successfully can be identified.

About the Authors
James D. McKeen is Professor Emeritus at the Queen’s School of Business. He has been
working in the IT field for many years as a practitioner, researcher, and consultant. In
2011, he was named the “IT Educator of the Year” by ComputerWorld Canada. Jim has
taught at universities in the United Kingdom, France, Germany, and the United States.
His research is widely published in a number of leading journals and he is the coau-
thor (with Heather Smith) of five books on IT management. Their most recent book—IT
Strategy: Issues and Practices (2nd ed.)—was the best-selling business book in Canada
(Globe and Mail, April 2012).
Heather A. Smith has been named the most-published researcher on IT management
issues in two successive studies (2006, 2009). A senior research associate with Queen’s
University School of Business, she is the author of five books, the most recent being IT
Strategy: Issues and Practices (Pearson Prentice Hall, 2012). She is also a senior research
associate with the American Society for Information Management’s Advanced Practices
Council. Aformer senior IT manager, she is codirector of the IT Management Forum and
the CIO Brief, which facilitate interorganizational learning among senior IT executives.
In addition, she consults and collaborates with organizations worldwide.
xxi

Acknowledgments
The work contained in this book is based on numerous meetings with many senior IT
managers. We would like to acknowledge our indebtedness to the following individuals
who willingly shared their insights based on their experiences “earned the hard way”:
Michael Balenzano, Sergei Beliaev, Matthias Benfey, Nastaran Bisheban, Peter
Borden, Eduardo Cadena, Dale Castle, Marc Collins, Diane Cope, Dan Di Salvo,
Ken Dschankilic, Michael East, Nada Farah, Mark Gillard, Gary Goldsmith, Ian
Graham, Keiko Gutierrez, Maureen Hall, Bruce Harding, Theresa Harrington,
Tom Hopson, Heather Hutchison, Jim Irich, Zeeshan Khan, Joanne Lafreniere,
Konstantine Liris, Lisa MacKay, Mark O’Gorman, Amin Panjwani, Troy Pariag,
Brian Patton, Marius Podaru, Helen Restivo, Pat Sadler, A. F. Salam, Ashish
Saxena, Joanne Scher, Stewart Scott, Andy Secord, Marie Shafi, Helen Shih, Trudy
Sykes, Bruce Thompson, Raju Uppalapati, Len Van Greuning, Laurie Schatzberg,
Ted Vincent, and Bond Wetherbe.
We would also like to recognize the contribution of Queen’s School of Business
to this work. The school has facilitated and supported our vision of better integrat-
ing academic research and practice and has helped make our collaborative approach
to the study of IT management and strategy an effective model for interorganizational
learning.
James D. McKeen
Kingston, Ontario
Heather A. Smith
School of Business
June 2014
xxii

S ect ion I
Delivering Value with IT
Chapter 1 Developing and Delivering on the IT Value Proposition
Chapter 2 Developing IT Strategy for Business Value
Chapter 3 Linking IT to Business Metrics
Chapter 4 Building a Strong Relationship with the Business
Chapter 5 Communicating with Business Managers
Chapter 6 Building Better IT Leaders from the Bottom Up
Mini Cases
■ Delivering Business Value with IT at Hefty Hardware
■ Investing in TUFS
■ IT Planning at ModMeters

2
C h a p t e r
1 Developing and Delivering
on the IT Value Proposition1
1
This chapter is based on the authors’ previously published article, Smith, H. A., and J. D. McKeen.
“Developing and Delivering on the IT Value Proposition.” Communications of the Association for Information
Systems 11 (April 2003): 438–50. Reproduced by permission of the Association for Information Systems.
I
t’s déjà vu all over again. For at least twenty years, business leaders have been

trying to figure out exactly how and where IT can be of value in their organizations.
And IT managers have been trying to learn how to deliver this value. When IT was
used mainly as a productivity improvement tool in small areas of a business, this was
a
relatively straightforward process. Value was measured by reduced head counts—
usually in clerical areas—and/or the ability to process more transactions per person.
However, as systems grew in scope and complexity, unfortunately so did the risks. Very
few companies escaped this period without making at least a few disastrous invest-
ments in systems that didn’t work or didn’t deliver the bottom-line benefits executives
thought they would. Naturally, fingers were pointed at IT.
With the advent of the strategic use of IT in business, it became even more difficult
to isolate and deliver on the IT value proposition. It was often hard to tell if an invest-
ment had paid off. Who could say how many competitors had been deterred or how
many customers had been attracted by a particular IT initiative? Many companies can
tell horror stories of how they have been left with a substantial investment in new forms
of technology with little to show for it. Although over the years there have been many
improvements in where and how IT investments are made and good controls have been
established to limit time and cost overruns, we are still not able to accurately articulate
and deliver on a value proposition for IT when it comes to anything other than simple
productivity improvements or cost savings.
Problems in delivering IT value can lie with how a value proposition is conceived
or in what is done to actually implement an idea—that is, selecting the right project and
doing the project right (Cooper et al. 2000; McKeen and Smith 2003; Peslak 2012). In
addition, although most firms attempt to calculate the expected payback of an IT invest-
ment before making it, few actually follow up to ensure that value has been achieved or
to question what needs to be done to make sure that value will be delivered.

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kupeita ja korkeuksien huippuja. Kaukana heidän takanaan näkyi jo
korpi, jonka läpi he olivat tulleet, ja keltakylkiseen männikköön
paistoi päivä kuin kullattuun onnelaan. Kevättä henki ympäristö ja
sen tuoksu lemusi ilmassa.
Kanerva oli koko talven tätä retkeä mielessään miettinyt, oli
kuvitellut sen niin äärettömän suurenmoiseksi ja ihanaksi, ja uniensa
himmeässä maailmassa hän vaelsi usein näitä samoja saloja, joita
nytkin kulkivat. Täällä hän olisi toivonut voivansa sanoa sen, mitä
tunsi, kertoa rajattoman rakkautensa ja ilmaista aavistelevat ilonsa.
Löytäisikö hän vastineen lemmelleen? Löytäisikö Irjan syvällisten
silmien loistosta sen satumaailman, jonka luuli niissä olevan?
Ymmärtäisikö sielu sielua?
Hän silmäsi Irjaan, joka kulki hänen vierellään hohtavan kauniina
ja aamuvirkkuna, mutta niin surullisen haaveilevana ja
kaihomielisenä. Irjan katse näytti tähtäävän johonkin hyvin kauas ja
mieli kuvailevan jotakin muuta kuin mitä edessä näki. Oi, oliko tuon
hennon poven alla sykkivä sydän, joka tuntisi, uskoisi ja luottaisi
niinkuin hän!
He olivat tulleet aukealle suolle, jonka laidasta Karhuvaara alkoi
kohota. Ensin oli loivaa myötälettä, mutta vähitellen nousu jyrkkeni,
muuttui louhikkoiseksi, satumaiseksi. Hyvin kaukana jo heidän
takanaan siinti Vasuharju ja muilla suunnilla suunnattomia
valkopäisiä kukkuloita. Kuta korkeammalle ehtivät, sitä enemmän
nousu viehätti ja sitä korkeammalle mieli teki.
Onko teistä tämä retkemme hauska?… Me läksimme maailmasta,
tulimme tänne kevään henkeen emmekä ikänä kaipaa takaisin,
sanoi Kanerva hurmaantuneena.

On, on. Tämä on suurenmoista ja muistoja virkistävää, sanoi Irja
ja riensi edellä.
Villi riemu tapasi Kanervan. Hänestä tuntui kuin taivaan portit
aukenisivat… näki edellään rakastettunsa hentona, notkeana ja
verevänä kiipeilevän tuttuja louhikoita, näki kuin enkelin, jota
keväisen aamuauringon säteet hyväilivät. Hän riensi puolihulluna
perässä, päätti suoria Irjan syliinsä ja puristaa sydämelleen niin, että
sen autio tyhjyys täyttyisi ja tuskat loppuisivat…
Mutta Irjan katse oli niin omituisen outo, niin kaihon ja surun
voittama, että Kanerva säpsähti, ojennettu käsi putosi takaisin…
Ja samalla he pääsivätkin perille Karhuvaaran korkeimmalle
huipulle. Irja hyppäsi kivelle ja silmäili kaukaisia maailmoja. Kanerva
seisoi vieressä. Mitä hän sanoisi? Miten ilmoittaisi? Hän oli kuin
kadottanut oman itsensä. Hän näki koko avaruuden kuin
kultameressä säkenöivän, näki vierivieressä korkeita valkopää-
kukkuloita kuin lumilinnoja, niiden välissä soita ja jänkkiä ja repaleita
palaneista saloista…
Hän seurasi Irjan katsetta, joka liiteli taivaanrannasta toiseen, kävi
pohjoisella, levähti lännellä, mutta lopulta asettui etelälle…
Etelääkö te rakastatte? kysyi hän hiljaa.
Niin, etelää, tuota kaukaista ja siintävää, vastasi Irja yhtä hiljaa.
He katselivat kauan äänettöminä, kuinka keväinen, avara maailma
kiertyi kultaisen aamuauringon loistoon, kuinka taivaanrannat olivat
kummallisen hienon harson peitossa. Idässä näkyi silmänsiintämiin
tummaa saloa ja kaljupäitä kukkuloita. Eteläinen taivaanranta oli

keveän pilven peitossa, mutta hyvin kaukana siinti muiden pitäjien
kirkontorneja ja vilahti vaarojen välistä leveän joen polveuksia. Mutta
pohjoinen taivas oli niin kalsean ja kylmän näköinen.
Ettekö rakasta pohjolaani? kysyi Kanerva kuin houreissaan.
Hän näki Irjan kääntävän katseensa pohjalle ja kuuli hetken
kuluttua hänen vastaavan:
Pohjolanne on niin kylmän sinervä ja riemuton…
Kanerva luuli siinä olevan vastineen hänen haaveilleen, toiveilleen
ja lemmelleen. Hän tunsi kuin puristuvansa kokoon, likistyvänsä
vasten vaaran lakea ja laskeuvansa maahan. Tunsi toivonsa
loppuvan, lempensä sammuvan ja ilonsa katoavan, näki taivaan
sinen muuttuvan mustaksi; kuului kuin koko avaruudessa soitettaisiin
hänen kuolinkellojaan, ja hänestä näytti kuin korvet olisivat aidatuita
kalmistoja ja korkeat vaarojen laet hautapatsaita…
Ja näki Irjan tähtäävän etelälle, niinkuin tahtoisi nähdä etelän
usvain taakse… nähdä jonkun, jota ikävöi. Ja onton kolkosti soi nyt
hänen korvissaan Irjan lempilaulu.
Lempi kestää iäti… iäti!
9.
Touon aika oli tullut.
Puolen peltoa on Kanerva kyntänyt ja istahtaa nyt pientareelle…

Hän istuu hartiat kumarassa, posket kämmeniä vasten. Hän on
laihtunut niin että silmät ovat syvällä kuopissa; niissä leimahtaa
vähäväliä omituinen, synkkä tuli, ja väliin kuolon kalpeus peittää
kasvot. Hän näyttää väsyneeltä ja rasitetulta, niin uupuneelta kuin ei
olisi levähtänyt kuukausiin.
Ilta on lämmin ja suloinen. Piennar työntää ävärtä, ja ruispelto on
tummanvihreä. Kuuluu käen kukuntaa Vasuharjun alta kuusikosta ja
vesilintujen kaakatusta joelta.
Kanerva istuu ajatuksissaan, ei kuule käkien kukuntaa, ei mieli
iloitse siitä, että kylvön aika näyttää niin lupaavalta. Hänen suuri
keväinen unelmansa on loppunut, sammunut on toivo kaikesta siitä,
jota oli ihannoinut ja jumaloinut. Se suuri, synkkä erämaa, jonka
laitaan hän lapsena jäi, oli nyt vasta puoliväliin taivallettu, eikä enää
jaksanut uskoa, että löytyisi kosteikkoa tulevillakaan taipaleilla.
Alakuloinen mieli synnyttää ikävän toisensa perästä, ja pettyneet
toiveet hakkaavat sydäntä kuin rautavasaralla.
Hän on taistellut, ja nyt hän luulee olevansa voitolla. Mutta ankara
on hänen taistelunsa ollut, kovempi kuin hän oli osannut koskaan
aavistaa. Sillä hän on kadottanut kaiken toivon elämänsä onnesta,
uskon siihen, että on olemassa todellista, puhdasta, kaikki kestävää
rakkautta, ja luottamuksen ihmisiin. Yksi ainoa toivo on vielä, hänen
lapsuutensa vankka usko, että ruumiillinen työ pelastaa kaikesta
pahasta.
Oi, että hänen täytyi kadottaa ihana satumaailmansa ja tuntea ja
nähdä, että se unissa kuvailtu, kirkastettu morsian ei ollutkaan
muuta kuin saastainen, likainen varjokuva hänen ihannemaailmansa
ystävästä.

Hän vaipuu yhä syvempiin mietteisiin siitä, mitä hän on elänyt
kuluneena talvena, mitä tuntenut kevätöinä ja kuinka raivonnut yksin
valvoessaan. Ja kummastellen hän näkee, että hän elää vielä, ettei
ole tehnyt hullun töitä, ja että hän vieläkin luottaa lapsuutensa
uskoon. Kummallisia, outoja kysymyksiä herää hänen mielessään ja
kamaloita aavistuksia omasta elämästään.
Hän muistaa niin selvään joka tapauksen Irjan seurassa, ja
varsinkin heidän viimeisen retkensä Karhuvaaralle. Se retki oli kuin
suuren suuri satumaailma, johon elävänä pääsi ja jota hän unissaan
oli kuvitellut. Oli juuri semmoinen kevätaamu, jona hän oli toivonut
voivansa viettää lempensä pyhää sunnuntaita…
Mutta hän ei jaksa ajatella loppuun sitä retkeä… se ikäänkuin
päättyy siihen, kun näki Irjan kivellä seisovan ja etelän ilmoille
katselevan. Eikä hän edemmäksi pyrikään, sillä se, mitä hän sitten
jäljestä tunsi ja tiesi, oli repivää ja raatelevaa tappelua, joka tahtoi
kiskoa sielun ruumiista ja viedä viimeisen luottamuksen…
Hän sattuu silmäämään tielle ja näkee Irjan kävelevän nuoren
metsäherran kanssa. Hän kuulee, kuinka Irja nauraa… näkee herran
kepillään viuhtovan…
Tumma puna nousee poskille, silmissä leimahtaa hirvittävä tuli,
kämmenet käyvät nyrkkiin ja hän höpisee…
Kavala, kaunis helvetin lapsi… noin minä sinut raatelisin…
Mutta äkkiä hän herpoaa, kalvava ikävä tunkee sydämeen, ja hän
purskahtaa itkuun… kuin lapsi…
Ja herää siitä, kun Musta hirnuu ja tahtoo illalliselle.

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