Educating the business Most senior executives are expected to have an understanding of finance – often through courses such as Finance for non-financial managers. But not many firms offer training in IT for non-IT managers, despite the strategic importance of IT. What is your best practice advice on how to educate business managers in the essential aspects of IT?

Training courses are not a sufficient answer – business managers need practical experience to see IT from a different point of view. Today, many business managers in their 20s and 30s, brought up with PCs and the internet, understand the value of technology and something about how it works. What they lack is an appreciation of just how challenging it is to manage and deliver.

The answer is secondments and rotations into the IT department as a part of management development programmes. Just six months spent on the tech side can make a huge difference. We are seeing more CIOs appointed with business-only backgrounds. We expect these leaders to change attitudes towards spending time in the IT department as essential training for management career success.

Mark Raskino, vice president and research Fellow, Gartner

Organisations and, in particular, CIOs have a real opportunity to improve both the performance and perception of IT through offering training courses for business managers.

This targets the training to the specific needs of managers and professionals working in business functions.

For example, all managers should have a broad understanding of IT-enabled business change, perhaps gained through the new BCS Foundation qualification.

Those working closely with the IT group should have a more detailed knowledge of areas such as project management, information management and business processes. These latter areas may also be useful for IT staff where they do not have this experience.

Working closely with the human resources department, the CIO should create a tailored set of courses that are aimed at improving the IT-enabled business change capability of the organisation and that should translate into improved business partnerships and organisational performance.

Sharm Manwani, Henley Management College

Getting the buy-in from different business divisions and managers on strategic IT projects and initiatives that potentially have an impact across the whole business, can make the difference between IT implementations running smoothly or running into bumps in the road.

From my experience, one of the best ways to educate non-IT managers is to involve them in projects from their inception – sometimes involving a full-time secondment – whereby managers from across the business come to see that the goals of the IT department align with and support their own business objectives.

This is a key component in achieving change successfully. A well-run project that involves non-IT managers will help foster better understanding of how IT supports their department or job.

There is also the key benefit of being able to demonstrate the importance of clearly defined processes, roles and responsibilities, of planning and tracking, clear timescales and interdependencies, change management and, ultimately, how an IT project can be used to transform a business.

Sandra Smith, IS director, Toshiba UK

A good grasp of IT is increasingly as important as a finance or HR understanding. However, just as most line managers do not need to understand the intricacies of treasury or pension regulations, nor do they need a deep technical understanding of IT.

The key issue lies in training line managers to understand and take control of their data and processes. Technology then becomes a means to an end in support of this, rather than an end in itself.

Rob Fraser, group IT director, Boots

Does return on investment (ROI) matter? ROI is typically seen as a key metric to justify IT projects, but some firms recognise that technology has an intangible value that is less easily measured. What tools and techniques have worked for you in demonstrating the true value of IT to the business?

Many business leaders would rather measure IT on return on assets (ROA) because it focuses attention on asset productivity. But the hardware elements of IT projects comprise a diminishing proportion of total costs – so software becomes the key issue.

International accounting standard IAS 38 enables recognition of intangible assets, including software. But industry trends such as software-as-a-service and business process outsourcing give managers new options to treat software as operating expense (opex). So IT and finance leaders must choose with care.

IT as opex focuses on reducing IT costs – appropriate to technology supporting non-core activity. The business visibility of IT as capital expenditure places longer-term focus on extracting value from it – this is better when the aim is strategic competitive advantage. For example, Amazon’s accounts list internal software, content and web development fixed assets of $87m (£46m) for 2005.

Mark Raskino, vice president and research Fellow, Gartner

The methods used to justify IT projects vary although one can argue that in most cases there should be a link to ROI. The exception is for projects that are driven by legislation or events such as the Year 2000 bug. In these cases, the focus is more on risk management than financial benefits.

Of course the link to ROI may range from tangible to intangible. A system that directly reduces cost by replacing a more expensive system with the same functionality has a very tangible ROI.

In the past, headcount reductions through automation were often used to justify investments. With the move to decision support, relationship and strategic systems, the focus is now more on IT as one of the enablers of improved business performance.

The recommendation is that organisations make a strong link between the proposed change and the benefits that are owned by the relevant stakeholders and that any investment in IT is shown to be a critical enabler of the change.

Sharm Manwani, Henley Management College

A failure to understand and articulate the value of IT investments is not only the fastest way to lose your seat at the executive table, but it also dooms your IT investments to under-deliver. The very process of understanding and quantifying both the value directly delivered, and enabled by, IT investments is essential to ensure that the wider change programme is shaped to deliver maximum benefit.

Most importantly, it allows IT investments to be properly considered by the whole executive alongside competing investment cases. But it is also important to understand that sometimes the value in IT investment lies in mitigating business risk, which may be harder to quantify.

Rob Fraser, group IT director, Boots