Developing Principles of IT – Rationale and Examples

IT principles are an invaluable tool for consistent and effective decision-making, which helps you and your team stay on the right path whenever the way ahead seems uncertain. Whether you’re considering the merits of investing in an expensive hot site or debating whether to accept a feature request requiring custom code, having a directive and unambiguous set of principles can help you, your team, and key internal stakeholders align on the right decision with reduced friction. Similar to organizational values, IT principles communicate what’s important for your business. They can help guide technology choices, resourcing decisions, and the way your team should approach their work. Moreover, they are great to share with other business units to gain alignment and support for what your team is doing. They do all this by providing a solid and well-considered foundation for decision-making. The way that you respond to new ideas, issues, and planning initiatives will show the consistency of thought because you will be evaluating them against a set of principles specifically designed to enable your business to win.

Principles of IT Guidance for Change and Project Leaders

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Why IT Principles?

road crumbling indicating that without it principles it's hard to get around road blocks

The best way to explain the benefits of having a well-crafted set of IT principles is to explain what can happen when you don’t have them. I’ve been involved in many initiatives that have failed to get off of the ground because we couldn’t get the support we needed. I’ve been involved in projects that meandered, overran, and ended up not delivering half of what we’d initially wanted (including a whole lot of stuff we hadn’t wanted at all). I’ve been in situations where we had to go with the HiPPO (highest paid person’s opinion), even though we were all pretty sure it was wrong. And I’ve been in teams that have suffered an episode of groupthink, convincing ourselves we were right when in hindsight, it was obviously a bad call. I’m sure you’ve encountered some or all of these instances too. I believe that many of these situations could have been avoided if we had a predefined, and agreed-to, set of principles to keep our decision-making on track. It would have:

  • Given us a criterion by which to assess the options and provide a recommendation.
  • Kept us focused on what was important and to park the superfluous.
  • Allowed us to justify our decisions and avoid unproductive debating.
  • Made it easier to say no because sometimes you have to.
  • Enabled everyone to see how every idea, request, or decision coming from our team was designed to help the business win.

 

Think about how beneficial it would be to have this level of clarity and alignment at your organization. This is what having a great set of IT principles can do for you. This is why it is so important.

How to Develop IT Principles

professional business leader holding data

If this all sounds good, then keep reading and I’ll show you how you can create a set of IT principles that is right for your organization. It’s really not all that hard, but it does require some thought and analysis. In order for these IT principles to work, it also requires you to really understand your business because the principles need to be specifically tailored to whatever it is that will enable your business to succeed.

For example:

  • Does your business succeed by keeping costs as low as possible so it can undercut competitors? If so, your business needs to deliver a ‘good-enough’ service while prioritizing efficiency and cost control
  • Does your business succeed by delivering best-in-class customer service? In which case it needs to understand its customers better than anyone else and be willing to go the extra mile, even if it costs a little more
  • Or does your business succeed by having the best products? In which case, it needs to be at the cutting edge and innovating fast. All of these have significant implications for how IT contributes to that success

 

 

Let’s take, for example, a business that needs to operate highly efficiently to keep costs low while delivering a ‘good-enough’ service. And let’s say that this business is a manufacturer of B2B products such as component parts for machinery. We’ll call this business Parts-R-Us.

Parts-R-Us’ customers could choose from multiple suppliers. Their decision of who to buy from is primarily based on the lowest cost and ability to deliver. They will choose the cheapest reliable supplier that has a defect rate under X%. Parts-R-Us, therefore, need an efficient supply chain that allows them to source materials in bulk at a lower cost, reliably and consistently turn those materials into parts as efficiently as possible, and have those parts sold to customers rather than sitting in a warehouse collecting dust. For Parts-R-Us then, the core business capabilities might be:

  • Highly accurate supply and demand forecasts so that they can order the right materials at the right time and at a low cost
  • A clear view of production efficiency and capacity to produce exactly the right amount of parts at the right time to meet sales commitments
  • Comprehensive, precise and constantly updating job-costing metrics that allow the business to profit at slim margins
  • A highly coordinated sales team that knows what Parts-R-Us can commit to and at what price, to make a profit

 

Based on this, we can say with some confidence that IT’s contribution to Parts-R-Us’ success will be something like:

  • Advanced business intelligence and accurate forecasting tools
  • Agile production management and resourcing systems that can maintain high-resource utilization in the face of uncontrolled variables such as staff sickness and supply-chain shortages
  • Finance systems that are highly integrated with production systems, enabling precise job-costing metrics
  • Sales systems that are highly integrated with production and finance systems, providing real-time pricing and capacity information
  • Maintaining an efficiently run IT organization with transparency of costs

 

If IT can deliver on these, then it will have contributed to the success of the business. Parts-R-Us’ IT team can use this knowledge to steer their technology and IT resourcing decisions, inform their required IT capabilities, define a project-management approach, and even guide day-to-day behaviour. How? By analyzing this contribution and understanding what decisions help you make this contribution. This knowledge becomes the basis of your IT Principles.

What Makes a Good Principle?

brain storming session in bright room

Before we start though, remember that to be effective, IT principles must enable unambiguous decision-making. Therefore:

  1. They must be universal, in that they must apply all the time (we’ll talk about handling exceptions later).
  2. However, they must be specific to your organization. I see a lot of principles that are more in the vein of general best practices, such as ‘we must keep hardware and software up to date’. For sure, there are compelling reasons to do this, but when you’re using this principle to argue the case for a much-needed update of a core always-online business system that is about to drop out of support, this principle could be turned against you when it’s pointed out that the organization is still running legacy software on outdated operating systems. Instead, if your principle called out the need to prioritize the availability of systems that support revenue generation, you could use it to it justify a policy for keeping critical systems under support agreements to mitigate the risk of downtime, the creation of a staging environment to test new releases, and the development of robust automated deployment processes to minimize both the risk and length of maintenance windows.
  3. That means they must be clearly traceable back to ITs contribution, and therefore, back to business strategy. This provides a solid foundation under your principles and helps everybody stayed aligned on why certain decisions are being made. It also helps you identify when principles need to change. It follows that if your business strategy changes, you will need to reassess your principles to see if they’re still the right ones.
  4. Finally, they must be unambiguous and leave no room for interpretation. The point is to enable clear and decisive decision-making, not spark debate and uncertainty.

Sample Principles For Our Example Company

business leader sharing data and reporting

OK, with that in mind, we’re ready to look at some potential IT principles for our example business, Parts-R-Us. In real life, we would have more information to factor in, such as the direction of senior management, the specific competitive climate, and the experience gained from past project failures. However, given that Parts-R-Us is a fictional business, these pieces of information are beyond the scope of this example.

Principle #1: IT must operate in close alignment with the other business units, particularly sales, manufacturing, and finance.

This one speaks to the fact that IT’s contribution to Parts-R-Us is largely in support of these departments. If the IT team does not maintain good relationships with these departments and adequately address their needs, it will not contribute to the success of the business.

Some implications of this principle might be to create governance processes that incorporate approval from the heads of those departments for certain decisions. Perhaps an IT steering committee should be created that includes the VP of IT, VP of Manufacturing, VP of Supply Chain, VP of Finance and VP of Sales, and which is responsible for making IT investment decisions and providing oversight of IT’s activities and performance. If an IT decision needs to be made that favors the marketing team at the expense of the manufacturing team, then it would need to be very carefully considered.

Principle #2: Critical business systems must be accessible, user-friendly, and well-integrated to enable the activities of the core business units.

It’s no good designing an amazing system with all the bells and whistles if the team can’t use it to its potential. You could inadvertently constrain the business because people find the interface clunky or irritating, or they find it hard to collaborate. Sometimes it can be annoying that the sales team is asking to use Dropbox when you’ve already provided them with a perfectly good file-sharing tool, or that the manufacturing team wants all data available through a single application. But it’s these small things that can make a big difference to the effectiveness and efficiency of a team. If that team’s success is critical, it can have a major impact on the business.

An implication of this principle might include taking a human-centered design approach to choosing systems. Start with the process and objectives the team is trying to achieve, their pain points and comfort level with technology, and select a system that works for them. That might mean more systems to manage and more overhead for you, and a higher cost, but it will be worth it to the business.

Principle #3: IT must be able to update and even replace core system components quickly if they start to lag behind.

Large, complex, monolithic systems where even simple changes can take months, and replacing whole modules is almost impossible, would not enable the business to react to changing business needs and take advantage of technological advancements that could give them an edge over the competition.

Some decisions coming from this principle might include Parts-R-Us deploying a modular system comprised of best-in-class software with a robust integration layer. This avoids lock-in to specific products and vendors, helps them reduce the complexity of making changes because they’re only changing one small part instead of the whole system, and allows them to switch out components without disrupting the whole. They may also decide to implement agile project management practices to ensure that their team processes can change as fluidly as their systems.

Principle #4: Data is one of the most important assets we have so we need to fully exploit it for business gain. We cannot succeed without accurate and reliable data and timely and insightful analysis.

Like all highly efficient large businesses, Parts-R-Us is data-driven. You can implement the best systems and processes in the world, but if the data is no good, a business like Parts-R-Us will fail. Poor supply chain visibility leads to bottlenecks and inefficiencies, inaccurate forecasts result in unmet demand and over-supply, incomplete job-costing results in charging a price that is too low, and makes a loss, or too high, and loses business.

Some implications of this principle might include investing in advanced analytical tools and resources, perhaps creating a team dedicated to monitoring and maintaining critical system data, and another dedicated to driving actionable insights from the company’s data to help improve operational efficiency.

What’s the Right Number of Principles?

business women deciding two roads to take

How many principles you decide to have depends on the complexity of your organization and the scope of the IT services you deliver. If your team is regularly involved in system and data architecture, software development, IT operations, business intelligence, and is both client and internal facing, then you may want to have principles for each of these areas. But try to be sparing. In my experience, having too many principles overwhelms people and quickly renders them unusable. It’s far better to have 4 or 5 really solid principles that address key areas than a long laundry list of commandments that gather dust.

 

Also, remember that this isn’t the only way you communicate with your team. If your team needs to be constantly reminded not to write sloppy code, to treat end-users with respect, and that information security is important, then you have more immediate problems that IT principles won’t solve. IT principles form part of your management toolkit, but they are not the only tool you should be using. Use principles surgically to facilitate critical decision-making, don’t try to apply them in all situations. This would result in having too many at a too high level for them to be useful.

How to Deal with Exceptions

tire rolling over a nail - without IT principles business will be caught off guard to exceptions

The point of IT principles is to enable effective and consistent decision-making that is aligned with business strategy. But don’t become a slave to them. Recognize that businesses change constantly and there is a need to deal with exceptions all the time. Decisions should be made based on assessments of risk and opportunity. When there is a desire to make a decision that breaks a principle, this is a trigger for discussion. Perhaps the business strategy has changed and the principle is no longer relevant. Or perhaps this is really an exceptional case, and we can make this decision with our eyes wide open to the risk and be on guard for potentially negative outcomes. However, you should proceed with making exceptions with extreme caution. I would suggest some simple governance guidelines for making exceptions to your principles:

  1. Make sure that exceptions to principles are made at a senior level, ideally a risk or IT steering committee with senior cross-functional representation.
  2. Document the reasons for making the exception. You don’t want this exception to become the norm, so be as detailed and specific as you can so it’s clear why the exception only applies in this case.
  3. Determine the implications of making the exception and create any necessary compensating controls. Perhaps you need to create some additional monitoring processes to detect negative outcomes.

 

 

Interaction with IT Governance

conference meeting with 4 people at a table and one presenter on a monitor

There is sometimes confusion between IT principles and IT governance. IT principles work in tandem with IT governance processes to provide structure to the operations of an IT team. Together, they guide the decisions and actions that enable IT to deliver what the business needs for success. While principles provide the what: what decisions are the right ones for your specific business; governance is concerned with the how: how decisions are made, how they are assessed and how oversight is maintained. There is a lot to say on IT governance, which is an important and often overlooked area of IT management, but it is beyond the scope of this article.

Wrap Up

In summary, we have discussed why IT principles are important and what makes a good principle. We have looked at an example of some IT principles applied to a fictitious company. We have discussed how many principles you should have and how to apply them, including dealing with exceptions and how they fit with IT governance. In short, IT principles are a powerful tool to help keep you and your team on track, to keep you focused on helping the business win, and to gain and maintain alignment with other business units. They are not a one-stop-shop for IT management that can be used in every situation and for every purpose. Rather, they are an important part of your IT management toolkit that helps to ensure that you’re making the right decisions for your business.

Working with Mindfield Consulting

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