I wanted to r eturn once more to the AT Kearney report that I wrote about earlier in the week. This article, entitled "Why Today's IT Organization Won't Work Tomorrow" is a rich vein to mine.
Beyond the fact that there are serious gaps between what senior managers want and what IT can deliver, there are some other factors that limit the ability of IT to move forward. The article calls out four key areas...I guess I agree with most of them.
First - make the most of IT assets. The article suggests breaking all IT assets into three groups - those that increase operational excellence (for example mature technologies and systems,especially those that support backoffice processes), assets that improve "core value" (tools and applications that impact the value chain of the firm directly), and assets that boost innovation. Then consider these applications across these three divisions as a portfolio and manage each accordingly. Where do you spend the majority of your dollars and human capital now? Where should you spend your human capital and resources in the future? This approach explains the growth of outsourcing, as large firms outsource "backoffice" systems. The real question is - will they spend the money they save on systems that boost innovation?
Second - reduce IT complexity. IT systems are complex, for many reasons. First, most companies built systems over time, piecing them together. This created a need for middleware and integration, adding layers of complexity. As transactional systems grew and the need for reporting increased, companies added layers of systems for reporting and data analysis. Again, this is no one's fault, just the evolution of IT. We need to find ways to make IT more seamless and more intuitive for the user.
Third - innovate with the customer in mind. This one is one I wonder about. I think it's important to consider customers when determining IT investments, but is this the top concern? Obviously firms that treat their customers well succeed, but the world also beats a path to firms with the best mousetrap. Many firms in the technology space have poor systems to support their channel partners or customers - consider Intel and Microsoft as examples. They clearly did not invest first in systems with the customer or channel in mind. Decide what your firm needs to be really good at, and put your IT investments there.
Finally, organize to meet tomorrow's needs. I think the most important point the article makes here is to begin to harmonize business cycles and product cycles with IT investment life cycles. An IT plan that looks out one or two years when the systems must support products and processes for five or more years doesn't make sense. Alternatively, system deployment life cycles that take over a year for projects that last six months or less aren't helpful. To get fully harmonized, IT needs to be in the senior executive suite, in the boardroom as an equal player, looking out five to ten years. Otherwise pasted together, multi-layered systems will be the only result.
If you ask me, the hardest job in the world is CIO. However, with the right focus, the right investment and the right partnering in the executive suite, we can build IT infrastructures that carry our firms into the future.