One of the most active debates at the moment is centered around what practical steps the CIO should take to provide the business with the essential access to the world of mass-communication which surrounds it today, while assuring cost, security and compliance of the company’s information systems. And all in the context of the downturn where budgets are being slashed.
It turns out that there is a possible real ‘win-win-win’, which my colleague, John Schlesinger, describes quite unambiguously. Sometimes the best solution is the most straightforward. I hope you find this interesting…
The win-win-win of letting go of communication? – guest post by John Schlesinger
While embracing the Enabling Layer will prove one attractive direction for many CIOs in the downturn, I think something perhaps more fundamental may well happen.
To set this up, let’s consider why IBM in the 1970s was one of the world’s largest restaurant chains. In my 16 years at IBM I ate in company canteens all over the world. The Rome lab restaurant beat the Milan one into a cocked hat. Of course, IBM worked out that running over several hundred restaurants wasn’t its best way to return value to shareholders and it gave up. It didn’t outsource the job, it simply stopped doing it. It ‘externalized’ the whole job.
A little later, IBM in the UK worked out that it was running the country’s largest car fleet (yes, bigger than Hertz). And when it did it stopped doing that too. More recently BP decided that providing a network for all its employees wasn’t the best use of its money. Nor did it provide any better security, in fact it made security worse.
And I think it is the rise of IT commoditization allied with the downturn which will lead to a wholesale externalization of communication IT.
For historical reasons, companies provide two kinds of IT: IT that keeps records for the business; and IT that helps employees communicate. I think we will see these two part company (and in my opinion, at long last).
Businesses may soon start to realize that they can realistically externalize communication technology. Another way of saying this is that the CIO, when asked to save money, may turn off the company’s own mail servers and use commoditised IT communication. This could be a real way to cut cost, improve service, and solve the storage issue.
I met with the SQL Server team at Redmond in 1999 and they told me that Microsoft kept track of how much data was owned by each of the servers they sold. SQL Server was a rounding error compared to Exchange. Interestingly, if you look at the data in Exchange, the bulk of it is duplicated attachments. If companies provide their employees with access to an externalized unstructured storage capability (‘content management in the cloud’) such as that offered by Google docs then email will contain URLs rather than documents and storage becomes much more efficient.
With communication IT externalized the CIO can concentrate more fully on some really important business challenges – like great record keeping. This boils down to two things: events; and content. This is more subtle than might appear at first glance. For instance, every time a document is stored in the company content manager (e.g. in the cloud) then an event could be generated (containing the URL and, at least, Dublin Core metadata.
This allows the record keeping to keep track of important documents (such as contracts). Any email that an employee considers relevant to the business is copied to the business ( and is stored in the document repository and an event goes into the record keeping. The model for record keeping is REA which is how the accounting profession extended book keeping to the enterprise using Resources, Events and Agents (events are crucial).
This automates the record keeping of the value chain. With that under control, the CIO can attack content, that is, first class management information generated from the record keeping, what Rayport and Sviokla call the ‘virtual value chain’. This is the best description of data warehousing in business terms I know.
So, one effect of the downturn could be that it will force a radical departure, and CIO’s might let go of human to human communication, and concentrate on enterprise record keeping and content generation. Increased access to communication, better security and compliance of corporate records and content, and lower IT cost. A win-win-win?