I have just had a colleague call me to say that he spent an hour and half with some IT folks to get a point across, and in the next meeting with the business team, it only took five minutes. This is not unusual at the moment, but it’s the very point that I always have in mind when writing my posts: the ‘gap’. The topic of how well IT is aligned to business has been going on ever since the term and the technology of IT, PC-based systems, was coined in the early 90s; before that, nobody bothered – you just had to do it the way the computer needed it to be done. But now the gap is widening fast, and it’s not even about alignment, it’s about two completely different focuses. And yes, I know this is going to provoke some pretty intense responses, so let me it clear at the beginning that I am not saying that IT folks are in the wrong; the issue is the business has, or is, shifting the goal posts on the playing field.
Let me start with the advent of the PC and network technology that introduced the term IT in the early 90s (replacing the previous term of ‘computing’ or ‘management information systems’) and the revolution in business practice that it introduced. Before IT, business operations were separated into departments, each with their own mini-computer recording the transactions that their work produced as a sort of automation of the ‘filing cabinet’. This necessary separation of work and expertise meant that the flow of process across an enterprise was broken up and sub-optimal. The IT revolution and networked PCs meant that Business Process Re-engineering could take place so that core processes could be optimised across the enterprise in an end-to-end manner. However, this required flexibility in the way people worked beyond the departmental-oriented model, so matrix working accompanied this change.
The key to matrix working was that a person performed their defined role with whatever processes were required for participation in this role. The key point was that the processes and roles were predetermined because the whole enterprise worked in a pretty stable manner with changes happening at a slow rate. The business school mantra was ‘do more of less’ by focusing on the handful of products that made your enterprise most of its money and enabled it to dominate a specific market area through specialization. The way to make more profit and gain competitive advantage was to become so efficient in your chosen product by optimizing and automating the processes that supported it, thus increasing your margins and so beating everyone else. IT was required to do this and so IT has produced genuine competitive advantage.
Successful IT is based on the cost reduction of the processes required to administer the product lines in a business that uses centralization, stability and core focus as the major drivers to market success. Against this background, investing largish sums of money in monolithic applications that take some time to deliver makes sense, as the stability of the overall model means that paybacks are assured. Add to this the chaos that the business introduced with the introduction of PCs and consequentially mass copies of data, all different, all over the place before the IT department was created to make sure that one version of the truth existed, and you then have some clear objectives for the IT department today – get cost down, centralise data, keep core processes clean, etc.
Today, business is facing a very different world, one where stability is going, or even gone, global competition has increased the range of products available, and consumers, or business buyers, know how to use the web to find exactly the product they want without the restrictions of locality. Beyond this, is a whole shift in technology, and its use by people, to the extent that many people have more, and better, technology capabilities at home than at work, and are frustrated with the IT department. A combination of factors that has not gone unnoticed by the Business Schools, and has led to them introducing new ‘best practices’, by combining new technology capabilities with the changing market conditions, just as before.
The focus is now on flexibility, using the new wave of web based technology to move rapidly to optimise responses to market events and opportunities, laying increasing emphasis on the ability to assemble expertise to evaluate and decide on a course of action quickly. This coupled with using electronic trading practices to cut the cost and time in managing supplier relationships, leads to the maxim ‘do less of more’ in a complete reversal of the previous proposition. The BMW Mini has literally almost endless degrees of customisation, yet is highly profitable, allegedly more so the conventional BMW 3 Series with its controlled series of options. This is in part because the customers will pay more to get exactly what they want, and in part because the suppliers are working together in a new way across ‘business networks’ to be able to support such flexibility.
Business Network Transformation, BNT, the extension of optimal processes beyond the constraints of the firewall to embrace your trading partners is the replacement for Business Process Re-engineering which optimised internal process and stopped at the edge of the enterprise, and in the same way collaborative working replaces matrix working as the method for organising people to support this change. I covered the topic of Business Network Transformation in my last blog under the title Web 2.0 + Clouds = Business Network Transformation so will just remind that it covers the ability to find, make, use and, if necessary, end relationships rapidly to position to fulfil various market opportunities in partnership with other enterprises as suppliers, alliances, etc.
So now I want to outline Collaboration as an organisational tool for the support of BNT. I approached it through the history of the IT era because I have found that this makes the topic, and the challenges that the IT department is receiving, understandable. It also makes clear why the term ’business technology’ (BT) is frequently used to describe the new technologies and their use in business to differentiate from the tools and techniques of Information Technology. The whole differentiation between the two, BT and IT, is around decentralisation and unstructured environments, (yes you still need the centralised and structured role of IT to provide the back office functionality – BT is an additional layer focussing on the front office). In consequence the structure of roles and processes that matrix working is built around don’t work in this area, and the most noticeable symptom of this is the amount of email going round as people inefficiently look for answers to questions that are simply not addressed by the structured organisation.
Collaboration in the sense of BT does not mean Microsoft Sharepoint server as it does in IT (Sharepoint is a great tool for a group of people to collaborate on a predetermined and agreed task) instead it means allowing the people with particular expertise to find each other in the context of a real time event to figure out an answer without involving, or wasting the time, of anyone else. The people in collaboration could be internal, external, or a combination, and the expertise interchanged is seldom commercial in nature as it would be defined by a back office IT system focussed on the internal business transactions. This decentralised model without the controls that IT was specifically designed to introduce is of course frightening to IT professionals, but to the business managers it’s a reality for their current challenges and business requirements. Most importantly it is the means by which they are using technology to gain competitive advantage but this time it is measured by the value of sales, market share, or similar, and not by cost reduction.
So back to my opening point; a discussion on Business Technology, BT, around applying technologies to new business requirements is eagerly grasped by a hard press business manager, but is difficult to assimilate by an IT manager into the requirements of their role. (Think of Capgemini’s TechnoVision as the vehicle for helping the entire organisation of business and IT managers to achieve this together). My next post will be an article that I wrote to expand on the topic of collaboration, slightly unusual for a blog, but for those who have read it apparently quite enlightening.
The title of accidental technologists? Well, that’s thanks to another colleague who commented that business managers were becoming ‘accidental technologists’ in the absence of finding support from the usual internal sources in order to solve their very real, but very different type of requirements.