Many organisations are rushing online without sound plans and IT strategies in place.
On the one hand we are seeing a gold rush of start-up ventures with hopeful investors trying to secure a sharp capital return, whereas on the other hand we are seeing traditional organisations under siege from the prospect of having traditional markets siphoned away, or crucial supply relationships fundamentally changing. The common response has been to "just do something" – often ill founded, poorly planned or poorly executed – but essential to provide a demonstration to the firm’s stakeholders that it too has "the e-thing" well in hand.
The IT vendor community has been extraordinarily successful in building market penetration for their e-offerings through direct appeal to the business functions feeling these pressures. It is not uncommon for functional departments of mid to large size companies to buy and install their own e-presence (or even a dot.com entity) completely independently of the IT organisation in that firm.
It is true that the e-world is driving business initiatives at functionality/ cost ratios unthinkable even in the recent past. For example, the provision of extended functionality to customers directly via the Web, at minimal cost, compares with the situation say 10 years ago where this would have required a closed user group solution on traditional systems at a 10 -15 times multiple of the deployed cost today.
Increasingly, these technology solutions are key to survival – inseparable from the customer proposition – exponentially increasing the pressure on the capability of the firm to maintain them as a robust utility. Apart from the business content, which these solutions must present, the entire end-to-end service, including the information resource and supporting infrastructure, needs to be managed professionally. There was one high profile service organisation in Australia in which the "dot.com" did indeed live under the proverbial marketing manager’s desk. It was bought by the marketing department on a turnkey basis from an eager IT supplier and its partners. What’s wrong with that?
Nothing – provided the buyer knows how to protect and integrate the investment with the firm at large. In this case the integration did not happen. No backup facilities, no capacity management, no transactional integration with the core systems in the firm, and no ability to measure the demand and performance characteristics of this new face to market – and a global market at that.
Why was it isolated in this dangerously amateurish fashion? Because the IT organisation in that particular firm had lost the trust of its constituency long ago. It was always the bottleneck to business progress, and was never seen to be proactive in its role as an advisor to the business. In this environment, internal dysfunctionality had suddenly made a public appearance.
Organisations have traditionally been able to compensate for shortcomings in IT performance without terminally impacting business performance.
External customers and suppliers have been shielded from poor performing IT by frontline staff, who are responsible for the interaction. The emergence of the Internet and the global use of Web technologies have changed the competitive landscape in the new e-world. This world is highly visible to the customer and other stakeholder parties, and huge performance expectations are placed on the company’s e-presence.
Furthermore, the e-world is built on infrastructure that is superficially appealing in its management simplicity. And so it is to a certain point, but that cannot be taken for granted. The management of the content and transaction services housed in this environment has both a technical and commercial dimension, and both must be protected. In particular, in-house skills for the effective support of this environment are often either lacking or of a rudimentary nature – often to the point of being dangerous to the firm. To circumvent this internal shortcoming, the skills required to man-age the e-presence are frequently drawn directly from the external market. A huge number of service providers have leapt into this space, often short of experience themselves, but also often bringing to market a highly innovative ideas pool. However, if a firm becomes fully dependent on the external market without being "an intelligent buyer" itself, it will be left with no internal comprehension of the asset it has developed, and where to take it in future.
A requirement for success in the e-world is an aligned, effective and efficient IT capability. The IT capability of many mainstream organisations (and even some of the whiz-kid start-ups) is sadly lacking in professional disciplines, and certainly not fit for sustained performance under the demands of rapid time to market for robust solutions – so necessary in today’s dynamic market space. Furthermore, there is significant nervousness that underperforming IT might in turn undermine brand value, especially if it is seen to be unresponsive to new customer propositions.
- To provide a robust foundation to the management of the e-world, the IT capability of the organisation must excel, particularly in the areas of:
- IT leadership, strategy and policy – seamlessly aligned and integral to business direction and objectives.
- Development and integration of new services – with new performance standards for rapid development, as well as right first time functionality, usability and innovation, using business engagement to underpin success.
- Sourcing of solutions in the most appropriate manner – combining internal strengths and market strengths to best advantage for all aspects of the service lifecycle – the intelligent buyer.
- Ongoing IT service delivery – with new performance standards for avail-ability, flexibility, resilience, security, and responsiveness to business demands.
There is a stringent need to engage stakeholders at the most senior levels within the organisation if these changes to the way of working are to be driven through successfully. And it is not all "an IT problem". A holistic view needs to be taken – integrating strategy and policy, leadership, business development, customer services, resource and people management – to develop and implement a blueprint for IT in the e-world.
There is also the need to rapidly diagnose real priorities from a business perspective, assess the ability of IT to deliver those priorities and identify the shortfalls in capability that need to be addressed either internally or externally.
This process should drive the creation of an integrated fitness improvement programme to bring tangible benefits within time scales that fit both urgent and longer-term business needs.
So what does such a fitness program need to include?
- Focus on basic principles – what is important.
- Assessment of the current situation along the dimensions of applications and content, infrastructure, sourcing, and management disciplines.
- Identification of the aspects of these dimensions which need to be improved.
- Agreement as to the extent of IT influence and business influence required to change the situation – it will need both.
- Development of improvement actions which will be tangible, visible and viable.
- Using proper change management disciplines: Make it essential – every-one agrees it must be fixed; Make it ready – we have planned it through, and predict the result; Make it hap-pen – we are doing it and managing it; Make it stick – it is now the accepted way of "doing things round here".
Once the various shortcomings in the current IT – business relationship and processes are addressed, the firm will have effectively laid the foundations for IT excellence, and IT then can successfully manage in an environment of explosive demand. It will enable continued rapid and responsive transformation in IT and business performance, and it will guarantee that the focus of IT is on the desired business initiatives. It will also discipline the business to make better use of the assets it possesses, and to invest more wisely in future.
This process may sound like fundamental re-invention and, in many respects, it is. The current situation is often the result of many long-term decisions, and events deep in the past. For example when a financial services company embarked on a corporate cost reduction program a few years ago, the management focal point was "those wasters in IT". In truth, despite much pleading to the contrary, the IT group had been starved of funding to enable even basic services to be maintained.
No productivity tools had been provided, and the group was in absolutely no position to provide future direction for emerging electronic channels to market, nor to provide the benefits of product innovation or single customer view.
Correction required executive drive, investment in infrastructure, staff, education, business processes and much deeper relationships with external sup-pliers and their services. The improvements which resulted, were self funding after 9 months, and set the organisation on a path to become an early e-adopter.
In conclusion, irrespective of the size or the history of the organisation, the IT fundamentals must be secure in order for the organisation to survive, adapt and evolve in the e-world. The pieces have to be put together, or put back together in many cases, to provide this security. There is no future in running rough along the information super-highway – no matter how sartorial the driver is.
