- Introduction
- The Business Value of IT
- Getting to the Source of Problems
- Aligning IT with the Business Vision
- Ask Not What IT Can Do for You
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Getting to the Source of Problems
From the IT standpoint, it's important to determine the source of business problems. Business problems are created not only by competition or market needs; sometimes, IT itself is the source. Hard to believe? When requirements, design, and outcomes of an IT system are not thoroughly thought out in advance, the "solution" may lead to additional business problems. For example, suppose a customer relationship management (CRM) tool doesn't scale up to the number of customers doing business with an enterprise. This lack of scalability may result in a huge revenue loss or customer dissatisfaction. Process automation is another common example; ineffective or inefficient automation can result in chaos among workers and decreased productivity.
NOTE
"[In many major corporations,] IT is an expensive mess. Orders are lost. Customers call help desks that aren't helpful. Tracking systems do not track. Indeed, the average business fritters away 20% of its corporate IT budget on purchases that fail to achieve their objectives, according to Gartner Research. This adds up to approximately $500 billion wasted worldwide."
Charlie Feld and Donna Stoddard, Harvard Business Review, February 2004
Complexities of IT systems create problems not only for IT but for the whole enterprise. Maintaining complex IT systems can incur a lot of operating and maintenance cost. And big IT systems don't necessarily mean flexible or scalable IT systems. Complexities may grow out of a collection of silo'ed and disjointed applications that don't talk to each other. The movement of data between systems becomes strenuous when systems are disjointed, and when data and information cannot move seamlessly through the enterprise, business tasks cannot be completed. Decision makers cannot make good decisions because information is incomplete or inaccurate. The enterprise cannot gain competency when there is no, little, or inaccurate information with which to make decisions.
When IT cannot facilitate business, it cannot provide business value to the enterprise.
Problems can also arise when the development process or approach is not well-thought-out. Today, a lot of IT development shops rely on agile development processes such as Scrum and feature-driven development (FDD) because the traditional development processes cannot keep up with the speed at which modern businesses operate. A lot of companies rely on IT solution providers because it's not cost- or time-effective for them to build systems internally. The IT solution providers are also strategically aligning themselves to provide out-of-the-box or turnkey solutions as their core competency.
In his May 2003 Harvard Business Review article "IT Doesn't Matter," Nicholas Carr says that "big hardware and software suppliers have become very good at parceling out new features and capabilities in ways that force companies into buying new computers and applications." Out-of-the-box solutions not only solve business problems faced by an enterprise, they also may introduce solutions to nonexistent problems. If the enterprise is lured into utilizing these "bonus" solutions, the results such solutions beget are purely dependent on how creative the business and technical managers are in conducting their business.
Similar to delivering a solution with missing requirements, delivery of unwanted or "bonus" features may not make the best business sense. Sometimes IT managers get carried away with delivering more—but unnecessary—features to customers. Engineers may over-engineer or over-architect solutions. Over-engineering can be cost-prohibitive; excess capacity, cutting-edge technology, and unnecessary upgrades can drain money out of the enterprise. Therefore, it's important for IT managers to make sure that the solutions they present are those most suitable to the actual business problems faced by the enterprise.