Solving Complexity – The Business Way

As I mentioned in the closing paragraph of yesterday’s post people who work in the corporate world are under the impression that IT is a “business enabler”. This is the perception that is oft promoted by the industry (more words on that next week). They therefore, quite rightly, expect that the computers in their organization enable them to be quick and nimble, adapting to all those industry pressures that Tom Peters’ has been preaching about for so many years. (I think he’s fab by the way!)

More often than not they see an IT department that is imposing grave restrictions on the solutions that they need to carry out their business. (Read yesterday’s post to find out why). So when faced with such intransigence – what can they do?

There are three ways this hurdle has been overcome and they are solutions that are born of the 80’s, 90’s and 00’s. They all have the same effect and unfortunately they will always cause problems for the organizations that are forced to adopt them.

In the 80’s - I was employed by a burgeoning satellite TV company in London. My role was Office Systems Manager and I was to manage the roll-out and support of the PC’s in the organization. When asked, my boss said he could see no real reason why there would be more than 30 installed – I thought I could manage that! They had invested heavily in a very sophisticated DEC VAX back office system that was going to manage all their office needs, or at least that’s what the DEC sales guys were telling them. Those hopes fell into the enormous pit that saw the failure of BSB - one of the great technological failures.

The promised integrated systems were never completed - so what happened? Well eventually me (and my team) ended up supporting over 350 PC’s which were installed over the next 18 months. This is an extreme example of how PC’s can become the release valve within a company for the failure of the primary systems. If I, as a manager, can’t get any answers out of IT I’ll get my own database or spreadsheet on one of my PC's, whether I do it myself or get a temp in to develop it for me.

Although this could be viewed as a valid tactical solution to a short term problem the issue is these business systems have a tendency of growing in importance and become impossible to mange in the future. The lack of rigor applied to their initial development means that they can fall outside the scope of any future strategic plans putting those business systems that depend on them at risk..

In the 90’s - the IT industry was increasingly providing consultancy services to their customers. They then took this one step further and created the IT Outsourcing industry.

Now the message was simple, there were huge opportunities for customers to cut bottom line costs. Although this was possible, I worked in a very successful one at the end of the 90’s, I really don’t think this was the primary driver for the senior executives who were signing the deals. If you examine economic theory on outsourcing it is assumed that the service that are ripe for picking are those that are not seen as core business activities.Now this is bad news for all those people in the IT department because they have always assumed they were critical to the companies success. 

I think most senior executives outsource their IT so that they can get rid of a problem that they don’t understand. Give it to some supplier and then if it goes wrong it’s their problem not ours – easy!

If only it was that easy. Unfortunately IT systems have a habit of entrenching themselves into every activity that the business carries out. Most IT outsourcing contracts assume a level of stability and any need to change is deemed outside of the contract and chargeable as a project. If it needs to be changed (and it will) – that’s when the invoices start rolling in. Outsourcing rarely makes money for the outsourcer but their projects are where the real money is made!

I have a hunch that large organizations are going to start re-considering outsourcing and go back to in-sourcing. That’s OK but one thing that it does protect organizations from is the skills shortage – be warned!

In the ‘00’s – what’s next? The ever wonderful world of technology always has the ability to invent a new revenue stream – sorry – solution! You may have seen it in various disguises – SaaS, Web 2.0, Cloud Computing - whatever the name it is effectively application outsourcing. Cloud Computing is supposed to be a wonderful technological revolution so I’ll discuss it in a bit more detail later but let’s keep on subject.

This is a great idea for all those frustrated business managers who are fed up with the IT department’s inability to provide the solutions they want. All that’s needed is a company somewhere in the world that can provide an application and a web address. Paying a monthly fee on a credit card allows access to whatever may be needed and the IT guys will never need to know! At last - freedom from the draconian rules imposed on those internal systems. Well at least that’s how it looks. 

All these solutions share the same problem. They are tactical solutions that try to solve a strategic imperative. That strategic goal is to effectively manage the information within the organisation. What complexity is doing is driving that information either down or out of visibility. Alot of that information should be contributing to the collective success of the company. 

For IT to be effective it must ensure that the information  being traded is readily available. If the organisation is unable to maintain control of its information then I think it should seriously re-consider the idea all together, rather than ignore it, which sadly is the ever increasing trend.