Business technology: a mess – or a thing of beauty?

Business technology: a mess – or a thing of beauty?
By Stephen Pritchard

Published: March 24 2010 13:00 | Last updated: March 24 2010 13:00

Business technology all too often divides its users: does it bring value to the business and therefore needs tending; or is it out of control and in need of being tamed?

Those who use IT in their daily jobs – today, almost all white collar workers – complain that it is slow and restrictive. Complex workplace systems certainly lack the simplicity, and often the power, of consumer applications such as Amazon, eBay, Google or iTunes.

Business management, for its part, frequently sees IT as a necessary evil. Even managers who favour investment in IT might have little hard understanding of how IT works in their business.

“Our surveys say that CEOs see technology as valuable,” says Mark Raskino, vice president and Fellow at Gartner, the industry research firm. “But when you ask them what IT is doing, you get vague and mushy answers.”

He argues that business leaders spend too much time looking backwards at the last generation of technology, such as customer relationship management or business process management, rather than emerging trends such as social computing, mobility and sustainability.

At the same time, management teams are often fearful of IT and see change or investment as a risk. As a result, he points out, companies’ core business systems may be several decades old.

IT systems have grown through additions, patches, mid-life upgrades and modifications, and the result is often a sprawl of interconnected applications, with duplication and inefficiency – and possibly systems that no one uses.

“The current IT wave started 50 years ago with Cobol, but we have yet to have a proper refresh [of many systems],” says Mr Raskino. “Companies change their HQ or factories or even their locations but a lot of core IT has yet to go through its main refresh. It has been in the same data centre for 30 years.”

Over the next few years, some companies will have to tear down their old systems and move to an entirely new IT set up. Others, especially newer or fast-growing companies, will move their systems online, through cloud computing.

Mr Raskino likens the process of managing IT to gardening. Too often, the metaphor for IT is engineering or architecture, and this suggests a degree of design and permanence that is unrealistic.

“IT won’t remain orderly,” he says. Architecture gives you one insight but if you leave IT it gets out of shape very fast. It is more an organic thing that needs constant renewal and refresh,” he suggests.

How businesses go about this – without undue risk or cost but also in a way that delivers the capabilities the business will need tomorrow – is a matter for debate.

PA Consulting, for example, has helped its clients set up “guerrilla” IT teams to glook at business units. These teams aim to solve a business problem quickly. If a task cannot be completed in three months, the teams will not take it on.

Such teams will not fix all of a business’s IT problems, concedes Karl Boone, an IT change management specialist and a member of the firm’s management team. “It is not a long-term fix,” he says. “It will add complexity, but [some] complexity is inevitable.”

The key point is for IT to be able to show that it understands the business, hence “embedding” IT staff in the business unit, and that it can deliver incremental improvements at a time when there is little appetite for large, monolithic IT upgrades.

Large projects, though, have not gone away and for some businesses they will be the only way either to clear out older IT systems, or move to new ways of working that bring genuine competitive advantage. As the financial climate improves, the challenge will be to manage the transition process.

“Almost every business has enormous exposure in operations, production and service delivery to the health of their core IT systems,” says Gary Curtis, co-head of Accenture Technology Consulting.

“Today IT is far more than simply the back office: it is embedded either in the product, or the delivery of the product. But the focus on the health of core IT systems has pushed management focus away from optimising business processes. And that will only continue as IT becomes even more critical to the delivery of products.”

Yet businesses, Mr Curtis suggests, spend far less time planning and managing IT projects than they do on capital investments in plant, machinery or property of a similar value. This lack of management involvement and due diligence leads both to IT project delays and failures, and to complexity and IT “mess”.

“If you take a manufacturing business that is capital intensive, such as auto makers or aero engines, it costs $300m-$400m to build a new plant. That business case is done rigorously and is pressure tested and examined by everyone. But the same companies are not good at doing that with IT. You don’t have the same level of scrutiny, whether it is a desktop refit, or a new financial or ERP system.”

Copyright The Financial Times Limited 2010. Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.