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Article : Re-thinking Information Technology And The Business Organization Or “Real IT Geeks Don’t Need Instructions”

Looking back over the past 30 years, the role of the corporate Information Technology departments has evolved steadily. Originally, IT’s charter was simply to keep the hardware running and the software current. In the 1980s and 1990s, experts correctly realized that IT, including its infrastructure, was a necessary component for productivity - but not just for the competitive advantage. For example, General Dynamics Pomona Division in the late 1980’s took on Total Quality Management and established the idea of moving people around to different business groups so that General Dynamics Pomona employees could learn more about the abilities of each of the organizations. This idea was exceptional and became a side benefit of TQM initiatives and by building a much better relationship with each of the business units, productivity and quality improved.

An example of this was the project that I managed which involved finding a better way to improve the rotating fin on the Standard Missile Block 4. The engineering team and the manufacturing engineering team cross trained and collaborated between each department, building relationships that proved to be valuable, and improved the design and made it so that the missile could be manufactured, saving design costs and delivering a product that worked. Besides cross-teaming, we used tools such as Six Sigma, Taguchi Methods, CATIA 3D CAD/CAM, Variation Simulation Analysis (VSA) and data modeling.

Other companies that tried to move IT in line with the business units used business process reengineering and the technology of enterprise resource planning (ERP). Many failed because their efforts did not provide a clear explanation of what IT should do for their companies. Some thought that this “reengineering” was the panacea and tried to realign IT and making “reengineering” the facilitator. Michael Hammer and James Champy, for example, devoted a full chapter of “Reengineering the Corporation” to IT as an enabler of reengineering (Harper Business Essentials, 1993). One large success was the Electronic Commerce effort conducted at the Los Angeles Air Force Base (LAAFB) in 1992-1995, which showed that IT was not an enabler but rather the driver. The key to the success was building of relationships between IT and the CFO, as well as other key organizations (like DFAS, other USAF Major Commands, and small businesses) and using tools such as EDI, reengineering, security, asset management, IDEF modeling, activity based costing, and barcode integration Regarding this success, the IT department at LAAFB was the vanguard of functionality linking and continually found new ways to connect information among functions, thereby building the functionalities themselves with individuals, departments, and entire organizations, and at the same time, building relationships, or as the Greeks say, building koinonia with each line of business and top management. (Chavez, Lucks, and Yoder. “Reengineering Electronic Commerce Modeling Air Force EDI Processes,” Enterprise Reengineering March 1995 page 28-31, and Chavez, Lucks, and Yoder “Electronic Data Interchange: Successful Reengineering Using IDEF” CrossTalk, The Journal of Defense Software Engineering June 1995). For others to achieve this strategic vision as in the above examples, it could be seen that IT must be intimate not only with all the company’s business processes but also with leading-edge technologies and how they might enhance the business process.

The IT department becomes the keeper of the master corporate process architecture and then provides the requisite information via appropriate tools. Information is the fuel that drives functional integration and, subsequently, productivity. The key is how well the whole IT team has built the relationships within and outside of the company. As I have found out in my experience, it is not just with the Senior IT management. Another example of this idea could be found in the effort of Procter and Gamble. In a report by Christopher Koch, Procter and Gamble tried to increase global collaboration. To do so they noted that IT needs to be “flexible enough to meet a broad range of business needs…it needs to stand up to thousands of users in a global installation, and finally the solution should promote cross-functional integration and collaboration” (Christopher Koch “Capturing the Elements of Innovation” CIO February 1, 2007 pages 40-44). All are a part of relationship management.

Change to any business has become a challenging constant, for example, by the introduction of portable electronic hardware. The ability of the IT organization to cope with it is continually called into question. To make IT effective, IT needs to re-shift its focus from the means to the end, and the senior IT management staff and their teams must establish solid relationships with business units and top management. There is some chatter out there saying that IT should become a separate business unit or cost center within corporations. The IT organization must obtain the best inputs it needs to align the technology imperatives with the business imperatives rather than becoming a separate business unit or cost center. Therefore, if business and IT are not already aligned, alignment needs to become a top priority for most IT management, be it to comply with HIPAA, Sarbanes-Oxley or other compliant and security mandates, to enable faster time to market, or to increase customer intelligence. In other words, the IT organization as a whole must establish a rock solid relationship with the rest of the business. The security and compliance issues and mandates are duly noted in a report from CIO INSIGHT which rated security and complying with regulations as number 16 on their top IT budget priority list (Ellen Pearlman “Top 30 Trends 2006” CIO INSIGHT Special Issue Number 62 page 43).

Despite all the years of awareness of the problems between IT and the business units and some attempts to correct these problems, there is still a “major disconnect” or perceived “gap” between IT organizations and their business counterparts. It is very critical for senior IT managers to develop deeper relationships (koinonia) within their companies, specifically, with the managers responsible for operating units and key administrative functional areas, which includes R&D, sales and marketing, HR, production and distribution, accounting and finance. These organizations oversee the units that ultimately make or losemoney for their companies. Meeting or exceeding their profit-and- loss goals has been and should remain the primary goal of the senior IT members and their teams.

For senior IT executives and their teams, “understanding the business” must mean more than knowing the architecture of the enterprise or how the processes flow. Rather, “understanding the business” has to mean having deep insights into a complex interplay of processes, people, culture, relationships, and P&L economics among customers, suppliers, and internal stakeholders. Having the top-level view of the company and its business alone is not enough. The IT team must have an understanding of how each line of business works. This means that the IT team must know and understand, at different levels, its incentives and how the team is compensated based on business performance. 

Most managers worry about meeting competitive threats. That is why they, in turn, need to keep a relationship with IT. Managers depend on IT to know how to apply technology to improve business performance. In today’s world, many companies are looking at Service Oriented Architecture (SOA) as a means to improve customer satisfaction, but again, many are just “doing” SOA. These companies may actually only be referring to using some Web services and not referring to an overarching architecture of which SOA stipulates (Margaria, Steffen “Service Engineering: Linking Business and IT” IEEE Computer Society October 2006 page 45-55 and Alan Joch “Sorting SOA fact for fiction” White paper February 12, 2007). Several companies may have complexity in their application portfolios, and much of it may cross over different silos. SOA mandates an enterprise-architecture and desires for interdepartmental collaboration, and that means one needs to have good relationships with each business unit. In this way, one may find that some applications do not fit under SOA, and then the organization can help avoid major risk.

Building relationships between the IT team and other parts of the business is not the panacea to correct the perceived image of IT. For the average IT organization, achieving clear goals and deliverables may be the easy part of the job. There is a clear need to deliver high-quality, cost effective technology results that serve the needs of the business. However, the ability to communicate, having good relationships, and doing great power point slides cannot mask poor results. If the IT team delivers projects that are over budget, others will start looking elsewhere, and relationships will break down. The line-of-business members will begin to find alternate sources for IT solutions, such as application service providers and vendors not discussed with the IT team. Many studies have shown that there is a perception of a gap between IT and its business counterparts. The IT team confronts image problems such as: lacking confidence in its ability to deliver, perceiving IT as only a utility, a “perceived failure” to meet the needs of the business, lacking transparency between business priorities and IT priorities, poorly understood IT governance processes, and giving little credit to IT for generated cost data (such as ITs failing to use tools like the Spiral Model for Software Development Life Cycle - SDLC - and COCOMO from USC).

As Quality Assurance Director for Speed--lead.com, Ella Netes points out that even using new ideas in software development methodologies, in itself, is not an answer to unmasking poor results. In an interview (March 07, 2007) Netes noted, for example, that “Agile software development methodology has won the IT arena because it was something that industry was craving.” She pointed out that one of the big risks associated with Agile software development is “the lack of adequate documentation and the ability to re-create problems in the life cycle, which could lead to both business unit and customer dissatisfaction. This could then lead to cost increases unless relationships and other cultural processes are in place.” This is not the case with the Spiral model, for example, where documentation, collaboration, and relationship management are key components. Agile may just be a faster way of prototyping and a good way to bury costs.

Netes continued that, when considering Agile software development and project management are realities, it is critical when “applying those to make sure that there is balance between adjustability to market conditions and a heavy focus on predictability in IT efforts. Predictability comes from putting structure into chaos, not just monitoring it and watching for trends. Agile methodologies can be viewed as a Spiral development of structured approaches to the management of the Software Development Life Cycle, remembering to utilize the best concepts, approaches and practices from which it is derived.”

Because of cost and scheduling issues, many IT departments become too focused on creating and maintaining a technology infrastructure and neglect to explain or demonstrate how that technology can collect, analyze, synthesize, package and deliver information. To manage this perception, the IT team must pay attention to the hands-on, highly visible, “people” aspects of technology within the company. An example would be “IM” or e-mail, technology everyone uses and on which many businesses depend. Other areas where IT can possibly improve could be fostering and encouraging innovation and creative thinking within the organization, challenging the status quo and embracing change (Ben Worthen ‘Users Who Know Too Much and the CIO’s Who Fear Them’ – CIO February 15, 2007 page 40), and delivering innovative and competitive products and services.

As in any marketing product, the IT applications and platforms have a product life cycle, and like other facets within the company, they involve the symbiosis of organizational learning, enterprise change, economic value, and facilitating capabilities. The impetus for change may come from the top down or the bottom up, depending on the rhythm of the particular time frame. Today’s world seems to be driven not by what the enterprise can provide, but by what customers, communities, and employees want, expect, and demand in exchange for their loyalty. Many of the business managers have reported that IT has to deliver far more value across a greatly expanded landscape that includes unstructured content, collaboration services, smartphones, thumb drives, I-Pod technology, an enhanced customer experience, niche applications that go well beyond reengineering tools, and business-process outsourcing integration. An example of IT’s delivering for more value is the system that was built in Iraq by the IT team led by Dennis Plockmeyer, CIO for the Program Contracting Office. A world class data center and infrastructure, along with a fully integrated application, allowed the program office, the contractors, and the Coalition to track, report project progress on and collaborate with others across nations and within states with in-depth security.

According to Ram Charan (Charan ‘Eight Secrets For Executive Leadership’ Optimize December 2006 page 52), “business-leadership skills are vital to CIOs who seek closer cross-functional collaboration, improved worker productivity, and greater satisfaction with their own jobs.” With this re-invented idea, I think that not only the CIO, but also the whole IT team needs to be adept at understanding business issues and applying its technical experience and understanding to provide the solution and, at times, adding the non-IT team member into the mix, thus building better relationships and improved productivity and quality.

In looking back, it is important to remember all the members that go to make up IT comprise a “TEAM” and each is a “value added” member of the total organization. IT plays such an important role in the organization that the organization could see improved profits, a better company image, and improved customer loyalty. As I have shown, since change within any business has become a challenging constant, and the ability of the IT organization to cope with it is continually called into question. To make IT effective, IT needs to re-shift its focus from the means to the end, and the senior IT management staff and their teams must establish solid relationships with the business units and the top management. As Research VP Diane Morello from Gartner said at its Business Process Management Summit, “tech skills will always be needed, but they'll take a back seat to relationship management.”


Today's Tip of the Day - Utilize Time & Money Saving Tools

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Published: Monday, May 7, 2007

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2024 Buyers Guide Telecoms

 
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Televergence is a facilities based US Nationwide High volume/High Capacity Inbound and Outbound VoIP Carrier for Contact Centers. We specialize in termination (outbound) and origination (toll free and local DID) for the contact center. We have a technical staff that is up to date on the majority of platforms in use today, including asterisk and Vicci dial, as well as many of the currently in use software platforms.
Contact Centers generally see cost reduction and containment when using Televergence as their contact center telecom carrier. Televergence is the only active US VoIP carrier certified by the Women's Business Enterprise National Council (WBENC), which enables our services to qualify for meeting corporations Supplier Diversity Needs.
 

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