How big is yours?
The range of practical possibilities that technology opens up for organisations
is greater than ever. IT spends show no sign of diminishing and account
for 2.8% of GDP in the USA. Claims about spectacular successes and, less
often, disasters fill many column inches in the business press. However,
bad experiences are common and businesses have learned to treat new opportunities
with caution. How can managers ensure that potential to earn better returns
is seized whilst steering clear of the worthless and hype?
A necessary, but not sufficient, condition is an intimacy with the needs
of current and potential customers, products, employees and overall business
However, research published in October shows that UK directors are trailing
behind in understanding what technology might do for their businesses.
Over 50% have never attended an IT briefing. The quality of IT advice
obtained is therefore more important than ever. However, few Jersey businesses
are of sufficient size to include an individual with the required experience
on the board. Some organisations have opted for a low risk, low return
approach. Others have pushed ahead with ambitious big-ticket projects
with mixed results. Yet, unsung success stories in the private and public
sectors in Jersey offer valuable signposts to what is being achieved in
favourable circumstances. Many of these demonstrate smart use of existing
technologies. Most of them powerfully confirm that IT is not about efficiency
but rather impacts on the fundamentals by which an organisation survives
and prospers. They also illustrate that, as many managers know, obstacles
often have less to do with technical considerations than a casual observer
Lost in Cyberspace?
E-business receives extensive media coverage and this article will not
repeat stock messages. However, it is worth noting how the take up of
Internet related opportunities illustrates a general characteristic of
IT to transform the business landscape. Organisations that pigeonholed
the World Wide Web as a marketing novelty or simple extension of their
existing business model missed the point. Some success stories are being
built on recognition that IT creates new customer/citizen needs, expectations
and behaviour, new services, different sources of competitive advantage.
Others flourish out of modest expeditionary starting points. The full
impact of the emerging changes has yet to be felt. Jersey organisations
especially must urgently ask whether they are devoting enough attention
to understanding windows of opportunity (and challenges) that are opening
so quickly. Cost and technology are famously not the primary hurdles in
Make and Buy
Another celebrated success story of the 1990s is in application software
suites. As big businesses became more sophisticated in their use of IT,
a sea change away from custom development took place. A new generation
of packages now dominates the top end of the market combining good base
functionality with a level of flexibility and extensibility that, in the
best, rivals a software development environment. These twin aspects offer
the best of both worlds - rapidly introducing proven base applications
and best practice business processes without sacrificing potential to
add enhancements that provide an edge. Smaller organisations, including
some local businesses, are reaping the benefits of this and more choices
are appearing for Jersey businesses. But, judgements about priorities
must not be ceded to technical / support personnel or business users that
would not be trusted to understand the fundamental drivers of the business
if the big hits are to be had.
The maxim "you only manage what you measure" contains enough
truth to provoke some fruitful debate and the mushrooming "balanced
scorecard" industry has put a spotlight on inadequate management
information. Do you therefore need a data warehouse? Maybe. It is now
normal for applications to come with tools to access and report on the
wealth of data locked up inside the organisation (financial, but also
customer and service quality). Add on reporting tools costing as little
as ?100 and are so sophisticated that non specialist personnel can master
their use to create information that might have been elusive in the past.
Even the not so humble spreadsheet is now capable of directly drilling
down into much of the data in core applications (if you know how). However,
obstacles to exploiting this potential management resource spring from
some unexpected places, which might include:
- unawareness of the possibilities,
- lack of management focus on what really key factors need to be tracked;
- hard pressed IT personnel who have neither the time nor incentive to increase
demand for their services.
No Ships but Hardships
Some impressive successes grow out of resisting the temptation to throw
resources at a problem. An interesting case in point is emerging in the
financial services sector right now. Regulations are coming on stream
with significant ramifications for businesses. Prophets of doom have predicted
a burgeoning overhead of paperwork requiring more staff to process. Others
have seen beyond the silos of current assumptions to spot common ground
related to enhancing customer relationships, more sophisticated risk management
and growth. These organisations are seizing the opportunity to rethink
and integrate processes required by these business drivers so that regulatory
monitoring becomes a by-product. Imaginative management is enabled by
established technology to achieve this cluster of benefits. For its part,
the technologies reduce duplication, automate some chores, provides information
that would otherwise be unattainable (being stored on paper), promotes
consistency and control whilst improving staff retention by reducing drudgery.
The Decisive Factor
This article has hinted at some of the live issues and opportunities
in organisations in Jersey today. There are others. Few can ignore the
impact of technology and some will reap great rewards. However, studies
have repeatedly shown that IT spend has no correlation with business performance
per se. The bottom line is that future winners will continue to be separated
from also rans by the calibre of management rather than size of IT budget.
Sources & Recommended Reading
Strassmann, P A, The Squandered Computer, 1997, Information Economics
Press. Provides an extensive analysis of the gap between claimed benefits
of IT and actual performance. Includes references to earlier work including
the widely debated analysis of Steve Roach at Morgan Stanley.
Ernst & Young et al, The Landmark MIT Study: Management in the 1990s,
1989 . Although some years old contains messages that are still relevant.
Schein, E, Organisational Psychology, Prentice Hall, Englewood Cliffs.
Offers a clear introduction to the complexities of behaviour which have
a critical influence on how and why technology is deployed.
Friedman, A L, Computer Systems Development, Wiley. This text is not
about the technical development of systems but rather how technology is
managed and assimilated. Important messages.
Kaplan, R S and Norton, D P, The Balanced Scorecard - Measures that Drive
Performance, Harvard Business Review, Jan-Feb 1992. A short and readable
article that gave rise to a whole industry. Important messages that can
be applied in practice.