In the early 90’s IT was still a relatively young discipline but one which was continually changing. The arrival of the PC, and the growing dominance of Microsoft, was beginning to change the landscape. The future of large centralised computer systems was looking very limited; an interesting trend that has been reversed in recent years, due to the cost of managing distributed systems and the introduction of technologies like the virtual server and advanced storage systems.
Despite all of these changes in technology, the role of IT as an enabler of improved operational performance remains poorly understood. Information technology remains a substantially missed and misunderstood opportunity with the potential to significantly raise performance and enhance competitiveness. As someone with a predominantly technology and business based background this gave me a unique opportunity back in 1990 to consider the fundamentals of how IT should be used to help an organisation not only function, but thrive.
For many the IT agenda over the last 20 years has been dominated by the technology itself and not the benefits it can bring. This has resulted in a growing gap of understanding between IT teams and those with a business focus, resulting in IT operating in near isolation, often looked on as a pure cost centre. The result of my early deliberations on IT was the creation of ‘The 5 Ways’ that Information Technology should enhance organisational performance and competitiveness.
The 5 Ways defined
In general a well thought out, business aligned, IT strategy should be focussed on creating high levels of stakeholder benefit. In order to achieve this, the areas listed below should be implicit in the declared aims and objectives for the company. The business case for any IT related project should address one or more of the following ‘5 Ways’ in a fully quantified and strategically justified way.
1. Raising quality and lowering cost
Quality and productivity are closely aligned, as both benefit, simultaneously, by operating in a ‘right-first-time’ cultural environment. The automation of repetitive manual processes will increase efficiency and eliminate mistakes. The streamlining of business and workflow processes can both improve service levels and increase the utilisation of essential equipment. This includes more than just the obvious manufacturing examples; so optimising patient flow in hospitals and the service and administration functions in educational institutes or local government.
2. Acquiring and retaining customers
Any organisation has customers that will benefit from the support, services or goods supplied. In hospitals it is the patient, educational institutions have students and manufacturing and retail organisations have the people who purchase their goods. Despite the fact that they don’t acknowledge it, the local government’s job is to service the needs of the citizen. In an increasing number of instances customers have choice and can vote with their feet. How can technology be used to attract new customers and then ensure that existing customers continue to be loyal?
3. Providing timely and accurate information
People at all levels of the organisation need information on their individual or team performance. Senior managers need, at a glance, an immediate measure of the divisional or section performance. In addition to this the ‘boardroom’ must know how well the institution is performing relative to its strategic and budgetary objectives, so that timely decisions can be made and the future of the organisation assured. Information technology is all about collecting information and using it productively to make informed decisions.
4. Improving teamwork and communication
The essence of good management is to create a culture of trust and openness; an environment where people feel driven and empowered to collaborate in order to improve the organisation’s performance. To achieve this the requirement for people to communicate and collaborate on projects of mutual benefit must be satisfied. Technology should be used to support teamwork and ease the ability to talk openly and easily at any time even if they are operating in different locations globally.
5. Reducing risk and increasing security
If systems are put in place to address some or all of the above areas, and strategic value is demonstrated, then it is essential that information and system integrity is guaranteed at all times. Software and hardware systems need to keep operating, or business will be lost. Data needs to be protected from loss, damage or attack.
Essential precursors to applying the 5 Ways
IT cannot survive in a vacuum and must be seen as a critical and implicit part of helping realise an organisation’s corporate strategy.
As a result, one of the key requirements for identifying which of the ‘5 Ways’ and associated technical solutions are relevant to your business is the existence of a coherent and well-communicated business strategy. Without a clear idea of what the company is trying to do it is difficult to identify where investments in new initiatives of any kind should be made. For example, does your organisation have a strong competitive focus on customer service? Must you have a low cost base to compete effectively? How important is teamwork and collaboration in your organisations innovation process?
The other crucial element of a successful IT project is that there is clear institutional management leadership. The IT department cannot initiate and complete a project without full management support and a management sponsor or leader.
Equally as important is the business awareness of your organisation’s IT team. The drive for change must come from the operational management, well supported by an IT department who understand the business reasons for implementation. If this isn’t the case then there is a risk that the project will have a technical and not a business focus and the organisation will fail to see any benefits from a potentially large investment. Would you ever make a personal purchasing decision based on the features without any idea of the benefits?