Reshaping IT management for turbulent times
Tuesday, 21 December, 2010 Leave a comment
McKinsey Quarterly introduce A new model for managing IT combines factory-style productivity to keep costs down with a more nimble, innovation-focused approach to adapt to rapid change.
If your business IT system fails what is your business life expectancy!? How resilient is your business…how quickly can the impact be managed or how long can you survive?
But the lessons for business and for society from this process are even greater!
You will notice consistent references to complexity in the following extract from McKinsey and if you aren’t clear what it is or why it is so significant let me know!!!
Complexity is the “unseen” problem-solving capability that underpins the functions that we perform and upon which we are reliant in our day-to-day lives. But, just like in IT systems, there is a sustainable limit of system complexity in proximity to which the system is unstable and unpredictable. Beyond which, unless new “structure” is added, functionality is lost…sometimes rapidly! Here are some complexity facts from Ontonix.
If you measure complexity you have an opportunity to manage it as you would other business risks. If you do not, the business remains unnecessarily exposed to uncertainty.
I wonder how long before this is recognised as a matter of Corporate Governance?
Holistic business cases—cutting complexity through improved planning
For most companies, IT complexity increases gradually, as systems slowly evolve beyond their initial purpose, or through acquisitions, when new, sometimes duplicative systems are built for individual business units. Performance suffers over time, as ineffective IT slows product introductions, hampers customer interactions, and often makes post merger integration more difficult.
IT leaders recognize the adverse effects of complexity, but replacing these systems involves a substantial commitment of resources: hardware, new applications, and staff and vendor time. The economics are difficult to justify given the short time horizons of many tough-minded CFOs, particularly since tangible benefits are often realized only in the longer term.
To manage complexity, companies are starting to employ a more holistic business case model that goes beyond the traditional, IT-centric versions. This model includes realistic, verifiable cost–benefit analysis to assess the impact of new systems on the entire organization. Critically, such plans also require a road map for how future projects might build on the investment. At one company, for instance, the business case to deliver a unified view of all customer data showed how better information management could enable follow-on projects for marketing systems, enhancing cross-selling opportunities.