The rules of enterprise IT

As I’ve pointed out before (possibly as I’m quite fond of games{{1}}) the game of enterprise IT has a long an proud history. I’ve also pointed out that the rules of this game need to change if enterprise IT — as we know it — is to remain relevant in the future{{2}}. This is triggered a few interesting conversations at the pub on just what are the old rules of IT.

[[1]]Capitalise: A game for the whole company to play![[1]]
[[2]]People don’t like change. (Or do they?)[[2]]

Enterprise IT, as we know it today, is an asset management business, the bastard son of Henry Ford’s moving production line. Enterprise IT takes the raw material of business processes and technology and turns them into automated solutions. From those first card tabulators through to today’s enterprise applications, the focus has been on delivering large IT solutions into the business.

The rules of enterprise IT are the therefore rules of business operations. After a fair amount of coffee and beer with friends, the following 4 ± 2 rules seems to be a fair minimum set (in no particular order).

Keep the lights on. Or, put more gently, the ticket to the strategy table is a smooth running business. Business has become totally reliant on IT, while at the same time IT is still seen as something of a black art run by a collection of unapproachable high priests. The board might complain about the cost and pain of an ERP upgrade, but they know they have to find the money if they want to successfully close the books at the end of the financial year. While this means that the money will usually be found, it also means that the number one rule of being a CIO is to keep the transactions flowing. Orders must be taken, products shipped (or services provided), invoices sent and cash collected. IT is an operational essential, and any CIO who can’t be trusted to keep the lights on won’t even have time to warm up their seat.

Save money. IT started as a cost saving exercise: automatic tabulation machines to replace rooms full of people shuffling papers, networks to eliminate the need to truck paper from one place to another. From those first few systems through to today’s modern enterprise solutions, applications have been seen as a tool to save time and money. Understand what the business processes or problem is, and then support the heavy information lifting with technology to drive cost savings and reduce cycle time. Business cases are driven by ideas like ROI, capturing these savings over time. Keep pushing the bottom line down. These incremental savings can add up to significant changes, such as Dell’s make-to-order solution{{3}} which enabled the company to operate with negative working capital (ie. they took your cash before they needed to pay their suppliers), but the overall approach is still based on using IT to drive cost savings through the automation of predefined business processes.

[[3]]Dell’s make to order solution leaves competitors in the dust.[[3]]

Build what you need. When applications are rare, then building them is an engineering challenge. You can’t just go to the store and by the parts you need, you need to create a lot of the parts yourself in your own machine shop. I remember the large teams (compared to today) from the start of my career. A CORBA project didn’t just need a team to implement the business logic, it needed a large infrastructure team (security guy, transaction guy …) as well. Many organisations (and their strong desire to build – or at least heavily customise – solutions) still work under this assumption. IT was the department to marshal large engineering teams who deliver the industrial grade solutions which can form the backbone of a business.

Ferrero Rocher

Crunch on the outside, soft and chewy in the middle.

Keep the outside outside. It’s common to have what is called a Ferrero Rocher{{4}} approach to IT: crunchy on the outside while soft and chewy in the middle. This applies to both security and data management. We visualise a strong distinction between inside and outside the enterprise. Inside we have our data, processes and people. Outside is everyone else (including our customers and partners). We harvest data from our operations and inject it into business intelligence solutions to create insight (and drive operational savings). We trust whatever’s inside our four walls, while deploying significant security measures to keep the evil outside.

[[4]]Ferrero[[4]]

It’s a separate question of whether or not these rules are still relevant in an age when business cycles are measured in weeks rather than years, and SaaS and cloud computing are emerging as the dominate modes of software delivery.

Posted under: Strategy

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