How core is IT to your business?

There was a time when the world was divided into technology providers and technology consumers (end user organisations). Today the latter are increasingly selling IT to their clients. Online banking and e-government come to mind.

Without doubt IT is core to the technology providers, but the question arises ‘how core is IT to end user organisations?’.

There is a niggling feeling amongst the user community that the technologists are propagating the myth that the world is becoming IT-centric, and that those that do not buy into that fact will eventually have ample time to consider their misjudgement. It wouldn’t be the first time that that users have fallen prey to an elaborate tech-centric hoax. Y2K and the dotcom gold rush come to mind. Though the counter argument is that planes did not fall out of the sky one second after New Year’s Eve 1999, owing to the IT industry having it covered. And dotcommania was the result of beautiful people seducing vulture capitalists into believing that profitability as a concept was overrated.

As an ex-techie who has endeavoured to view the world from both sides of the business-IT department sandbags, I have an economic and existential need to propagate the view that IT is increasingly core to business. It would indeed be contrarian and self-destructive to promote the idea that IT is becoming less important.

Having said that, the Harvard Business Review provided the rallying call for IT-sceptics with its piece entitled ‘IT doesn’t matter’ (May 2003). Much like punk rock supposedly exposed the great rock and roll swindle, HBR voiced the thoughts of many business people. Its resonance was amplified by the fact that it was written in the heart of the technology nuclear winter, where most businesses where still licking their wounds for getting caught up in the ‘great dotcom swindle’.

The market has moved on and business leaders have had to put their disdainful thoughts to the back of their minds because many of today’s crucial business agenda items are entwined with IT.

But are we really careering towards an IT-centric future? Let’s take a quick look at the history of IT. In 1943 the forecasted global requirement for computers totalled five. In 1984 there was circa one computer per office. By 1995 each user had a PC. Today most users have two (typically a desktop and PDA). It doesn’t take a Mensa trained logician to spot the trend. At this point it is appropriate to quote the oft used caveat much loved by financial service companies, ‘past results are no indicator of future performance. Your shares can fall in value as well as plummet etc etc.’. Caveats aside, subject to nuclear Armageddon, IT looks set to become more entwined with business and our lives.

Outsourcing has forced business leaders to review their mission statements and core competencies. A certain ‘world’s local bank’ considers brand management and information management as the core competencies of their business. Smart leaders are focusing less on product competencies, because given the increased granularity of business cycles, in two years time their product line may bear no resemblance to what is on offer today.

Good brand management will bolster profitability only if the organisation is sufficiently market-sensitive to adjust to the rapidly changing needs of increasingly empowered customers. Cue the IT department. 

Market alertness is only one line of argument for the importance of IT in business success. Similar arguments can be made for cost management, security and governance.

IT has a role to play in practically all business processes. So it is not a leap of reasoning to suggest that the relationship between IT and business is similar to that between one’s nervous system and good health. Over time, business leaders who chose to ignore this reality will be viewed as delusional; a neurological problem that will require nothing less than major boardroom surgery.

 

Ade McCormack

ade@auridian.com

www.auridian.com

Ade McCormack (ade@auridian.com) is founder of Auridian (www.auridian.com), a people-development business focused on helping organizations get best value from their IT investment. He is also author of ‘IT Demystified  - The IT handbook for business professionals’ available via www.auridian.com/book and all good business bookstores.