By Joe Paradza
IF the question were to be posed, is information technology (IT) fulfilling its promise in your organisation? it is most likely that the
majority of executives and managers will answer in the negative.
The stories are all too familiar; hardware and software systems that are hopelessly outdated; accounting packages, payroll systems and production systems that do not “talk” to each other, each coming from a different supplier and using different underlying technology; business systems that can efficiently generate incredible quantities of useless reports; enterprise resource planning (ERP) systems that promised the world but ended up merely automating mind-numbingly inefficient processes and using only a fraction of system functionality. All in all, IT investment has taken the aspect of a bottomless pit that has left organisations with little besides a sour taste in the mouth.
The corollary question is of course, can we do without IT? The answer is quite clearly, “No!” The world has moved on and it is entirely impossible for any self-respecting, twenty-first century company to conduct all its business manually or by way of spreadsheets. We therefore have no choice but to find ways of making IT deliver.
In reality, IT has become critical to the operations and competitiveness of organisations around the world. Indeed IT is now playing a bigger and more visible role in driving business success and shareholder value. Senior executives (and not just IT executives!) are under increasing pressure to clearly demonstrate the business value of IT and to show that IT investments can generate a positive return while supporting business objectives.
For most businesses, the following are real issues with respect to IT investment:
There is no ability to deliver IT systems on time and on budget.
Executives do not quite know the best way to ensure alignment between IT and the business.
Executives do not know how to integrate new technologies to establish or maintain a competitive advantage.
There is a lack of understanding of the business metrics that should be used to gauge IT performance.
Executives do not know how to compare their businesses with other companies in their industry with respect to managing the complexities of IT.
Executives do not understand how to cut IT costs without harming the business.
Generally, therefore, the situation is characterised by IT investments that are underperforming, misunderstood and inadequately prioritised.
The Zimbabwean environment offers additional challenges for IT investment. Over the last few years, businesses in the country have been pummelled by high inflation, dwindling technical and managerial skills, the unavailability of foreign currency and price controls. This has had a direct impact on IT investment decisions and predictably, some businesses have adopted a “hibernation” strategy. This strategy, implemented for a prolonged period, has significant negative implications arising from companies falling behind technologically and competitively.
The correct strategy is, to borrow from the investment world, to take a contrarian view. This is in fact an opportune time to plan and strategise on how IT can be used to, at a minimum, maintain competitive advantage and protect current market share. Visionary organisations will be able to go further by using this period to craft IT strategies for the future and to start implementing them in order to leapfrog local and international competitors.
The good news is that something can actually be done about the situation.
First, it is essential that IT is managed as rigorously as any other business function. This entails applying the business disciplines of planning, development and measurement to IT.
Performing capability maturity analyses and benchmarking can help a company to assess IT performance versus other players in the industry. Corrective action can then be taken in the dimension that the company is lagging behind leading practices.
IT strategy formulation is a process that every company must go through every few years. If this process is undertaken comprehensively, with full internal ownership and a clear business strategy as a starting point, IT strategy formulation is likely to result in a company successfully pursuing competitive advantage, achieving operational effectiveness and attaining rapid transformational change.
After strategy formulation, the process of system selection must be carried out in a focused manner to ensure that IT spending and initiatives remain aligned with overall business goals. This does not and cannot happen automatically. Time must be spent to ensure that any IT investment decision or activity can be referenced back to an agreed business strategy element.
In implementing selected systems, it is critical that the non-technical issues of managing change and project management are not ignored. Unfortunately when a project is running late, and the budget is tight, these are the first budget items to be reduced. The reverse should in fact be happening — focusing on change management and project management issues could in fact be the only way out of a problem project.
The lesson that executives who have successfully deployed IT will be able to impart to others will be that effective IT investment does not happen by accident. It takes focus, rigour, vision and a lot of hard work. But as they say, and with apologies to Winston Churchill, if you find yourself going through hell, keep going! You have no choice but to persevere and get your IT right. The alternative may be your certain demise!
Paradza is the director (advisory: systems implementation and effectiveness).
Disclaimer: Neither PricewaterhouseCoopers Zimbabwe nor any other member of the global PricewaterhouseCoopers organisations can accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication. For further information or comments please contact Marketing on firstname.lastname@example.org or 338362-8