Clark Stanley's Snake Oil Liniment. Before 1920.
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My good friend David Joyce brought up an old post on IT with the title of this post.  David has a blog he started in April, 2009 titled Lean and Kanban and really has become a journey of applying systems thinking to software development and support.  Now, if I can just get David to change the name of his blog.

In my original post Innovation without Technology where I posed the question “If IT can, should it?” I called out those that use technology as a panacea for all the ills of service business . . . which is most people.  Calls for “Let’s automate the process” and  “Our processes are too paper-based or too manual” ring through many service companies.  These assumptions are costly.

 While doing bank management consulting I started to discover how badly IT was broken.  In small and mid-sized banks, there is a reliance on outside help for software development.  But these vendors were ill-equipped to help these banks.  Software vendors had ready made packages full of best practices, IVRs and other entrapping technology to achieve economies of scale.

The economy of scale proposition was attractive as they got software cheap or so they thought.  As with many other posts I have written, reducing costs always increases them.  Small and mid-sized banks cannot compete on scale, they must compete on flow (economies of flow). 

The flow is the ticket to overcome the scale advantage of big banks.  Just ask the Japanese how they were able to compete with and beat the US with few resources and a huge disadvantage in scale.  The answer, of course, is flow.

IT companies can gain a considerable advantage using systems thinking as David Joyce discovered.  Banks, governments and many other service organizations would gain greatly from software vendors that could grasp these concepts.  The problem is the thinking and system design that gets in the way.

My experience with software vendors in banking and government is not impressive.  The financials and structure get in the way.  Financial targets breed schedules and project plans and the game becomes hitting the targets and timelines . . . and managing the scope through contracts and change orders.  These things are all waste and when working with a software vendor beware the snake oil.

Before IT hits you for another expensive proposal – STOP!  The design of the work needs to be looked at first.  What is the work without technology?  What is the customer purpose?  Designing a system against customer purpose will save on your IT spend.

If you are looking to save on your IT spend, it will take a different approach than what software vendors are pushing.

Leave me a comment. . . share your opinion!  Click on comments below.

Make the new decade a profitable and rewarding one, start a new path here.  Download free from “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about how to get started at [email protected].  Reach him on Twitter at LinkedIn at