Since IT Can, Should It?
- June 2nd, 2010
- Posted in Systems Thinking and Financial Industry . Systems Thinking and Technology
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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.
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Thank you for this blog. As an experienced sales engineer I have some observations in this area.
Sometimes the “expensive proposal” has a vendor influencing or enabling it, other times there is no commercial vendor, as the tech solution being proposed is open-source. Even here, it still an issue just as you describe, because the motivations for the solution aren’t necessarily implied or needed from a systems POV.
However, in a few of cases I had the privilege to be on the vendor side, with a good start from a systems POV, the solution resulted in multi-year ROI.
Many times, the need for a vendor has little to do with solutions, but more to do with lining up a “throat to choke” for perceived accountability, liability, and potential litigation. All waste of course.
Cheers,
Miroslav
In my years as an Enterprise Architect (hopefully a Systems Thinking EA!) I’ve seen the same obsession with technology deployed to solve ‘problems’ yet causing far more problems than ever before. It is like the Wizard of Oz; no one dared quesiton its presence or value. IT is a God ! A mad approach !
Great insights from folks “in it.”
IT has a place in service industries, but I would totally agree most vendors of these so called IT solutions have just paved old cow paths. Let alone making it virtually impossible for CI with these enterprise wide solutions. They usually build these systems by adding modules together or should I just say, piece by piece without any overall systems view. I watched a Fed organization become crippled with the implementation of an IT system which was totally configured on command and control thinking and completly missed the mark for ensuring accountability for tax payer funds. Let alone done with new knowledge, which comes from a transformation. I would also agree that it is paramount to fully understand the organization’s and/or system’s purpose before design.
Keith