IT from a Business Perspective

We have a big problem. Our information age has hit a brick wall when it comes to productivity and quality of the IT process. Over the past 40 years IT has become an integral part of virtually every business. It is difficult to even think of a business process that isn’t supported by IT. So much so that IT is actually the primary limiting factor in business success.

Every CEO wants to make progress for the future. He wants to: 

• Maximize revenue at the point of contact with the customer 
• Offer Innovative products and services the competition can’t duplicate 
• Deliver the right information at the right time for business improvement and customer improvement

Every one of these goals requires IT results. IT is the brick wall holding it all back.

I’m not knocking IT people. IT people are actually the heroes. They should be given a large prize for getting the results they do achieve, given the obstacles in their way.

But our IT process is very broken. The Standish Group has been tracking successes and failures of software projects for over 20 years. They report that the most successful year on record was 2003, when two out of three new projects failed. They either went awry and were cancelled outright or the users considered the results unsatisfactory.

A 66% failure rate is bad enough, but it gets worse. The Gartner group reports that about 80% of the average IT budget in the U.S. is spent just keeping the old legacy software running.

If you were the CEO, how could you be expected to make your company successful and keep it successful? 80% of your IT budget is sucked down the drain just keeping the old IT engine running. And of the measly 20% that’s left, there is a two out of three chance that it will be wasted.

CEOs are hired to push all the right buttons and move their company forward. They are expected to increase business efficiency, increase market share, and increase profits. But most of those buttons can’t be pushed. They are broken.

Especially in the information age, every great idea the CEO has requires IT results. But there is a serious gap between what the CEO needs and what the IT process can deliver. So, they go about implementing ideas that either don’t require IT results or require only incremental legacy system software changes to get by.

It’s very bad. It’s so bad that the CEO doesn’t even want to talk about it. As soon as you mention software he says, “Go see my IT guy”. But the “IT guy” isn’t even on the same floor as the executives. And he doesn’t even speak the same language.

The IT guy is forced to run a department that is "Transactional". He must make sure that every transaction that is entered today gets processed today. He doesn’t have the time or the resources to even think about the future.

The CEO needs an IT department that’s “Transformational”. Businesses must continually transform themselves, just to survive. Almost any business that is doing the same thing ten years from now won’t even be around.

We need innovation. Continuous innovation is the one core competency required for survival. And today, innovation is a two-letter word spelled “IT”. We need something that will knock down that brick wall. We need something that will do for the information age what the assembly line did for the industrial age, an order of magnitude improvement in the efficiency and quality of the process.

The CEO is stuck. He has an albatross around his neck. He is stuck in legacy land. If he could make a wish for the perfect solution to this problem, he would probably say something like: 

• Get rid of this legacy software that’s sucking 80% of my IT budget down the drain
• Give me software that does exactly what I want it to do
• Give it to me right away
• I don’t want to spend a lot of money on it
• And I don’t want to take any risk

We must make the CEO’s wish come true. Your future depends on it. We can begin by setting our IT priorities to reflect the real business world our companies must operate in. We must replace the old legacy software with software that does exactly what our CEO needs for the future. Our traditional IT priorities must take a back seat. We must: 

• Stop! Using tools and techniques that are industry standard. Your CEO would want you to use the tools that get you to “Done” the quickest. Forget standards. Focus on results. There are tools available today that deliver a 10:1 advantage over traditional methods of developing software. Check out eDeveloper from Magic Software Enterprises. People using eDeveloper have won every speed of development contest they have entered for decades. 
  
  
• Stop! Assuming software development projects cost a lot of money. Large teams are great if you are digging a tunnel. Small teams are best for software design and development. In a recent study by Quantitative Software Management, teams averaging 34 people completed a 100,000-line-of-code project in 5.6 months at a cost of $2.1 million. Teams averaging 4 people took about two weeks longer but cost just $294,000.

I could go on, but you get the picture. The IT process should be run from a business perspective. Focus on results and figure out a way to deliver all projects complete and on time every time at a fraction of normal cost. I know it sounds impossible but there are people who do that all the time.

Forget traditional methods. Change the way the job is done. That’s what Henry Ford did with the assembly line to achieve astounding results. We can do the same for our information age.

About the author
Art Pennington is President of the Profit Research Institute and creator of the Profit Method of transforming business.