Friday, 16 January 2009

The King is dead. Long live the King!

The evidence is damning. IT is failing to meet the needs of the Business. The business does not trust IT, and it's gradually taking control of technology itself, more and more. IT must change or be left behind......

An ISACA study last year, "Changing Business Needs and Unmet Expectations Are Leading Causes of Technology Project Failure", revealed that nearly half of the Organizations surveyed have ended technology projects prematurely, with the top two reasons being that business needs had changed (29.9 percent) and the project did not deliver as promised (23.4 percent).

In the article, 'IT Doesn't Matter' (Harvard Business Review, May 2003), Professor Nicholas Carr argues that technology evolves so rapidly that IT will become a commodity, and no company can differentiate itself with a commodity. He concluded that the way you approach IT investment and management will need to change dramatically.

In the MITSloan article (Fall 2007, Vol.49 No.1), "Avoiding the Alignment Trap in Information Technology", they survey 452 companies and found a pattern to IT disappointment and failure in two clear tones: general ineffectiveness at bringing projects in on time and on budget, and ineffectiveness with the added complication of alignment to an important business objective - which they called the 'alignment trap'.

In "The Business-IT Expectation Gap" (Alex Cullen, 7th Nov 2008), a Forrester survey of 600 business executives reinforces what many IT executives may sense: While technology is very important to firms, IT is not expected to meet, nor does it succeed at meeting, the technology needs of the business. In "Closing The Business Technology Alignment Gap", Forrester Leadership Boards CIO Group discussed the challenge to IT's role from this recent survey, and identified the following gaps:

  • Business Execs have high expectations of technology, but lower confidence that IT can deliver to these expectations
  • Business does not perceive that IT is aligned around business' priorities
  • Business considers several sourcing alternatives to IT

In this report, Forrester makes a number of recommendations including that business and technology planning are done together, move to a "collaborative work model" where some IT skills are embedded within business organisations, create Centres of Excellence for business change skills, and separate "business enablement" functions from IT delivery and operations. The last one of these recommendations highlights a key trend in Enterprise Architecture, where EA, or sometimes just Business Architecture, live outside of the IT organisation, and are part of the Business enablement function.


So, where does this leave IT, how should it change, and who is best placed to help guide us into the new world.

Some ideas can be found in the new book "Business/IT Fusion", where Peter Hinssen defines 'Fusion' as the blending of IT into the business. No longer treating IT as a supplier but completely integrating IT into the business. He says that Fusion will allow companies to focus on technology-enabled innovation, instead of just on the commodity savings potential of technology.

As Web 2.0 technologies are taken on by the Business, we are moving to a world of Enterprise 2.0. And as this technology advances and merges into the Business world, we will get new business models that bring innovation through technology, this is the world of Business Technology. Forrester predicts, in "Business Technology Defined" (7th May 2007), that over the next five years business will become so deeply embodied in technology, and the technology so deeply embedded in the business, that IT will need to be managed quite differently. And two years into that prediction, we're already seeing its impact.

In order to survive this new world you need professionals who can understand both the business context and the technology context, and they need to be able to show how the technology can best be used to enable and bring value to business models. Enterprise Architects are in this unique position, and already have some of the tools and methods required to deliver efficient and flexible IT solutions. But how do they ensure that these solutions are most effective for the business? Traditionally we have captured requirements from the business, and delivered solutions using IT's interpretation of what the business wants. Enterprise Architecture and Agile methods have brought us improved ways of working with the Business, but are these fit for the future world where the Business will take the lead on Technology?

As Enterprise Architects, we often preach about 'alignment' with the business, but that often feels like we are playing catch-up with the business and innovation is constrained to the scope that the business has already determined and set for IT. Surely there's a better way.

The answer lies in the EA domain of Business Architecture. The methods and tools that Business Architects need to design business models within an Enterprise Architecture context are critical to being able to work collaboratively with the business and deliver effective Business Technology.

In this blog, I will explore different Business Architecture methods and tools, modelling techniques and views, that you will need to be armed with as we enter the new world of Business Technology. I'll also look at the latest research and thought leadership in this area, providing you with my own view on how this may all come together.

5 comments:

  1. Hi Steve,

    Some really well-made points. I could not agree with you more.

    In my recent book Value-Driven IT, I make a case for business taking back IT - whether it wants it or not! The fact is, in any organization that is a heavy user of IT, it no longer makes sense to separate IT and the business. To do so is to hand over critical decisions to an entity that is disconnected from the main value streams of the company. IT decisions ARE business decisions.

    There are many organizations that have tried to succeed in IT ventures on the business side, and think that they would be better served to let IT do the IT stuff, so that the business can use the IT systems as a service. What they do not realize is that they will be going from the kettle into the fire so to speak. IT is no better equipped to build effective, strategic business systems in a timely manner than the business is.

    My own blog and book can be read at http://ValueDrivenIT.com

    - Cliff

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