The company website is in its second generation. Management is looking at your proposal to dump EDI in favour of an IP-based approach. Plans for the enterprise resource modules are going up to the Board because of the costs involved, but you’re not worried. All in all, things are ticking along quite nicely. For a CIO with lots of battle scars and ribbons, you’re a happy camper. After years of listening to you go on about the value of IT (and scaring them half to death with a Y2K wake-up call) senior management seems to have woken up and jumped on board the IT train. They’re giving you lots of money to maintain systems and keep the company competitive with the newest technologies. What’s not to like?
A lot. In fact, you’ve put your company in a real bind and you’re the only one who can get them out of it. If you don’t, your organization is in really big trouble.
Think back to how things used to be. Your job was to keep the systems up and running. Period. If you had tried to tell management that there’s was an IT-based business; they would have looked at you like you had two heads. If you told them that it was their job to create IT-based business value by leveraging IT assets for competitive advantage, they would have told you to make sure the “G-D network didn’t go down again this week.”
“We’re running a (you fill in the blank) business, not a technology company,” they’d say.
“You stick to your knitting.”
Now even the flakiest manager is beginning to understand that every company is a technology-based company. Now they are beginning to understand a little bit about the stuff behind the curtain at the Wal-Marts, the Dells and the Amazon.coms of the world. They’re fascinated. They’re salivating. And they’re developing expectations that are ‘way off the scale. In the space of five years, they’ve gone from, “Why pour more money into that black hole called IT, we never see any return?” to ” IT investments will pay back two dollars for every one we invest by the end of the year.”
These management converts to IT-based business value get starry-eyed about the prospects for their organization. They are exactly where you wanted them to be. And they are in exactly the wrong place. Being starry-eyed is often a symptom for being empty-headed. What they’ve forgotten as they inflate their expectations is that an IT-based business is a business. And successfully managing an IT-dependent business is not about buying new systems or technologies, no matter how exotic or pervasive. “e-management” is far more complex and difficult than that.
e-management is about the creation of a business strategy that exploits the latest information technology in the development and production of your goods and services and their delivery to your customers. And this entails reviewing all of the current strategic theology to ensure that it complements the intended configuration of the business model. Location, organizational structure, current partners, potential new markets, governance, capital requirements, channels, planning processes, accountability, and so on, all have to be scrutinized.
e-management is also about the execution of the business strategy. And that means making sure that all of the components of the IT-based business model required to deliver the strategy are available and capable of optimizing its operations. Do your employees need some new skill sets? Does management need to adopt new responsibilities or gain new competencies? Is the current management team up to speed? What performance metrics are going to be used? Everything has to be in place in such a way as to ensure that the IT elements in the business model can deliver their full potential.
The success of e-commerce, e-business or e-government isn’t based upon new information technology. It depends upon mature and informed e-management. And that’s what you’ve got to help create in your organization. No organization will succeed simply because it’s got the latest stuff, however exotic, however pervasive. You can’t buy your way into the New Jerusalem. What got Wal-Mart, Cisco and Dell up in the front tier wasn’t information technology; it was the business models that management developed that drove that technology to their success.
IT is central to the business strategy and its execution. You’ve always known it and now so do management. But you know that IT strategy is not business strategy. And you know that e-management is not IT management, nor conversely. Now it’s time to make sure management understands that as well.
A former senior executive in the federal public service, Chuck Belford started his own Nepean-based management consulting and management training company, Network Environment Associates, in 1994. Mr. Belford lives in Nepean, Ont.