Monday, January 09, 2012

The price of inaction

The setting does not matter, but whenever I meet someone unrelated to IT (with IT folks the discussion is anyway about IT), the conversation always ends up talking about how they use technology. Maybe something to do with me, so when I met with a CFO of a large company, we predictably ended up discussing the health of their IT systems.

The company had grown organically to become a leader in its industry and now had global aspirations. Family run, it had over the years it had invested in IT to keep pace with the change in technology. The owners indulged the new generation allowing them to embrace cutting edge while retaining the legacy for the comfort of the stalwarts who built the company. The diversity that thus coexisted was amazing to just admire the profoundness and marvel at how it all worked together.

Hundreds, no thousands of almost disjointed small systems supported mission critical tasks across functions held together by the experienced hands that orchestrated the business. The management had discussed and debated renewal for a decade to replace the increasing inventory of applications with a contemporary ERP. The decision was always deferred with the fact that it has worked for us so far, so it should work in the future too. We have survived downturns, competition, and grown.

They did not have an IT Head and had never thought of getting a CIO. What about cost of sustaining diverse and antiquated technology ? The response was, my IT vendors take care of that. Were employees happy with the situation ? It works, so happiness is not the consideration. Was productivity optimal ? Grudgingly he accepted that it could be improved upon.

In the second decade of the twenty first century a successful large enterprise working with no formal IT strategy nor a CIO; as I dug deeper it was evident that the unfettered IT had its advantages that there was agility in creation of solutions where required; business teams worked with multiple partners and sometimes even individuals to get processes or content enabled. Across various offices and functions this was the norm.

Integration and reporting was on another planet. Rarely anyone agreed to figures; sharing of best practices or synergies in process, unheard of. The local optima did not favor global optima. The CFO was at the receiving end of most of the chaos, but did not see ROI in large scale change. He lamented the fact that competitors were beginning to catch up and technology may have a role in that. The promoters wanted to step back and handover reigns to the next generation and professionals.

Can total or strategic outsourcing solve the problem ? We discussed and debated the merits and challenges of this approach, the change management across the diverse enterprise and employees across locations. Giving away the problem will not necessarily solve it. Someone internally will have to own the change, coax it step by step and create lasting change. S/he will have to take everyone along the journey. 

My humble suggestion to him was to get a CIO.


  1. The CIO also needs to be empowered by top management with strong backing of owner mgmt- else change mgmt in such orgn is tough

  2. Perhaps a "empowered" CIO is required with strong backing from top management.