The Tip of the Iceberg

Dellit points out the problem may have been far bigger even than was suggested in Justice Owen's report, since commission proceedings were dominated by lawyers who may not have appreciated the true extent of the IT system's underperformance and its contribution to managerial decision making and wider stakeholder understanding of the state of the HIH group.

Whatever the true extent of the problem, Gartner research director Greta James asserts it would be very wrong to conclude HIH was in any way unique in experiencing such problems. However desirable it is for organisations to minimise the number of applications and platforms they run, the simple reality is that there are more applications in large enterprises today than ever before, and the diversity of those applications is greater than ever before.

James points out that most efforts to move to a single uniform platform in the 80s, such as the notoriously failed Westpac CS90 project, were unsuccessful because of the complexity involved, and because of the difficulty of selling the business case against competing projects promising new products and distribution channels. But she also argues that with application middleware having been available and proving its worth for the past seven years, there is no time like now for a determined renewal of such efforts.

"You need to deal with that complexity, and there are two main ways of doing that," James says. "Firstly, to not let it proliferate in an uncontrolled way, and that is what enterprise architecture is all about. And the second thing is, you're not going to eliminate diversity altogether because if you did, the enterprise would never buy another packaged application, and packaged applications have some real business benefits. So you need to deal with that diversity, and that's where application integration middleware comes in."

She says the role of the enterprise architect is to highlight the amount of information that currently gets summarised in spreadsheets in Excel, and then sits on people's desktops.

"A lot of that summarising financial information is not done in a systematic way, it's very much the responsibility of an individual. So often there is no repeatable process, and being on an individual's desktop, the data may or may not get backed up," James says. "It's really hit and miss. And then how that information is pulled together with other information from other sources to bring a consolidated view of financial statements - once again, it's often a very hit and miss activity."

While many of those spreadsheets are not within the control of the CIO, that person does have the responsibility of working with the business, especially the "operations and methods people" to bring all of that information together, she says.

There's a clear warning here for the many Australian companies still operating numerous different systems for managing data, and hence facing similar problems extracting a completely accurate and timely picture of organisational health.

HIH should have been integrating systems incrementally since the day it began its acquisition strategy perhaps a decade ago, although Phillipps concedes such a move would have been an unlikely priority for most corporations back then, and the ROI case would at any rate have been extremely difficult to win. There also was little middleware available at that time to simplify the job, he says. "But it came to a couple of years ago and they had such a great variety of systems and accounting information available to them that it was probably such a big issue it would have required tens of millions of dollars, I would have thought."

Phillipps warns perhaps one in every three Australian companies still experiences reasonably significant challenges with information flowing though to management, some of it technologically driven, and some driven by the philosophy of diverse business divisions. "My advice to CIOs is they should be challenging the board now to allow them the room to provide good management information," he says. "Some of that will be systems-based. Some of it will be the culture of the organisation to demand the right information to manage the business."

It is advice CIOs really ought to take on board, so they can avoid forcing forensic analysts like Phillipps to ever get that deja vu feeling again.