In my 20 years in business I have never known anything quite like the turbulence now affecting the corporate world. Already this year, HIH and One.Tel went belly-up, Franklins withdrew from the market, Fosters is fighting off a rumoured take-over and BHP merged with Billiton. These examples are just the tip of the iceberg. Many of the CIOs I meet feel hamstrung by these forces. Executives are so preoccupied with the next boardroom deal that few seem interested in how IT can enhance the business.
I see this business turmoil generating an inertia in many IS departments. The emphasis is very much on the here-and-now; anything further out than 90 days seems to be regarded as visionary. Invariably, this must lead to an internal focus and a preoccupation with cost-containment.
My main concern with these forces is that the deficiencies of short-term thinking are invariably only exposed in the long term. Most typically this is highlighted by a lack of investment in infrastructure. The frantic road-building now going on in Sydney and Melbourne is because our predecessors failed to plan for the universality of car ownership. Similarly, IT departments saddled with obsolete networks will act as a millstone around the necks of organisations seeking to change and adapt quickly to an increasingly online and global business world.
How then can a CIO respond? One tactic is to highlight the penalty of inertia. Just because you are not spending money does not mean you are saving money. For example, after Y2K a lot of IS maintenance budgets declined. In business, outdated systems will lose an organisation customers and market share if its competitors leapfrog it with more efficient business processes. That is a cost of inactivity.
IT also needs to remember that good business systems are a strategic asset. Qantas openly admitted that one of the attractions of Impulse was the opportunity to capture its online booking systems. A CIO who builds a flexible, integrated and efficient set of business systems is increasing the intellectual capital and value of an organisation.
Any student of history will tell you the business world is made up of economic cycles. Most of these are influenced by where investors believe they will get their best returns. For much of the 1990s that perception was the stock market. As share prices stagnate or decline, investors will look elsewhere for their rewards. When they do, we are likely to see much more stability in business and a greater focus on growth via traditional sales. When this happens, the successful businesses will be those that continued to plan ahead when times were tough.
The CIO who "seizes the day" and explains the price of inertia will change the dynamics of the IT-business relationship. Instead of IT having to be defensive about what it costs the organisation, the shoe on the other foot. Is the executive prepared to take the risk of doing nothing?
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