In my last piece on CIO of the Future, Must the Business Always Bypass IT When It Wants to Innovate?, it was pretty clear that I believed that people, and I don’t mean just IT department staff, were a key factor in the issues that come from the introduction of new technologies and new business uses for technology.
I then posed the question as to whether Line of Business (LoB) managers must always bypass the IT department when they want to innovate, and suggested that this is both the right course of action as well as being acceptable from an IT departmental systems risk basis, providing the activities were indeed truly isolated from, and unconnected to, the IT systems. Why? Because these new externally oriented and innovative uses of IT have nothing in common with the use made of IT in the internal environment.
I stated, however, that there are new risks to be clarified and managed around what, where, and how an enterprise’s people actually use these new powerful and often publicly visible capabilities.
The new front office
We look to managers to add their personal value in the form of experience and knowledge that they bring to their role. These roles are those of the Front Office staff whose interactions outside the enterprise, principally with Sales and Marketing, but also with Service Engineers, Purchasing, and Logistics staff, allows new value to be created. By value we mean increased sales revenues, more market share, and new types of products, all of which improve operational results.
This is quite different to IT’s traditional role of enabling the Back Office to operate internal processes at lower cost and with greater efficiency. IT staff don’t readily appreciate this important difference, or why paying for this out of non-IT budgets based on very different justifications makes sense.
The old saying was that half of all marketing spend is wasted, but we don’t know which half. Today marketing spend is on building online, interactive relationships with customers and potential customers, so we no longer quite have this problem.
People are in these externally facing roles for their ability to optimize the outcomes from events that are outside the control of the enterprise, calling on their personal judgment and experience to make the difference. Two decades of IT focused on optimizing internal processes has been able to offer little to help them beyond using mobility to allow them to access internal IT processes.
All too often mobility for the IT department has meant the ability to deliver accessibility to selected enterprise applications from outside the enterprise firewall. In connection with this new external environment, using new technology for the front office ‘mobility’ has a totally different meaning. Cloud suffers from the same challenge in understanding too.
Mobility should mean allowing people to be able to truly work differently by using social tools, services and apps together with a variety of different devices, including BYOD, to achieve ‘mobility’ of purpose, activity, and circumstance.
The new role for CRM
CRM is an excellent example to help us understand the issues and why conflict and confusion occurs.
CRM was introduced initially to make better use of the data created by transactions in enterprise IT applications, and as an internal tool it helped IT to align Sales with the rest of the business.
CRM then moved forward with new capabilities based on increasing use of websites to help enable sales to identify customers buying habits better.
Now CRM is being redefined from the direction of the customer, or even potential customer, to allow an enterprise to hear what the customer wants and then to try to match the customer with its products and services.
Embedding consumer technologies in your organization
As society as a whole moves to become increasingly composed of Digital Natives many industry sectors and enterprises are seeing these new technologies as ‘embedded’ in their business model: think of music, travel, personal banking, etc.
The diagram below breaks the journey from automating the back office to empowering the front office into three stages – Aligned, Enabling, and Embedded – but it doesn’t bring out the dynamics that this reality introduces.
Source: Andy Mulholland
Most IT departments are organized to operate (indeed it is essential that they carefully maintain) the data-centric transaction integrity of core internal processes, but find themselves increasingly being asked to connect to the middle box in the diagram to support various online business initiatives and are rightly wary of the risks, and indeed difficulties of this.
The Line of Business managers are working from a totally different perspective. They are coming from the top right box, driven by the need to compete innovatively in new ways in a market that is synonymous with, and can only exist because of, new technologies.
The new front office is focused outside the business
In Must the Business Always Bypass IT When It Wants to Innovate? I focused on why innovation could happen in this Embedded environment. Rapid experimentation is reasonably safe providing it remains isolated from the aligned environment.
The current conflicts occur when either or both sides try to move together into the enabled zone.
Both sides have good reason for their entrenched positions and both are currently almost irreconcilable, though in time new middleware and integration products and methods will come into play to allow this necessary scaling step in reintegrating an enterprise to occur.
But, and it’s a big but, this reintegration will occur around a different business model. This is an outside-in model, the so called ‘innovative business model’, which tries to match the operating model with how with how customers and clients want to buy and consume the company’s products. This is opposed to the BPR model of ERP that emerged in the early 90s, using technology to design the business model from inside out to restrict variation in favor of reducing costs and improving efficiency as the means of increasing competitiveness.
Inside-Out, referring to the role of IT inside the enterprise and firewall with a limited secondary role outside, versus Outside-In meaning that the new front office is focused outside the enterprise and its firewall with limited access to the IT systems inside. It’s a key point to fully grasp and understand, but do so and most things become clear.
Social Tools and BYOD are key tools for embedding IT in the business
Social Tools and BYOD? These are the key elements that support people-focused embedded businesses, and as such they are the tools that free users from the necessarily constrained environment of IT.
Let’s illustrate this by remembering that email was introduced to support the business model change that PC-based Client-Server introduced as Business Process Re-engineering. As the business processes changed to flow across the enterprise, rather than being contained in departments, a new model was needed to communicate with the people along each process: email! Now we are adopting an event-responsive business model we need a new communication model that frees the constraints that process based email imposes; that’s the role of the collaborative social tools.
It’s hard to let go of users and the mentality that goes with it. But it’s also necessary to understand who should be set free, and why. Failure to do so proactively and properly, merely means that they will escape anyway.
So the lesson is that a controlled and managed release of people equipped with the right training, risk management and indeed using new discovery tools to dynamically understand is the best method to ensure risk and security of the existing systems stays intact, and that your enterprise has people trained to make the most of powerful new technology to innovate with a reduced risk.
Otherwise your users will escape what they will see as the ‘dead hand’ blocking much needed moves to compete. And the problem with escapees is that nobody knows who they are, where they are, or most of all what value or risk and cost they pose!
Featured Image Source: Kalyan Chakravarthy