How Do Businesses Use Their IT Dollars
Posted on January 18, 2008
Filed Under Business use of IT | Leave a Comment
I want to explore how businesses make effective use of their technology investment. I will be using this blog as a vehicle to share my findings. I would like to learn how the business managers (CEO’s, Presidents, Owners) actually view their companies IT investment. I want to find out how the key users (stakeholders) view their companies IT systems. Are they getting the benefit they need to help them manage in their respective areas? I have a hunch that the majority feel that they are not getting the value out of it that they expected. I want to know why.
I have been involved in the Information Technology business since the early 1980’s. I have witnessed the relentless drive towards commoditization. I firmly believe that the low cost technology always wins. There is no longer a “competitive advantage” in having the basic IT infrastructure needed for businesses transaction systems, productivity tools (word processing, email, etc). These systems have become so ubiquitous and embedded into the daily operations of business that if you don’t have them you are at risk of not even being in business.
Consider email for example, a relatively new technology. Twenty years ago if the postal service was stopped did your business stop? How ludicrous, but if your email system is down today you know that your employees all want to go home because they, “can’t work.”
I will say again, there is no competitive advantage in having the basic IT infrastructure. These systems need to be 100% reliable. Companies should focus on this and not spend any more than they need to in order to achieve reliable functionality. Companies should spend their money on information systems that actually help grow their business. Effective use of information systems is still a competitive advantage.
I remember towards the end of the “dot.com” boom I had an epiphany of sorts. Who cannot remember all the hype about, “clear first mover advantage.” Amidst all the FUD (Fear, Uncertainty and Doubt) that was being used to sell new systems to companies I remembered the famous dictum of Carl von Clausewitz, that war was an extension of policy by other means. I realized that since business is often compared to a kind of warfare that the Internet was not new business, it was just business by other means, but it was still business.
Today businesses need to use all methods available to them, including Information Systems to help them grow their business. Spend your IT dollars on those information systems that will help you to do that.
- Customer Relationship Systems that actually work, not make more work.
- Business Intelligence or reporting systems that deliver relevant analytical data that can be acted upon sooner rather than later.
- Customer facing systems need to be reliable, compelling and add value to the customer or prospect.
Spend the money here.
In the coming weeks, months and years I will be exploring these and other issues. I invite your participation.