Corporate Computing Needs New Sartorial Splendor by Bennett B Quillen

by Bennett Quillen

In the use of technology to transform business, it has often delivered poorly and presented itself as rather shabbily attired.

Computers and the internet were meant to put business on a new footing. Newly available information would make everything smarter, from corporate supply chains to the strategic decisions of senior executives. Entire new business models would be made possible: any company that failed to adapt risked extinction.

It has not worked out quite as planned. Despite all it has promised – and in some cases delivered – the explosion of information technology has failed to live up to the hype. Corporate information systems have become complex, ungainly and difficult to manage.

Somewhere in the late 1990s and early 21st century, amid the high-tech innovation, something seems to have gone badly awry. There has been a backlash: instead of being an area that corporate executives looked at to give them a competitive advantage, IT has gone back to what it was before the 1990s boom in wishful thinking: a management headache.

Big IT projects are complex and difficult to make work, with a frighteningly high failure rate. Corporate spending on IT has become an expense to be reined in, not indulged. And the maturing of the wave of technology that arrived with the internet has left companies asking what they got for their money.

The latest symptom of this malaise has been a questioning of the strategic significance of technology to business. What real competitive advantage can be gained from technology, if it is equally available to your competitors? Like electricity and the telephone, it may be a necessity; but also like them, it may have little impact on a company’s real competitive position.

Faced with skepticism of the benefits of technology, the industry is preparing for its next big push: processing in the “cloud”. The real transformation of business still lies ahead, according to this view. It will happen when corporate IT systems operate flawlessly and work together seamlessly. And while the technology itself may not confer an instant competitive advantage, its effective application is vital to business success.

But can technology companies overcome the shortcomings of the past to fulfill this promise? And how will corporate buyers of IT, still dealing with the after-effects of their last wave of spending, react to the claims?

Consider the sources of the problem.

Perhaps the biggest was the arrival of a new computing architecture that liberated users from the tyranny of the mainframe, but exposed a failure in technology management.

This client-server architecture brought new control to the individual user in the shape of a desktop PC. It also handed power to IT (and lines of business) managers, making it easier to develop department-level applications to run the processes that seemed vital in the new internet era. But in the process, the larger corporate picture was lost, consistency was forfeited and IT costs actually increased.

A second source of the problem has been the incompleteness of the technology. While individual applications have proliferated, the tools needed to coordinate and focus them have been lacking.  There is a major gap between technology results and business needs.

This leads to the third reason for technology’s disappointment: its failure to align it with business management. Technology companies tend to blame customers for failing to understand how deeply new IT systems impact their business processes, while the users blame technology for being too rigid.

One symptom has been the high failure rate of IT projects. Too many projects are taken on with faith and without the basic project management being in place.   Large number of IT projects fail or simply do not deliver on promises.

Another symptom is the low utilization of corporate IT assets. During the boom, many companies added servers and storage every time they introduced a new department-level IT application. As a result, considerably less than half of this IT capacity is actually used.

And finally, it is the high cost of maintaining corporate information systems. More than half the money big companies spend on IT is used to employ an army of technicians.

So, what is the answer to this crisis in corporate computing?

The IT industry’s prescription and make over need to take the hard work out of building and managing IT systems, freeing companies to concentrate on using the technology to its potential.

The main features of the promised new generation of corporate IT systems are:

Integration. The need to weave together the disparate applications is the most pressing issue facing chief information officers.

Much rests on the development of industry-wide technical standards that allow interoperability of different IT systems and mobile devices e.g. tablets and laptops. In the past, tech companies focused much of their effort on developing and maintaining their own proprietary technologies. This strategy was sold as essential to maintaining high profit margins. Most now claim to see the world differently.

The result is that many companies, particularly financial institutions, are now outsourcing their transaction-oriented, commodity based applications.  This permits them to focus on technology development and deployment, either internally or via third parties, to potentially set them apart from the herd.

Automation. The key to keeping down the soaring headcount in corporate IT departments revolves around creating technology that can maintain itself. This is the flip side of outsourcing: it drives down the cost of processing.

Virtualization. By using the internet to link corporate IT assets together, it may be possible to tap unused computing or storage resources more efficiently. Turning all these assets into one giant “virtual” machine holds out the promise of sharing work out where it can be handled most effectively. This is the ubiquitous cloud promulgated by the likes of IBM, Google and other corporate giants.

Utility computing. Once IT systems have been better integrated and virtualized, it will become easier, in theory, for companies to tap into specialist utility companies to supply some or all their computing needs. Then companies will be able to decide whether they want to stay in the business of building and maintaining technology or whether this is best left to outside suppliers.

The irony behind the convergence of cloud based processing and proliferation of internet based applications is the resurgence of mainframe processing. 

All of these efforts are geared towards one end: genuinely clothe IT in sartorial splendor to serve enterprise’s interests better.