1.5 Information Technology Strategy and Execution

IT strategies are notorious for being hard to execute (i.e., for taking longer than planned, exceeding budget, and failing to deliver promised benefits). You enter IT’s danger zone when you get caught up in what IT can do instead of staying focused on why you are adopting IT. If you lose focus, you begin to see IT as THE solution rather than as an enabler. One possible result: You get stuck in one of two common IT black holes.

Implementation: IT Black Holes

When your goal mistakenly shifts from enabling value creation to acquiring cutting-edge technology, you risk two negative, but common implementation influences:

  1. Blinded by Bling: Shiny hardware and software can blind you to the key issues that drive successful IT implementations: process change, training, and measurement. You put the cart (technology) before the horse (process design).

  2. Me-tooism: You end up with a “me-too” capability. Anybody can buy and implement IT. Leveraging IT to enable a unique supply chain capability is hard.

When you are blinded by bling or settle for me-tooism, you can easily succumb to technology creep or get caught up in isolated technology investments. These look cool, but they don’t improve your overall capabilities.

How do you avoid technology creep and isolated initiatives? You clearly define how IT enables the value creation that your customers value. Your goal is simple. You want to use IT to quickly and inexpensively share accurate and relevant information so decision makers can make great decisions—across your organization as well as up and down your supply chain.

Effective information sharing can deliver remarkable operating improvements and stronger relationships. Figure 1.6, for example, shows that IT-enabled information sharing allows you to build lean operations, increase agility, create distinctive customer value, and cultivate learning.

Figure 1.6: Benefits of IT Enablement

Although IT can enable game-changing capabilities when used correctly, few companies have fully leveraged IT’s potential. Why, you ask? Sadly, too many companies continue to implement IT without using it to improve the way work is done. The companies that do, make their rivals obsolete—think Netflix’s battle with Blockbuster. A classic McKinsey Consulting study of re-engineering efforts found that 14 out of 20 (70 percent) had failed to achieve targeted goals. The study found that companies focused on local process improvements (i.e., isolated initiatives).1

Michael Hammer, the brain trust behind process re-engineering, later lamented that fewer than 10 percent of large corporations actually used IT to re-imagine processes.

Implementation: A Proven Path

Figure 1.7 depicts a proven path to IT enablement. Following this path can help you maximize your return on IT investments.

Figure 1.7: A Proven Path to IT Enablement

Route Marker 1: View IT as an Enabler

Effective IT is always an enabler—of better decision-making, improved processes, stronger relationships, and more effective collaboration. IT isn’t the solution. So, don’t forget this warning from a senior executive: “There are no silver bullets, but there are plenty of people willing to sell you one.”

Route Marker 2: Use IT to Drive Innovation

Many companies use IT to simply automate existing processes, and they miss out on opportunities to do things better. When you focus on efficiency, you run the risk of alienating the people who must implement and use the technology. Fear arises and people worry that efficiencies will lead to layoffs. So, they resist change and will not share their best ideas for re-designing processes.

Route Marker 3: Avoid Technology Traps

When IT is adopted for the wrong reasons (see Route Markers #1 and #2 above), you risk falling into the following common IT traps:

  1. Technology as the Silver Bullet: Many companies find it easier to buy IT than to fix cultures or redesign underperforming processes.

  2. Follow-the-Competition Mentality: Trying to avoid being out-gunned in an IT arms race makes it easy to play defense and invest in the technologies “everyone” is buying.

  3. Shiny-Hardware Syndrome: As a rule, buy the IT you need to get the job done. Don’t overspend by getting caught up in the quest for the latest “shiny hardware (or software).”

  4. Island of Automation: Don’t invest in cool IT that simply shifts a bottleneck. Evaluate, and ask yourself, “How will this IT investment improve performance for the entire process?”

You don’t want to stumble into one of these traps thinking you are making a powerful investment only to find you have entered a painful, costly implementation that delivers minimal returns.

Route Marker 4: Keep Your Eye on the Capabilities-Technology Map

Disciplined companies map IT investments to desired strategic capabilities. At one Fortune 100 company, a capabilities-priority chart is displayed on a conference room wall. Strategic capabilities are listed across the top row of the chart. Proposed investments are listed down the left-hand side. Investments that do not support specific capabilities are not made—period!

Why is this IT-capabilities map so valuable? Because as people evaluate how a technology will contribute to strategic capabilities, improve competitive positioning, and enhance operational performance, their buy-in goes up. Technophobia is reduced.

Route Marker 5: Guided by the 3 Ps of Technology Adoption

To reduce the disruption that IT adoption induces, keep the 3 Ps of IT adoption in mind:

  1. Process: IT enables process reimagination; however, desired process capabilities must define the IT need—not the other way around. Let the reimagined process guide your IT investments.

  2. Performance Measurement: Tom Peters said, “What gets measured gets done.”2 If your process changes dramatically, you need to change your measures. Measures need to support the behaviors and skills needed to make the new process work.

  3. People: One Fortune 500 company shared the catchphrase, “Technology is an enabler, people are the bridge or the barrier.” Why? Managers knew that process redesign affects people’s jobs—and their livelihood. You can’t afford to forget this fact. If IT “enables” positive changes for your people, they will embrace the new IT and the new process.

Route Marker 6: Be Disciplined and Stay Balanced

Establishing a culture that stays balanced over the long haul is the hardest step of all. You need to keep investing in trust, open and honest communication, an infrastructure of aligned goals, measurement, and training. Your organizational culture and structure must emphasize and support IT enablement.

To summarize, IT enablement can help you win tough competitive battles. However, you need to think holistically, investing in IT, people, and change. Too many ERP implementations have strayed from the proven path of IT implementation.

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