Thursday, June 10, 2010

The missing "I" in IT (1)

Various articles have pointed out the diminished importance of CIO in organizations. It should not have been a surprise. 

Since the tech bubble in 2000, people should have foreseen this coming, why?
I call it the missing "I" in IT - or as I sometimes say - "IT is about I, before T", or in more avid language, the dog should wag the tail, not the other way around.

Apparently, most CIO focused too much on "T", instead of "I", hence deprecated their own value.  (The tail waged the dog)

OK, let's do a quick quiz, in less than 10 words, can you please explain what is "IT"?   "Computer and related stuff" is the most common answer, next ? "Computer and related stuff used in doing business" - at least business is mentioned.

However, both answers are in the T before I camp, not the I camp.  Computers and related stuff are the technology part of IT that "can be used" in processing information.  However, computers can be used to fry an egg in addition to process data.  (for those of you who are too young to know, when Intel first released its 80486 CPU, CPU fans were not around yet, and the CPU generated so much hit, there was a video posted people fried an egg on it.)

IT is about information.   One of the oldest and still widely used IT innovation is pen and paper.  Seriously, it was high tech at the time it was invented, and still very important tool we use this very day - although we don't call it high-tech anymore.

Now, what a low tech pen/paper has anything to do with our discussion of IT?  It was an invention to record information.  Think about it, what pens do to paper is not to make the paper more valuable in terms of weight, or any other physical measure --  instead, it is making marks that is now called information.

I always advocate people think about computers as pen/paper, because
IT should be about using technology to collect and process information.  
Not about how to sharpen your pencil more reliably.

If a CIO's focus is all "I make sure my computers run!" the CIO adds barely any value to a company.  Think about it, a company has all the pencils that are sharp all the time, but barely any one literate, when can these pencils do to help the business?  Unfortunately sharpening pencils that barely used happens all too often, and it depreciate the value of CIO in the business world.

Running the most reliable gadget that does little to enhance information processing within an Organization is a big trap for many CIOs who lost their prestiges status - they are just a glorified pencil sharpener.

IT should be about efficiency, not technology.   Management has always been about information, collect information regarding how things work, process information to understand how things work, analyze information to facilitate decision making, send out information to execute, present information to manage public relationship, etc.

Information is control - the better, more comprehensive information flows within an organization, the better control the leadership has.  Of course technology helps here.  That is actually the core value of IT - helps information flow with in an organization more effectively, efficiently with all the available technologies.

A classic example is inventory level.  Let's say a warehouse retailer, carries 15 days worth of inventory because it does inventory count weekly, it takes 3 days for the vendor to ship the products, and they need 5 days buffer - because they are not sure how fast each item sells.

Now with an inventory management solution, they should no longer need to count inventory every week - each in and out are traced, so they can save 6 days out of 7 days counting cycle.  So this inventory system can save 6 out of 15 days inventory for this retailer.  If this retailer is large, cutting 40% inventory can mean tens of millions.
Now, how about the POS system that tracks all items sold?  That will make 5 day buffer probably no more than 3 days (the order and shipping time).
A forecast system that forecast sales, and inventory level that enables pre-order of short of stock merchant will cut another 5 days off the cycle -- because no buffer needed any more, and orders can be placed early to accommodate shipping time.

So it can maintain 1 day inventory - now this is what now call JIT.  It was revolutionary at the time, and was enabled/enhanced by information technologies.  The companies invented this architecture knows what is IT.  How many CIOs have done anything remotely similar to such innovation?

Next we will talk about
  • out sourcing

1 comment:

Caroline Liu said...

I believe that IT is bridge between technology and business , to promote business, and help to achieve strategy goal.