The foundation of e-business
Infrastructure\n 1.: the underlying foundation or basic framework (as of a system of organization).
All modern business organizations have information technology (IT) infrastructures in place, and most have many. The real issue is how many have true enterprise-wide IT infrastructures in place that are capable of enabling the virtual enterprise of the future? Clearly, this is a prerequisite to participating in the new e-economy. Further, what are the barriers to creating such an infrastructure?
Unfortunately, many corporations seem to have substituted serendipity, intramural politics, and unguided evolution for clear-headed thinking in the creation of IT infrastructure. Such neglect results in a collection of competing infrastructures, which create islands of information. These are often difficult and expensive to maintain, and they do not provide an adequate technology foundation for the future of the enterprise.
Why do businesses find themselves in this pre-dicament? There are obviously as many reasons as there are companies, but there are three common ones, which, in aggregate, account for probably 80% of the situations.
UNEXAMINED DECENTRALIZATION. Most large corporations with diverse businesses have historically operated in a decentralized mode, putting decision making as close to the customer and manufacturing operations as possible. Corpor-ations consciously de-leveraged themselves in many business functions, making the classic trade-off of effectiveness for efficiency. The net pickup in performance through greater customer intimacy and quicker decision making was well worth that tradeoff. However, many of these organizations adopted this style before the advent of IT, or certainly before the power of IT as we know it today.
The power of modern technology has enabled this span of control to be re-examined. It is more critical than ever to have quick, customer-responsive, and decentralized decision-making. However, many of the functions that do not directly touch the customer, such as finance, purchasing, human resources, etc., are now being re-centralized into virtual organizations. While many of these new organizations are not physically centralized, they share common processes and systems that allow the enterprise to re-leverage itself and become more efficient without sacrificing effectiveness.
The problem is that the IT infrastructure of some organizations hasn't gone through this same re-examination, but the irony is that the virtual organization described above demands it. In many of these organizations, the view is that divisional unique business requirements must drive divisional unique infrastructure. This may have been true some years ago, but it no longer is since technology has become more open. Witness the Internet.
APPLICATIONS DRIVING INFRASTRUCTURE. Another sure way to end up in the muck and the mire is to let individual best-of-breed applications drive infrastructure. The progression goes something like this: There is a business problem to solve, and a team is empowered to find the "best software out there"to solve it without any restraints pertaining to the technology platforms it must run on. This results in individual business units ending up with multiple infrastructures to support. The corporate software and hardware portfolio becomes a who¹s who of the IT industry.
ENTERPRISE INFRASTRUCTURE: TOO EXPENSIVE? Given the mess that many companies are faced with, and the equally daunting task they would face if they were to step up to fix it, the perception of "too expensive"becomes an easy excuse to continue past bad practices.
A very successful insurance salesman used to have a sales pitch that, in part, said "doing nothing costs something. Doing something costs something. Quite often the cost of doing nothing is far greater than the cost of doing something!" The problem with infrastructure is that the cost of doing nothing is rarely known, since it tends to be invisible cost buried in every line item of the P&L, whereas the cost of doing something is measured with accounting certainty.
The reality is that companies can build something strategic (like enterprise-wide infrastructure) that will enable the deployment of new business models that were not options in the past. This could reap significant savings in operating costs. Companies who have not invested in enterprise infrastructure need to be on a quick path to developing one, for the cost of doing nothing, both in terms of cost savings and missed business opportunities, is far too great.
Technology is usually never the real issue. The real issue most always is unchallenged organizational beliefs. These need to be re-examined in light of rapidly changing circumstances.
|
