IT Strategy, Business Initiatives & Data Automation

My good friend Harold “Bud” Boughton wrote an article (ABA Banking Journal, February 2008 edition, pages 52-53) entitled, “Does Core Really Matter?”.   In the article, Bud refers to a Harvard Business Review article by Nicholas Carr entitled, “IT Doesn’t Matter.” 

The article’s theme was that information technology had become a commodity and that scarcity, not ubiquity makes a business resource truly strategic.   Bud goes on to makes some very good points. 

He says that many (banking) core applications are under utilized often times leading management to initiate a search for an alternative better solution when all that really needs to be done is to discover how to better use what they already have. 

Further, he labors the point that when searching for a new or replacement core application, the proper objective is to look for the “right” application for your operation. 

And in summary, Bud encourages community banks to really understand the functional capabilities of their core systems, to hold their vendors accountable for good training and subordinate core systems to business mission, focus, vision and culture (staff).

Bud certainly has the experience and the pedigree in banking software to deserve a listening ear.  And as a friend and a mentor I am always interested in what he has to say.  But if Bud will allow me a personal privilege, I think Bud merely nibbles at the edge of the issue:  IT, core,  et al has become less of a strategic business advantage due to IT professionals and vendors focusing on IT tactics while failing to realize their strategic role in the larger business process. 

IT is but one of the five major functions of any business.  To the extent that the IT function understands and is supportive of FINANCE, HUMAN RESOURCES, OPERATIONS, and SALES it is a valuable and strategic part of the business.  When it does not integrate and support the other critical business areas it becomes a mere utility that usually over-promises and under-delivers.

Not convinced?  Consider the dot coms of the nineties.  An almost giddy preoccupation with technology and little concern for the other four disciplines of business nearly took down the stock market.

As a career IT person, I will own up to my contributions to this diminishing role of IT.  Information is not power… applied information is power.   As IT executives, we would do very well to remember that. 

Databases, data capture, transaction and reporting systems are great. But they are not a strategic business advantage (strategy has to with the WHATs and WHYs – tactics have to do with the WHO, WHEN, HOW and WHERE) until they provide cogent and timely information to

1. service customers
2. support sales
3. empower staff
4. support strategic business financial initiatives – thus helping to boost business value.

The CIOs we encounter marketing our Foxtrot data migration and management solutions (www.enablesoft.com)  are almost always rising stars in their companies for a simple reason. They understand that their business can’t wait for the nirvana event when all the core data is integrated with the ancillary systems – and they respond to the demand of business initiatives by empowering knowledge workers with powerful middleware to “bridge the gap”. 

It is those CIOs whose seat at the board table will always be confirmed and who one day may be the chief executive.  

Don’t you want to be like them?

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