By Feroz Merchhiya
Chief Technology Officer
Director of Technology
California Insurance Guarantee Association
Technology is at the heart of every business, large or small, nowadays. Technology is what drives profitability in a company. In fact, embracing current technologies has the potential to mean the difference between the success and failure of a company. Many companies, some of the largest out there, have lost a substantial amount of growth over the years simply because they have not adapted as quickly as they should have done to technological changes. As an IT Leader, one of your main roles will be to steer the technological innovation of a company in the right direction.
From Social, Mobile and Cloud to Converged and Hyper-converged
infrastructure, technology over the last few years has changed at a rapid pace.
Technology which may have been ‘all of the rage’ a year ago is most likely
going to be ‘old hat’ now. One of your aims as an IT Leader, and probably where
you will spend the bulk of your time, will be keeping an eye on the
technological landscape. You will want to see which technologies may benefit
your business and look to implement them as quickly as possible.
The heavy reliance on technology for a company has made it
difficult to plan. In the past, you were praised if you came up with a robust annual
plan. This is not possible nowadays. Some industries are looking at huge
changes every couple of months, sometimes even less, and the last thing a
company wants to do is have an annual plan in place which simply can’t be
changed. As mentioned previously, plenty of companies out there have lost huge amounts of profit because they did
not adapt quickly enough. This is, mostly at least, due to the fact that they
did not allow themselves to do so. Their processes were too set in stone. They
were not willing to adapt to change and their company fell by the wayside. As an
IT Leader, you have a responsibility to ensure that this does not happen to
your company.
An IT leader, nowadays, needs to take a ‘hands on’ approach
when it comes to technology. They need to implement processes which will enable
them to analyze how the business is performing on a technological front and
whether there is any possibility for change. If there is, the IT leader needs
to determine whether that change is the right one to make, and if it is, how to
implement that change in the quickest and least-disruptive manner possible. It
is difficult. An IT leader, no matter how good they are at their job, who fails
on change management front, will be letting down the business that they work
for.
It can’t be stressed enough just how important the analysis
of technology is. Some companies in the past, FoxMeyer Drug being one of the
first that springs to mind, jumped on the ‘change bandwagon’ a little bit too
hastily. They invested $100 million into an IT project. While this is a huge
amount by today’s standards, it was an even heftier amount back in 1997. They
thought that it would help them take their company forward. Guess what? They
went bankrupt shortly afterwards. Now, the project they tried to implement was
terrible because of various reasons which included a lack of upfront analysis, project execution
and change management.
However, 1997 saw the start of an age where companies began to shift towards an increased use in technology and FoxMeyer Drug wanted to be the first one there. It didn’t work.
However, 1997 saw the start of an age where companies began to shift towards an increased use in technology and FoxMeyer Drug wanted to be the first one there. It didn’t work.
Careful analysis does work. The implantation of new IT
systems can have a positive impact on business. RFID technology has become huge over the past few years. Companies
which have embraced it in the correct manner have earned the expected value.
Companies which invested in RFID just for the sake of investing have lost
money.
A good demonstration of the reasoned approach is Disney
Resorts, part of the Disney corporation. They have spent close to a billion
dollars on the implementation of RFID technology in their parks, which was
rolled out in 2008. They have not implemented RFID technology for the sake of
it. They have implemented it because it will deliver the value to both Disney
and their guests. The point I am trying to get across here is that you need to implement change because it can
make a difference, not implement it because you want to keep up with trends. If
a technology will not have a positive impact on a business, there is no sense
implementing it.
A more recent example of careful analysis and the implementation
of change, more specifically within IT, is PayPal’s adoption of OpenStack
Cloud. PayPal has completed a three-year migration and complete revamp of their
data center infrastructure including multiple upgrade of OpenStack while going
through this change. Sri Shivananda, VP
for Global Platform and infrastructure was quoted in InformationWeek saying, “the
OpenStack transition wasn't only a move to a more automated infrastructure. It
was an internal cultural change as well, the change undertaken by the IT staff goes
well beyond server provisioning,” It was a change in thoperating paradigm from a traditional
manual-build-on-demand model to a multi-tenant private cloud infrastructure
with end-to-end automation.
Recent studies and a study back in 2005 revealed that IT
Leaders seemed to not be doing enough on analysis and change management. This study
carried out by CSC, an IT Consultancy, interviewed 782 IT Leaders. More than
half of them felt that it was difficult implementing technology. The most
startling figure however was that only 10% believed that the IT project that
they were responsible for was actually a success. Again, this could
potentially, demonstrate that some companies are a little bit too hasty when it
comes to implementing change.
As mentioned previously, change can be a good thing. Innovation
and disruption are recurring themes in technology related conversations. Right
change is what drives the profitability of a company. A company which is
hesitant to change is a company which won’t be in existence for all that long.
However, an IT leader needs to strike a careful balance. They need to adapt by
all means. This is essential. However, they should not adapt without taking a
disciplined approach to the impact on the business. They need to see if the
change will be cost-effective and whether it will drive up profitability or
drive down cost. It is not just profits that they need to look at either. The IT
leader needs to analyze whether the employees can deal with the change.
Remember, if you are changing processes on an almost continual basis, staff
will become stressed, they won’t know how things work, they will be in a
perpetual state of change, and business will suffer. Too little change is bad.
Too much change is bad. It is quite a balancing act.
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