Tuesday, August 06, 2013

Sweating IT assets for competitive advantage - The emergence of social network transaction/decision processing

Enhancing capabilities of IT architecture and business processes to catch up with competition  or go ahead of them now happens in a reasonably structured manner in most IT organisations. Most have outsourced the management of IT and/or BPO services to deliver the stream of enhancements and subsequently support the enhanced IT architecture and business processes. The focus of CIO's and the senior team is on the process of identifying new capabilities to drive competitive advantage.

There is nothing wrong with constantly searching for the right value-adding needle in the constantly increasing hay-stack of possible capabilities unleashed by each new technological innovation. No one can afford to not do it.

But do IT departments sweat existing IT assets adequately? While the grand new shiny break-through innovation is being conceptualised, built, tested, fine-tuned, are IT organisations squeezing full value from their existing IT portfolios? The measure that IT departments use for whether they are doing this are the number of tickets in their support service. The assumption is that if the number of tickets is low, then the IT architecture is stable and IT need not do more. This assumption is wrong.

Should'nt the real measure be whether all the capabilities provided by the IT architecture being used as they were intended? The specific business scenario occurring at a given moment is intended to be serviced by usage of a specific capabilities of the IT architecture. But users/partners intentionally or unintentionally do not use those specific capabilities correctly. Mature IT organisations handle this problem better than immature ones sweating their IT assets more.

Mature IT departments can be identified by their answers to the following questions.

1. Does IT have any per user report, which tells it whether that user used the right capability for the right scenario each time? IT is responsible for ensuring that the system is used as intended/designed. IT architectures need to be designed to generate this data more easily.

2. What tools does IT have to identify mistakes by users, so that the cause of those mistakes can be studied as a source of learning to design better enhancements, innovations or selection/training programmes?

When the mistake is critical and/or large, it tends to get identified and addressed through the support service. But what about small mistakes? What are the systems and processes by which such mistakes are identified and cured? Most IT audit practices are weak. It is surprising that regulators have not taken them to task yet. I guess we await a few high profile failures. The whole issue is whether correctness is adequate for sustenance of business or whether accuracy is mandatory for survival. Not failing spectacularly does not mean that everything is alright. The business may  be making less money than it might if it avoided the mistakes.

3. What are the tools to identify the comparative performance of users as a source of learning to design better enhancements, innovations or selection/training/compensation programmes?

4.  Does IT do any retrospective analysis of 
a. Whether New unanticipated business scenarios are being encountered more and more frequently
b. What would have been the BEST way of dealing with a given customer interaction? Did the user use that way? If not why not?
c. Which are the better users and which are not, so that this objective measure can feed into performance evaluation and variable compensation?
d. How much money was lost due to mistakes by users/partners at the operating level
e. How much money was lost due to strategic decision errors due to using erroneous data

The emergence of social software has given a new dimension to the problem of sweating IT assets for competitive advantage. The excessive focus on single-user transaction processing and single-user decision making in current business processes can change to multi-user transaction processing and multi-user decision making due to social software. The possibility  of using all the knowledge and human capability in the organisation at each customer/partner interaction point can help in further sweating the existing IT assets if enabled in a new "Loose" IT framework built on the top of enterprise social networking technology.

The problem that IT now has to solve is
1. At the point of customer/partner interaction, make all the relevant information, transaction-capability, decision-support-capability available from across the entire IT architecture.
2. At each point of customer/partner interaction, identify the right people from the whole organisation and enable them to collaborate effectively between themselves and the customer/partner to ensure that maximum value is generated in the minimum time

There is now a need for "loose" IT systems framework, such that
1. A social network can be quickly setup per customer interaction containing the right resources available at that time
2. The user interface of the client-facing node should be replicated to other nodes and different nodes should control different portions of the UI with the IT systems framework and/or the client-facing node orchestrating the collaboration to analyse the entire organisational information, process the transaction and make the relevant decision.
3. The days of assuming that all logic can be identified in advance and coded in front-middle-back tiers of IT components to validate and process user input using only a limited intelligence from the customer-facing individual and no participation from other humans who could be available at that time are fast going away.
4. Nothing prevents multiple enterprise staff to engage with client simultaneously as long as the business process and IT system support this. One underwriter is anyway supported by multiple support staff. Once trader is anyway supported by multiple staff. The days of one superman making a decision and explaining/justifying to others later are gone. Teams can be made accountable along with individuals. Customer tolerance of gaps between different elements of the organisation is falling. Customers (due to the Google and Amazon effect) expect you to not have gaps in your understanding of them.

So even if the fundamental capabilities of the IT architecture does not change, the business process can be carved up differently using social software technology as the base to sweat the IT architecture using the most appropriate team. I am not aware of any company doing this yet.

Like I envisaged web-services before they acquired that name, I am sure I am right this time too. I was  not able to leverage my crystal ball gazing skills to benefit myself last time. I hope this time is different. In any case, I am going to date this article explicitly to see how ahead of time I  am this time.

6th August 2013

Pratap Tambay
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