Business process changes should be made with the collaboration of IT, line managers and the executive team -- as...
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any of these types of changes can affect the company's strategy. However, many executives today don't realize the importance of partnering with IT in business process planning.
Who says IT doesn't matter?
A few years ago, The Harvard Business Review published an article suggesting that IT was no longer strategic. IT was now ubiquitous, the article argued, and every company has access to such technology. IT, therefore, could not be a competitive differentiator. Executives shouldn't waste time on IT, just leave the work to IT professionals, the article went on to argue.
Several of us who work in the area of IT management and strategy shouted "Wrong!" because it was dangerous advice. IT is more strategic than ever. It is the ubiquity of information technology that now allows a company to change its business processes, radically.
These differentiating applications were designed by teams of IT and line managers, with executive direction. Smart companies recognize that it is the combination of IT and business process change that can be strategic. By using IT together with well-designed business processes, a company can enhance the value of the product it delivers to its customers and how that value is delivered -- in very distinctive and strategic ways.
That is the fundamental reason why corporate executives must stay engaged in IT and business process decisions. These decisions are critical to implementing corporate strategy.
Current state of business process design
But here is the IT and business process design scenario that I often see: A corporate executive decides that the company needs to get products out of its warehouse -- or the warehouses of its suppliers -- and into the hands of customers faster. Ten-day delivery has become noncompetitive in the industry; next-day delivery is required. And the order-fulfillment work needs to be done at a lower cost. The executive appoints a design team consisting of IT professionals and a line manager, including a couple of logistics managers. The team is then left to its own devices to "solve the problem."
What happens next is that the IT professionals immediately begin looking at software packages; the line managers slip into thinking about incremental operating changes, rather than radical changes; and the logistics managers start arguing that every district and warehouse is different and requires modified systems and processes. And there is no adult leadership present to stop the debate and make hard decisions.
Without active executive leadership, your company can expect the following to happen when IT and business process decisions must be made together:
- The change is seen as a technology change, and the degree of business process change is ignored until it is too late -- too late to ask the right questions about the process (vs. IT ) design; too late to engage and train line workers in the process change; and too late to consider an intelligent roadmap for implementation. This results in time delays and cost overruns.
- Design decisions get comprised and there is a lack of standardization. In order to settle arguments, a team will just make compromises and not make hard decisions. Companies now require more IT and business processes standardization to operate, especially when connecting electronically with customers and suppliers. But people within a company do not come to standardization decisions naturally. They prefer to think what they do is unique.
- The technology and business solution lack vision. Ambition and vision usually come from the top of a company. These visions must be hard and substantive, and direct design teams to what must be accomplished for a company to remain competitive. In the scenario I describe above, an executive must make clear that next-day delivery is required for all company locations, and no other result is acceptable.
Up to now, most companies have operated with the belief that it's just executive support that's required for IT and process initiatives. I'm arguing that these initiatives require more than that. They require executives to be on the job, knowledgeable about what's going on and the choices that need to be made -- present to make those choices when the design team falters or gets bogged down in debate. This is hard work for everyone, and executives who ignore this work put the implementation of corporate strategy at risk.
James Champy is chairman of Perot Systems Corp.'s consulting practice and head of strategy for the company. He is also the author of the best-selling books Reengineering the Corporation, Reengineering Management, The Arc of Ambition and X-Engineering the Corporation.