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Upgrading systems: There must be room for growth
Dan Ilett, Financial Times, 18 October
You have emptied your wallet on some shiny, new technology. The vendor said it would meet all the needs of the business and make your existing processes faster and more efficient.
But one year later, you realise the money was spent on a system that does nothing more than meet last year’s business needs. To get any more mileage out of it, more money needs to be spent.
"The biggest mistake that was ever made was when paper documents were just dumped on to a machine and people started to work that way without thinking about why," says Professor Peter Cochrane, BT’s former chief technology officer.
He explains: "That was a really good chance to get rid of forms, faxes and old ways of working. There’s a lot of technology out there that lets you get rid of the old stuff."
Business change can be tricky at the best of times, but how do you manage that with an IT system? Should the IT system change too? Or should you simply match it to current business requirements and sit tight until you need something more?
Richard Warley, international managing director for managed services company Savvis, says: "Change should be business-led but it should be the job of the IT department to tailor it and be creative.
"A lot of businesses have got into trouble because they don’t make changes. People get scared - every time you change, you risk something going wrong. Of course there is potential for that, but you learn to drive out potential problems - lots of small changes are better than one big one."
Because the pace of change is so fast in the IT industry, some technical folk admit it can be tempting for businesses to surround themselves with the latest gadgets, yet they fail to predict the future business model.
"Few financial services institutions have achieved any understanding of how to exploit IT to deliver business success," says Richard Baker, managing director of Sovereign Business Integration. "It’s only by identifying the way in which each technology can solve a specific business problem or deliver value that a company can assess an appropriate level of spend - or whether to spend at all."
However, other industries appear to have overcome the hurdle of using IT for the sake of it. EasyJet, the no-frills airline, has shifted its business from offering flights with a few additional services to a company that now provides hotel and car-hire services, too.
Andy Caddy, head of IT at EasyJet, says even though the company started online, business should always be the main focus for change in the company - not IT.
"Our philosophy is that IT should not be a limiting factor - the way of delivering products should never be limited by the systems they exist on," he says.
"As an international company, we should not be doing stuff that is technically interesting, we should be doing stuff that is interesting from a business point of view. We’re an e-commerce company that happens to fly aeroplanes."
System patching, network support and fault resolution mean that people are changing IT systems on a daily basis. As well as this, external issues with IT, such as the millennium bug seven years ago or today’s issues with compliance regulations, have meant more updates.
But IT vendors insist that while there are enormous tasks ahead for companies to keep up with such matters, opportunities for business improvements can also be found.
"At the moment there’s a great opportunity to look at the business in terms of access control and ID management with all the compliance implementations people are doing," says Jason Hart, chief executive for Cryptocard Europe.
"Because you are putting all the logging and financial controls in, you can also tell who’s doing what and when they are doing it. I’d say it’s better to think about that now while there’s change afoot, rather than in eight months time when you’ve already made a load of changes."
Vendors who have sold on fear, uncertainty and doubt have certainly had some success in influencing change. Seven years ago, the IT industry was rife with doubt over whether computers would still work after midnight on December 31 1999. There were none of the meltdowns threatened by the Y2K bug.
But even so, Paul Stevens, the former CIO of Barclays Capital, says that upgrades to IT systems because of those threats were well overdue and have helped companies in the financial world move on.
"There was a certain amount of hype around that, but there were mountains of things that could have gone wrong - huge numbers of systems that wouldn’t have worked," says Mr Stevens, now head of asset management division at systems firm Catalyst.
"All change should be business-led," he adds. "But there needs to be a pragmatic approach - the technology available may not fit, so there’s a need to see the opportunity - the two are symbiotic."