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Featured articles - ERP for IT
May 4, 2009
In trying to align IT with business goals, organizations often find that IT landscapes consisting of processes, information, technology and people have taken on a life of their own and are not easily managed. Because of this, CIOs find it nearly impossible to answer important questions such as the following:
- What projects do I have running now?
- Which projects are planned?
- What business initiatives and strategy are they in support of?
- Which projects can I kill without adversely impacting my strategic route and progress and how much will I save?
- If I postpone projects, what will happen to my IT strategic roadmap and the business strategy?
- Is my operational budget following the changes in priorities for the business domains?
- Where do I risk providing IT support for business that is based on obsolete or nearly obsolete technologies, skills sets etc?
Enter IT planning, which supports effective and consistent decision-making about how IT should be deployed and managed. IT planning’s raison d’être is to facilitate decision-making. In particular, it provides support for effective decisions and ensures that decision-making is performed in a consistent way suggesting a framework, methodology or process. Let’s consider each of these points separately.
Effective Decisions Are Elusive without Good Planning Abilities
When are decisions made? And what makes them effective? To ensure IT is focusing on the right projects to deliver on business and strategic requirements, IT and business need to come together. Business stakeholders need to properly formulate their requirements instead of demanding specific solutions, e.g. "let’s take CRM system XY" and IT needs a sufficient accurate intelligence upon which to base its decisions. Today IT supports core business processes (indeed, in some industries such as financial services or telecoms, IT is the core business process) improving competitive advantage, decreasing time-to-market, increasing customer value, enhancing the customer experience and empowering workers with information. The application landscape is extremely complex with old technologies entangled with the new. The accelerated pace of business means that necessary changes to business processes due to M&A, new branches, new service and product lines, new IT systems, regulatory requirements and the like, need to be decided upon faster. The decision-making environment is now more complex. It’s an environment that, in addition to dictating speed and technical complexity, has several diverse dimensions: the relationship of business to IT, the relationship within and across business units, the technical relationships among the IT systems, the relationship of operational to strategic plans and the time dimension as the enterprise moves forwards. So how do we ensure that decisions taken will be effective in the face of these challenges?
An effective decision implies that its realization will result in the desired change with tightly controlled risk to the enterprise. It will bring about the desired change because it has taken into account all relevant information. Thus, the decision-maker must have all the relevant information at hand, and it must be current and presented in a consistent format. A good IT planning process can deliver this; it must, though, include comprehensive information on the IT landscape. For too long, IT planning has been an exercise in number-crunching, too shallow in its consideration of the impact to the architecture, forcing parsimonious decisions that are more than shy in achieving desired results. A well-defined planning process supports consistent and fast decision-making
Consistency in Decision-making
Now let’s turn to the second issue: consistency in decision-making. Consistent decision-making requires a defined framework, methodology or, in short, process. So if -- as the above definition prescribes -- IT planning consists of all of the activities that support consistent decision-making, then the IT planning discipline has to be made up of activities performed in a process that is repeatable, has defined responsibilities, has a defined order to the activities and is auditable. To make quality decisions the process should provoke the right questions and supply the information that can support the decision-making.
So Why Is ERP a Must-Have for IT?
Timeliness and inherent consistency of relevant information are critical for decisions quick enough to render the IT agile. Add to this a high degree of automation in the information gathering, compilation and reporting process and we have the recipe for successful decision-making. Business solved this problem for the business side of the enterprise long ago with Enterprise Resource Planning (ERP). ERP brings together the relevant people, processes, tools and information to create an information-based, process-centric information platform on which to base decisions. It stipulates a uniform methodology that is shared across stakeholders -- this is key to collaboration and enablement of decision-making.
No large company today would be able to compete without a strong ERP system that drives and integrates business processes, building and maintaining a high-quality information base for making business decisions. IT planning requires the same approach: a centralized information base that is fed by integrated processes, updated with every plan made and every decision taken. This allows for accurate information to be provided to stakeholders at the time of decision-making.
