Robust Systems are Built from the Bottom Up

  • Written By: J. Dowling
  • Published: April 3 2000


IT Management Issue

SalesGate.Com lost credit card numbers to a hacker. Hackers put Yahoo, eBay Inc., CNN and others off line. First Security Corporation and Checkfree went live with systems containing software defects that caused revenue shortfalls. Hershey experienced lost sales orders and delayed shipments as did Whirlpool and Volkswagen in a rush to bring their Enterprise Resource Planning Systems on line. ASD Catalogs and Knight Ridder Shared Services had to deal with the proliferation of desktop computer models, configurations, and vendors before they could address business improvement initiatives.

Business Implications

All of the incidents listed above caused companies to waste money. Shareholders lost value from their investments and customers lost revenue or the opportunity to earn revenue. In each incident, people had to spend time doing work that added no value to the business. Investments had been made for people, technology, and information that failed to deliver full value. In some cases, the cause of vulnerability remained for some time following the incident and caused additional and/or premium-priced investments to be made in order to reinforce infrastructure.

In today's marketplace, the buyer is in much more control of who supplies their goods, services, and information. Standardization and other enabling technologies such as e-Procurement brokerages have reduced barriers to entry and lowered resistance to change. When a company fails to deliver or demonstrates a weakness in its ability to deliver, incumbent and prospective customers do reconsider and make changes.

Yes, suppliers will walk away from a customer that poses significant profitability performance risk. Production capacity investments in a volatile marketplace are becoming increasingly risky. Suppliers are compelled to identify and acquire high-value customers and to shed low-value ones in their efforts to achieve predictable and profitable performance. As a supplier, companies must deliver competitively and consistently. As customers, companies must act predictably and profitably. Business interaction models that depend on information technology to demonstrate these desirable attributes must be constructed on a strong foundation .

Architecture Impacts

The information technology infrastructure has three domains that must be managed in concert.

The Technology Domain is comprised of the communications, processing, and data storage systems upon which business applications such as logistics and financial accounting are built. The Process Domain includes planning, management, project-control, systems development, and other processes that are employed by the information technology personnel.

The People Domain includes skills; levels of competence, environment, culture and other factors that determine the ability of human resources to perform work.

Before engaging in an information technology enabled business change, implications of such a change and the systems that will deliver new operational capabilities must be analyzed and supporting infrastructure capabilities must be built into the plan. Only when the total scope of change to people, process, and technology systems is known will the magnitude of the program become apparent. Only then can the risks associated with the program be assessed and mitigated.

Whether or not it is documented, every company has one or more architectures for its people, process and technology systems. Some are structured and organized, others need to be assembled from existing documents and actual configurations. Some persist over time, others are reinvented every time a new need arises. Major business change initiatives demand clear statements of how the business technology systems are put together and how they interact with each other. There are two levels that need to be examined.

Business architecture is a foreign term to many. However, all companies pay for one in the course of a major information system deployment. System configurations and integrators need to "know" how the company runs. How do transactions flow? Who has responsibility for what? How is the company measured? How are products priced? How will each unique customer-type be engaged? These are all questions that will be answered - with or without business management participation because the project must be completed!

Information Technology Infrastructure is the glue that binds business application systems such as an e-Commerce system to an enterprise resource planning system. It consists of the communication networks, processing servers, data storage and integration, and other low-level components. Information Technology Architecture is intended to establish a high-level description of how technical components will form a platform to support application systems that enable business processes. The processes that it supports therefore drive Information Technology Architecture. Because application systems deliver business value and because operating models change, applications that relate directly to core business processes will change over time. Therefore, infrastructure architecture must be designed for a more distant future than applies to the applications that it serves.

It is critical that the Information Technology Architecture that defines the Infrastructure be designed to support immediate and future needs. Otherwise the infrastructure will inhibit business change. It is also critical that information technology infrastructure be capable of adapting to expanded, contracted, and new business needs. Infrastructure that resists change is an impediment to business agility.

An adaptive infrastructure is based on standards to facilitate incorporation of a wide range of applications. It is made up of layers of products such as cable plant, routers, servers, and software tools that can be applied to a wide range of situations and that can expand and contract in capacity without excessive cost impact. It is also made up of people who have the capacity to achieve high levels of competency with new technologies rapidly, and it executes processes that have no inherent delays or waste.

Business Management Response

  1. Build executive consensus around your future business architecture. Use high-level diagrams to show how customers and products are brought together and short vignettes to express the experience that customers will have when the engage the company.

  2. Be sure that every process that is directly or indirectly effected is examined.

  3. Identify and clearly state infrastructure implications of new and changed processes. Consider people, process, and technology.

  4. Ask the question: "Are we sure that we have the infrastructure to plan, build, deploy, and support the new processes and technologies?"

  5. Do not just sponsor the program. Own the responsibility for delivering new operational capabilities and business value.

  6. Accept that the cost justification for infrastructure is based on the value of the business processes and the applications that it supports. Infrastructure expenditures must precede applications and process investments.

  7. Insist that infrastructure investments be supported by an architecture that can be related directly to the delivery of strategic value by linking each project to the operational capability that it enables.

User Recommendations

  1. Build information technology architecture from business architecture that is forward looking and is stated in terms of the capabilities that must exist to realize vision and execute the mission.

  2. Design systems capabilities from the customer in and from business process down to infrastructure.

  3. Build an adaptive infrastructure first, then layer applications and business process onto it.

  4. Be aware of the impact that information technology systems have on business process and people systems, especially those that alter empowerment and individual performance measurement systems.

  5. Own the responsibility for delivering enabling information technology systems and for providing insight to business managers about those technologies to assure productive transitions and maximize value-add.

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