Organisations have gorged on lavish IT banquets and they can’t take another byte: Marc Silvester, CEO at Silxo, says it’s time they changed their eating habits – for a diet that’s easier on corporate digestion, the pocket and long-term health prospects
The IT menu in today’s large organisations is far from inspiring. Enterprise solutions and services are expensive to buy and run, slow to hit the ground, and often unfit for purpose by the time they debut. It can take three years or more to investigate, describe, justify, commission, build, implement, test and launch an IT solution.
Organisations must swallow typical costs of £1 million to £5 million every time. Meanwhile, the business adapts to market and regulatory changes within weeks and months. Technologies – and the skills needed to exploit them – evolve.
Something’s got to give. Businesses chafe at being locked into ageing large-scale solutions and long-term commercial agreements. They recognise the risk of key roles resting with third parties, advisors and non-IT business units. IT becomes seen as a brake on the business rather than an enabler. Corporate memory reminds everyone of those past IT projects which failed, didn’t deliver the promised benefits, arrived late and nearly killed the business.
Understandably, the appetite for sponsoring large-scale IT change has waned. The case for change is difficult to construct, justify and assure. Seasoned IT leaders may be wary of risking their reputations again, while emerging leaders have limited enterprise-scale experience. Third-party service providers have booked their profits, reduced their costs and optimised their services – so change isn’t good for them unless it comes with a significant contract extension or dedicated funding to make technology work.
Hungry for change
This means that established organisations find it impossible to reconfigure the business to remain relevant and competitive. Crucial roles, responsibilities and activities in IT and data continue to disperse within the organisation and into external parties. This is especially problematic because the ongoing evolution of corporate and personal risk, compliance and regulation drives responsibility for data and security back into the boardroom.
It’s clear that traditional approaches to IT solutions, services and third-party delivery models are blocking innovation, creating greater complexity and driving up costs while delivering no advantage. Businesses are lumbered with solutions that are out of date, solve historic problems and hinder progress. Sources of new value, market insight and client relevance are locked within impenetrable data islands. Service providers continue to maintain a decreasing estate of outdated client solutions. Future business success is obscured by layers of technology, masses of service contracts and a general loss of appetite for risking change.
Big questions – small answers
In order to break the deadlock, organisations need a change of mind-set. It’s time to jettison the idea that IT solutions and services must be big, comprehensive and the last word in functionality. Instead, we need simple, affordable IT solutions that are good enough for specific tasks and make technology work. IT strategy should proceed from a short list of basic tasks required to operate the business. The key value-add of IT must be a robust and reliable method of both recognising and replacing each task on the list. The fundamental operating ethos of the business must be a dedication to the constant optimisation of its tasks.
How does this recipe play out? It means gearing IT to deliver temporary solutions with a defined shelf-life – call them micro-answers. The business defines how long a solution needs to deliver value. Business and IT collaborate in a continuous process of reviewing shelf-life and value delivered. There’s a positive, deliberate activity to retire poor and end-of-life solutions. The funding model enables ongoing delivery of micro-answer replenishments.
Browsing the Fresh IT aisle
We call this approach Fresh IT, based on an analogy with fresh produce. All fresh food items have a limited shelf-life during which they can be delivered to stores and purchased. Customers buy fresh food items with a specific purpose in mind – maybe to cook tonight’s family meal, or to prepare something special for a party. Purchases depend on an ever-changing mix of needs related to occasions, affordability and appetite. A customer might choose food items to prepare a dish for freezing or canning and that dish will also have its own effective shelf-life.
The old way of doing IT could be called Formal IT. Here, every meal is a lengthy, stodgy banquet. Banquets need impressive facilities, experienced staff, professional kitchens, signature recipes, memorable entertainment, obsessive attention to detail and intense orchestration. With all management focus on the next big event, it’s hard to see that attendance is reducing, tastes are changing, costs are growing and yet quality has disappeared.
The buffet is open
We believe IT solutions should be cut down to size. Each solution should solve only a specific, identified challenge and only for as long as the answer produces results. In our view this is no longer than 24 months. At Silxo we advise our enterprise clients to never spend more than £500,000 or nine months on a solution, or make detailed plans beyond six months. It’s a new diet and it works.
Great value can be created and delivered if you focus on your meal, your occasion and your shelf-life. It’s time for business leaders to simplify, focus and demand the right meal for the right time with the right people.