Getting IT to Think Business
When it comes to improving a company's bottom line, executives need to think about leveraging IT as no longer serving a technical function but more as a business one to create new revenue streams and not just to reduce costs, according to David Senf, manager of Canadian application development and infrastructure software with IDC Canada.
"What is interesting is in the [past], the number one business priority was productivity but that is way down this year. Areas that were up include being able to better serve customers and being able to reach out to partners and suppliers so organizations are looking less internally and increasingly externally," he said.
The IDC analyst added that in order for companies to look externally, they need to start investing in a service-oriented architecture (SOA) to better understand what customers want and need as well as using business intelligence to have better access to data.
Senf was one of the panelists at a Microsoft-sponsored roundtable that discussed the use of strategic investments in enterprise software to significantly impact business. The panel focused on the benefits of companies investing in BI and SOA in order to improve how companies can tightly integrate IT and business.
"Business decision makers often have a more heightened understanding or belief in the value of SOA than the IT department does from a business context," said Senf.
However, Kelly Lautt, business intelligence practice leader with Habanero Consulting Group, a Vancouver-based Web design and custom application and integration company, said that businesses have not had a really good sense that they are the one that has to drive IT.
"This is a fairly new approach," she said. "It has been rare for IT solution partners to go into the business side of things," she said.
Lautt stressed that companies have to start thinking IT in this new way and working with partners like Habanero so that there is integration and access to data in order to fulfill business requirements instead of half-hazardously putting in IT solutions, which Lautt said traditionally fail if they aren't driven by business requirements.
"BI establishes business drivers that are required for [companies] to know how information can give proper business solutions that will improve business," she said.
Nelio Lucas, chief technology officer with Adastra Corporation, a provider of business intelligence solutions, added that BI implementations often fail because companies aren't realizing an immediate return on investment. One tip that he offered is to start with smaller BI projects that will deliver immediate quantifiable results. As well, he said companies need to take an enterprise view when it comes to implementing BI instead of a department view. Also, data quality is important to a successful BI implementation.
"Once you have a data quality management framework (around data governance and stewardship) it will go a long way in establishing credibility for a BI solution especially at a time where more and more organizations are trying to meet regulatory compliance requirements," said Lucas.
In order for companies to achieve its vision of tight integration between technology and business, David McJannet, senior product manager of SQL server with Microsoft Canada, said that there are four technology capabilities that need to be in place and BI is one of them.
Senf added that what underlies SOA is BI. According to IDC numbers, about 25 per cent of organizations in Canada are piloting broad adoption of SOA with 11 per cent planning on deploying it this year. McJannet said that SOA needs to be in place to build a composite application out of component parts in order to pull data from one system to another system and automate the flow of data across those systems.
As well, the IDC analyst noted that BI will have a compound annual growth rate of eight per cent by 2010.
"We are seeing high levels of adoption [of BI] because BI is starting to move from a domain of experts within an organization to being more democratize where more people have access to better information and that is spreading from large organizations to smaller ones," Senf said.
Data management capability is also important in helping IT and business come together. This lets companies manage data in a consistent and centralize way.
"We are having volumes of data being created in organizations around the world that people are turning to technology in order to better manage it," said McJannet. "That data management capability is essential to be able to deliver that tightening with IT," he added.
The third key factor in integrating technology and business is the development of applications that lets companies better maximize its market share. Finally, McJannet said that user experience needs to be taken into consideration.
"The last thing I want to do is build these great applications and not have end-users use them because they are not easily consumed in the environments they are accustomed to," he added.
If companies develop its applications around the above pillars, said McJannet, then organizations should be able to realize how IT investments can significantly impact business in order for technology to become key business participants.