Thursday, February 18, 2010

Evolution of Technology and the Technology Leader’s role in the Enterprise

As your career develops what is being expected of you as a technology leader?

By Trish Sutter, PMP

It is not too much of a stretch to expect today’s technology leaders to understand the core competencies of their enterprise and maximize its’ value to the organization through technology. The Technology leaders must be technologically agnostic, Business Process Engineers and excellent Project Managers.

Data Processing
In the seventies and early eighties, the computer department was born to speed up the corporate accounting processes. Massive amounts of data were keypunched onto keypunch cards and read into computer programs and processed and tabulated in a single threaded batch environment. What was done manually by legions of clerks in the past was performed in a fraction of the time, with a lot less manpower. It saved money in terms of head count for the companies that used it. The computer department was known as “Data Processing” and in most companies was another branch of Finance and Accounting and was led by the Controller. The challenge was the limitations of the technology because it was slow and cumbersome. The objectives of the technology were clearly defined. Just take those labor intensive tasks and automate them.

Management Information Systems
Then sometime in the eighties, the corporate computer department evolved to “Management Information Systems”. The expectations from the technology department grew with the capabilities of the systems. The keypunch card was replaced with the green screen computer terminal. Clerks entered data directly into online transaction programs. Some saved the data to process in batch later, others processed each transaction on the spot. The computer department still reported to the Chief Financial Officer(CFO) of the company and the functions were still primarily accounting in nature.

Technology was new, processes were immature.

The expectations from the technology department grew as the capabilities of the hardware grew. The projects that were undertaken grew in scope as well. But the ability of the technologist to manage their own development processes did not mature at the same rate as the capabilities of the technology. I recall a now retired CEO’s comments about technology, that he could never get what he needed from his computer department. He would ask for a new report and 6 months or a year later, he might get it. By that time, any strategic decision the report was needed for had already been made.

Information Technology
With the advent of email and the internet, the computer department evolved again into “Information Technology”. During this time, we have seen the demise of the great age of industrialization and the birth of the age of information. The PC has become the standard business tool for knowledge workers. No longer are computer services reserved strictly for management but all knowledge workers. The PC and desktop printer replaced typewriters. Email replaced fax and paper interoffice memos. But many systems remained discreet.
Greater things were attempted and in many cases failed. Project Management skills had not developed to manage the implementation of technology.

So as technology evolved, justifying technology became more difficult depending upon the technical savvy of your CFO/CEO and Board of Directors (BoD), because of the overwhelming failures that were prevalent with the lack of good project management skills. Software companies, developed Enterprise Resource Systems for companies. The all-in-one software package that did everything for the company from accounting to manufacturing. Unfortunately failed ERP implementations hit the news in the late '90s and early part of this century when they severely impacted major company's' bottom lines. And in some cases even put the companies into bankruptcy. Here are some of the more famous ERP failures:
  • Hershey's 1999
  • Whirlpool 1999
  • Invacare
  • Allied Waste Industries
  • W.L. Gore & Assocaites 1997
  • National Austrailian Bank 2004
  • US Navy 2005
  • Waste Management 2007
Project Management for managing technology design and implementation processes was born from these disasters.

2008 - Business Technology arrives
No longer does the technology department report to the CFO. It does not make financial sense. The leaders today recognize that technology, while not a driver for business, is certainly a mission critical asset to any corporation. It is well known that the right technology brings a competitive advantage to the company employing it. This next evolution we are witnessing is the Technology department evolving to become “Business Technology”. The purpose now is to align technology with the business and support the business.

The Chief Technology Officer (CTO) must be aware of all the processes and needs of the organization and must be able to distinguish the unique product of the organization and use the technology systems to give the organization a competitive technical advantage in the delivery of their product. The technology department, has to be process engineers as well as technologists.

It is expensive to automate a bad process.  

Customizable off the shelf applications are the norm. Most business functions are pretty standard. Accounting, HR, Purchasing, Logistics, Manufacturing, CRM, Distribution.... Why reinvent the wheel? Technologists know that 1 ERP system is not going to be the end all for their companies. They know they still have to understand the business process in order to implement it well. The key now is to have the right mix of applications and to tune these applications to the business needs.

As computer services become standardized these application providers truly compete in a world market. Applications are becoming more and more off-the-shelf as all businesses strive to streamline and conform to government requirements and best practice in order to reduce costs and maximize profits. Application integration standardization is critical. The consumer companies benefit through lower costs. The leaders of business technology will be responsible for finding the best deal and aligning these services with the business functions.

So where does Project Management fit in today? 

The value the leader for business technology will bring to the enterprise is understanding the core competencies of the business and differentiating those competencies of their company’s business and tailoring technology to further enhance the competitive advantage the core competencies bring. The technologist will develop the vision, and it falls to the technologist to implement the vision. The technologists will have to be technically agnostic in order to find the best mix for their enterprise. Delivery is critical to company’s enjoying the competitive advantage that technology brings. Project management skills will bring these ideas to fruition. A sound Project Management process ensures all of the above, from understanding the businesses core competencies through delivery. 

Armada Business Consulting, Inc.

Need help getting from strategy to execution?  I can help.  For more information contact Trish at