Many corporations are daunted by the challenges of integrating their technology infrastructures with their business processes. They are fearful of trying to knit together multiple legacy applications with manual and, in many cases, outdated business processes, and they are limited by outmoded IT infrastructures and, worse yet, inflexible IT governance models within their organizations.
Often, organizations find it difficult to stay the course for the long term. They tend to misjudge these efforts as primarily IT projects and fail to require the participation of the business beneficiaries who really should be leading these efforts.
In the end, however, the benefits are worth the risks. The benefits include reduced costs through more-efficient business processes, reduced operational risk, improved data quality, improved employee morale, reduced time to market for application development and, most important, more opportunities to collaborate electronically with your customers for value-added exchanges.
The following four recommendations should give you a fighting chance of success when undertaking an enterprisewide integration project:
1. Align IT with the business strategy.
2. Think strategically; act tactically.
3. Ensure that business managers lead the project.
4. Reengineer processes along with technology changes.
Aligning IT and Business Strategy
IT budgets are a precious resource for any business, and IT spending is critical to driving most businesses forward. It may sound obvious, but start by aligning the IT strategy with your strategic business initiatives. Of course, there will be a need for IT spend driven by the technologist for things like basic IT infrastructure, but make sure that the majority of your IT spend is in support of strategic business initiatives.
This will, of course, require the right corporate governance model. But avoiding the situation where an organization's IT is not in sync with its business strategy will have the key benefit of achieving a high level of support across the organization for the enterprisewide integration effort. This is particularly important for a longer-term strategic project.
For HVB, the key to achieving the alignment of business and IT strategy was the establishment of a Management Committee structure in which the views of the IT function were an integral part of business strategy discussions. As business strategy initiatives were presented and discussed, the technology aspects were considered. Additionally, consideration was given to the resource requirements from all other business support functions as well.
Unfortunately, most CEOs do not have the foresight to include technology as a strategic partner in managing the business. Perhaps it is because the CEO is not comfortable with technology and/or is not certain of the critical role that it can play in driving the business. Still, strategic integration of technology into the business will help firms achieve their business goals more efficiently. It also will ensure that IT clearly understands the business objectives and avoids implementing "technology for technology's sake." Ultimately, it will enhance the probability of successful enterprisewide IT initiatives.
Think Strategically; Act Tactically
Enterprisewide IT integration initiatives undoubtedly can run a larger risk of failure than targeted integration initiatives. Therefore, any enterprisewide project should be broken down into smaller, more manageable pieces.
Resulting small successes tend to build upon themselves. As the successes snowball, support and enthusiasm grow within the organization. As people see beneficial results, they begin to see new ways to apply the technology to further the business goals, and they become more patient for the final results of the integrated architecture platform.
At HVB, we were careful about how we selected which integration initiatives to undertake first. Our first project phase was to integrate the processing for our foreign exchange (FX) business. The importance of selecting this product for integration was twofold. First, the product itself is a fairly plain vanilla process relative to most financial instruments. Second, and more important, the manual nature of our pre-existing processes was limiting our ability to grow the business; from a strategic perspective, the business managers wanted to expand, while the processing limitations prevented this. Therefore, the conditions for success were ripe, and clearly it was manageable and of strategic importance to the business.
From the beginning, my CIO stressed the importance of avoiding technology for technology's sake. A mistake that is made on most integration projects that assures failure is to decide to start the project as a key business initiative and then leave it completely up to IT.