Complex IT Will Kill Your Business
Your competitive edge is becoming dull under the weight of your business processes and the technology that underpins them. Here's some advice to help you sharpen up.
CIO — As the business landscape becomes more brutal, two out of three companies will need a new business strategy to stay alive. That's the conclusion of the recent book Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth, by Chris Zook, head of Bain & Co.'s Global Strategy Practice.
However, notes Rudy Puryear who heads IT for Bain in the Americas region, there's a problem: It's hard to create a new business strategy and find new customers when complex IT blocks the way. Puryear, who contributed research to Unstoppable, spoke to Associate Online Editor Diann Daniel about why IT has become too complex and how companies can use data to innovate.
Diann Daniel, CIO: Why do companies have trouble staying competitive?
Rudy Puryear, Bain: First of all, business change continues to accelerate—what I oftentimes call the MTBS, or mean time between surprises, continues to get shorter. In an environment where that happens, the mean time between surprise and response also has to get shorter. A core notion in Unstoppable is that if you look back at Fortune 500 companies over the last couple of decades, a third ended up in bankruptcy, got acquired, or otherwise became integrated into another company. About another third had to fundamentally change their core strategy in order to be successful. Only 28 percent experienced no significant change, compared to the period from 1985 to 1994, when 51 percent of companies were stable. And the survival rate is likely to continue to decrease in the next decade because of the pace of change, because of the difficulty of change. The problem is that a lot of organizations have built unnecessary complexity into their business, and this complexity is beginning to act like reinforced concrete. It's a barrier to change.
The second point relates to IT. In many ways, IT reflects the complexity that's been built into business. Unnecessary complexity in the business has resulted in a lot of unnecessary complexity in IT. That's slowing down the cycle times in IT. The cycle times in IT are increasingly much slower and out of sync with the cycle times required by the business to stay competitive.
Can you give me an example?
A high-tech manufacturing company I've been working with had pushed business autonomy out to its manufacturing plants. It woke up to discover that it had over 25 different manufacturing platforms. Virtually nothing was shared and common from a business or business process standpoint, and therefore it wasn't from an IT standpoint.
