Information technology – what is it good for?

The IT industry is roughly 50 years old. During that period of time it’s experienced many digital transformations. Technology transitions from mainframe computers to client-server architectures to personal PCs and to the Internet, the cloud and the smartphone have been chronicled in depth by many others. We currently find ourselves in another transition involving a host of new technologies such as machine learning, blockchain ledgers, containerized applications, serverless computing, microservices, IoT, etc.

Technology changes all the time and will continue to do so in the future, but has IT’s role in commercial enterprises really changed at all?  Aren’t all of these different technologies simply different means of achieving the same ends? 

The fundamental business objectives of IT investments

IT capabilities are employed to enhance the efficiency and effectiveness of a company’s internal processes and expand the scope of its overall business operations. Regardless of the technologies being employed, IT is invariably used to achieve three fundamental business objectives.

Automate processes

From the dawn of the information technology revolution computing technology has been used to accelerate the execution of tasks and the delivery of information. The first modern computer – known as ENIAC (Electronic Numerical Integrator And Computer) – was developed by two professors at the University of Pennsylvania in 1946. It weighed 50 tons and employed 18,000 vacuum tubes. ENIAC was developed for the US Army and used to calculate artillery firing tables.

Every successive generation of information technology since ENIAC has succeeded in whole or in part because of its ability to perform a wider variety of tasks in much shorter periods of time than human beings. IT eliminates human middleware and produces business information and outcomes that are predictable, consistent and error free.

Democratize data

Most companies are drowning in data. Information technology ensures that the right data is inserted in the right process at the right time to achieve a desired business outcome. For example, accurate billing addresses are required to prepare monthly invoices. Agents responding to calls in a customer support center need information regarding the nature, timing and payment histories of recent purchases to respond effectively to a customer’s questions.

Data also informs tactical and strategic business decisions. Accurate and consistent data is needed to diagnose current business problems and evaluate the potential value of future business initiatives. IT can readily implement systems that acquire new forms of data and enrich existing databases. But its real value lies in transforming data into sensible business information and making information accessible to decision-makers, staff members and external stakeholders on an as needed basis.

Reduce user friction

IT can reduce the technology friction experienced by employees, suppliers and customers in many different ways. It can reduce the number of steps within a transactional process. It can ask a user to validate existing information instead of re-entering the same information a second time. It can reconfigure a customer interface, making it more intuitive and easier to navigate. It can offer the services of a chatbot to assist in locating the information a user is seeking. There are many, many ways in which user interactions with any form of technology can be simplified, streamlined or personalized. Reductions in user friction can improve workforce productivity and also boost sales and customer satisfaction.

How to hit home runs instead of settling for singles

Any technology-based initiative pursued by an IT organization will likely produce benefits along all three of the dimensions referenced above. However, experience has shown that the most impactful initiatives produce transformational results along one key dimension.

For example, transforming a two-week loan origination process into a 10-minute mobile phone transaction will be remembered for the revolutionary difference in process automation that was achieved, even if the mobile interface was frictionless and it supplied consumers with new types of information regarding their credit status.

Alternatively, a new mobile consumer application that boosts online sales and retail store traffic will be remembered for its ease of use, even if the ordering process has been streamlined and new types of information regarding product quality and delivery are being supplied by the app as well. In both of these examples, IT delivered transformational changes in business capabilities. The former initiative achieved those transformational capabilities through process automation and the latter succeeded by reducing end user friction.

Most IT leaders remain technologists at heart and are easily seduced by the allure of new technologies. If they can leverage an emerging technology to achieve one or more of the fundamental objectives referenced above, then it will succeed in becoming an integral component of their technology portfolio. If they can leverage it to produce a transformational change in one of the dimensions listed above, they will have hit a home run!