Thursday, August 28, 2003

Good Technology

Over the past two decades, I have been looking at how technology can improve the way organizations perform.

There are some simple lessons that people often lose site of:

1. I once asked Harvey Gellman, the eminent consultant, buyer of the first computer in Canada in 1952, one of the earliest computer consultants and founder of two major IT consulting firms what he had learned in his career about good information technology and management. He preferred the term "information management" as I do.

His coment was, in his typical humble fashion: "Alistair. I've really only learned one thing about what makes good information technology work. If the CEO doen't care, then the company won't get good information management."

Harvey went on to comment that a typical danger sign in a company was when the CIO reported to the CFO. In such situations, the company tended not to get good information management. When a CIO reported to the CEO, things tended to work better.

2. Most information technology does not work very well. Most people are too insecure about their own knowledge to complain. But take it from an expert, most IT is not very good.

3. Information technology, or more generally, information management can be optimized in many different ways. You can optimize for:

- speed of development
- flexibility
- low cost

But it's pretty hard to optimize for all three. So, understanding your purpose is always the most important aspect of getting good results.

4. Technology is very complicated. I have a rule I have developed. "Increased usage trumps standardization" In other words, although standards keep emerging, the rate of computer usage is broadening so fast, you can't be expert in everything. So you need suppliers, packages and services that simplfy your life. Suppliers can descend learning curves faster than you can.

In the 1980s, Imperial Oil Canada (the Canadian sub of Exxon) built its own "spreadsheet". You can't imagine anyone bothering today. It's a metaphor for the evolving use of information technology.

5. Perhaps the most important lesson of all is that there are differences in the way companies use technology. In my own experience, I have found the following rules of thumb:

- in innovative new technologies, companies can often waste between 50 and 90% of their investment
- it can be worth hiring expertise to save this learning curve
- there are in fact some dramatic differences in performance between suppliers, individuals and technologies

So, the challenge in technology is selecting and working with the people who can perform.

The difference can be an order of magnitude (10X) in costs and sometimes you can obtain both a 10X better cost performance and also get better capabilities too. It's like eating your cake and having it too.

Alistair Davidson

No comments: