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The Number One Reason Why Enterprise IT Fails To Meet Expectations

The Number One Reason Why Enterprise IT Fails To Meet Expectations

 

Consumer Reality Vs. Enterprise Complexity

There is a paradox in the way enterprises still view enterprise IT. The paradox becomes even more obvious when a comparison is made with the way consumers now view consumer IT. You see, the hard-nosed business approach, which is used in enterprises for hiring, firing, manufacturing, shipping, selling, and billing, apparently fails when it comes to IT.

It is common for corporate software development projects for example to start with the expectation of budget and schedule overruns. Enter enterprise skepticism - is it a surprise?



It's certainly fueled by past statistics on the failure rates of such projects. A report by consultancy company McKinsey from 2012 (McKinsey/Oxford study) stated that “half of IT projects with budgets of over $15 million dollars run 45% over budget, are 7% behind schedule and deliver 56% less functionality than predicted.”

Enterprise IT Options

What Consumers Understand Better than Enterprises

Take a look through a consumer’s eyes at today’s biggest growth market: mobile computing devices (smartphones and tablets) and mobile apps. The most successful apps, whether in terms of user adoption or revenue generation, are typically the ones that keep purpose simple. They may literally only do one thing, like the flashlight app for mobiles. As its name suggests, this app lets you use your mobile as a flashlight – and that’s all!

Our Darwinian Mobile App World 

Complex, useless or overpriced apps fade away in the consumer IT market. They are soon abandoned and forgotten as new apps arrive to compete in the survival of the fittest. There is a Darwinian order of natural selection among mobile apps.

There are already one or two clues in these paragraphs about why enterprise IT is falling short of the mark.

Enterprises have favored bigger, more complex systems. Consumers on the other hand cut to the chase, looking for the precise tool to do the specific job. Where business insists on a Swiss army knife, consumers just want a plain screwdriver or a basic ½” wrench, but not both – at least not in the same app. Enterprises resign themselves to sustained disappointment. By comparison, consumers don’t dither: if it’s not useful, it’s thrown out.

Is An App-Centric Approach The Answer?

What would happen if enterprises moved over to developing smaller, specialized mobile apps rather than large, monolithic systems? According to a 2014 survey report from Apigee, maker of a platform for digital acceleration, things don’t necessarily get any better. Even though mobile apps can contribute significantly to business success, 45 percent of IT decision makers participating in the survey were disappointed. They felt let down by the number, the quality, the cost, the business impact or the time to develop their apps.

Apigee blames a ‘control-oriented approach’ suited to ‘systems of record’, but unable to deliver ‘systems of engagement’ fast enough for today’s requirements. The finding is that those enterprises that succeed in their app development understand the value of using external expertise to become optimally agile and adaptable as their market and customer needs evolve.

Apigee calls this approach ‘Outside-in IT’. As part of the difference in attitudes to such outsourcing, more traditional IT departments in the survey tended to see only chances for cost reduction. More enlightened and more successful IT teams on the other hand spotted further, strategic opportunities to build value and competitive advantage, thanks to access to external technical and design knowhow.

A Journey Back to the Square One

This analysis about the state of enterprise IT isn’t wrong. However, it isn’t new either. And these illuminations are not specific to IT. Enterprises have been moving towards outsourcing of many different functions. Logistics, including warehousing and transport, is one example. There is the same dichotomy here too: some enterprises limit their expectations to cost reductions; others leverage the external expertise and coverage of their external logistics partners to improve their services to their customers and reach new markets.

From all of the above, we can home in on the #1 reason why enterprise IT fails to meet enterprise expectations. It’s because enterprise IT operates in one world and enterprise expectations live in another one.

To put it another way, enterprise IT doesn’t know what the enterprise expectations are, doesn’t care what they are, or both of the above. Sure, IT projects may have a needs analysis, but even if the analysis is correct and relevant at the start of the project, over-engineering and overruns lead to ever-increasing divergence as the project continues.

Why IT Gets Treated as a Special Case

If IT in the enterprise isn’t aligned to business needs, why isn’t IT ‘dealt with’ in the same way as manufacturing, logistics, accounting or any other major support function? This question would justify an article all by itself.

Here, we simply point out the growing dependence of enterprises on IT and the need to ensure confidentiality and integrity of corporate and customer information. These two factors already make it harder for enterprises to hand over the ‘family jewels’ to external partners, while being fearful of meddling with something critical that they don’t understand.

Yet enterprises are not obliged to seek external IT partners either. If the right IT resources exist inside the corporation and if they are aligned to produce business value, this solution may still be the best. Federal Express, the courier delivery service provider, gained considerable competitive advantage thanks to its own forward-looking IT organization that developed systems to help the company wow its customers.


Hard-Nosed Business People Have the Answer under Their Noses

What’s the moral of this story? Mobile apps, outsourcing, or even agile development methods are tools that help, but an enterprise that focuses solely on such tools is missing the point.

The principal cause of meeting or missing enterprise expectations is the alignment (or not) of IT to relevant business, user and end-customer needs.

Mobile App Users Only Accept Apps That Bring Practical Benefit

Mobile apps can help enterprises align because users will only accept apps that bring practical benefit. Agile development methods keep projects manageable, on-budget and on-time by using short cycles that move forward one feature at a time, but also by re-checking real business needs at the start of each cycle.

Outsourcing that leverages external business IT knowhow (the kind that today’s world requires) is a smart move when it helps an enterprise finally move out of its internal IT silo and face the real business and end-user world.

All these items make sense if and only if enterprise IT starts with and sticks to enterprise requirements, including changes along the way. In the future, the tools may change, but the basic imperative of sticking to real business as well as user and end-customer needs will stay the same. Enterprises that understand that and which use IT in that way can survive. The others have a message from Mr. Darwin waiting for them… 

Companies like Good Sign Solutions are at the forefront of introducing fully fledged, modern enterprise-level solutions to critical back office functions like billing in ways, that help curb complexity, enable transparency and automate non value-add manual tasks. The ease which consumers expect of IT is gradually becoming the BIG opportunity for enterprises willing to change their IT mindsets. 

 

See How Fujitsu Uses Service Automation

 

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