Getting the edge with IT

No one confuses surgery with pediatrics -- but most people perceive application development and infrastructure maintenance as one big fuzzy mass of undifferentiated IT activity.

But these are actually two separate and distinct disciplines, says Peter Thompson in his new book, Maximizing IT Value through Operational Excellence. Thompson is the founder and CEO of RIS, a Calgary-based applications support and maintenance consultancy.

Much like expecting a pediatrician to perform surgery, the chronic inability to align IT to business across industries is a symptom of an IT sub-discipline being asked to the wrong thing, according to Thompson. And this is a consequence of an immature IT industry that has spent the last fifty years on big-bang buildup of IT systems -- a focus that Thompson says is disastrous in today's business landscape.

"There's a coming realization that, gee, we built all this stuff -- now we need to figure out how to effectively manage it to get maximum value out of it," says Thompson. IT should be viewed as an applications support and maintenance (ASM) discipline primarily, which is a custodial role concerned with sustaining and leveraging system assets, he says.

At the CEO level, he says there is a shift away from the notion that competitive advantage lies in application development. "Except for a few unique packages, everyone pretty well has the same software and applications: Microsoft Office, Oracle and so on. It's not the software you have, it's how you use it that makes a difference."

While innovation plays an important role, it is wrong headed for IT to pursue this slavishly, says Thompson. Real business value lies in managing the nuts and bolts of IT systems and processes efficiently. "For the average company, competitive advantage will come from doing the same thing as the next company but a little cheaper, faster or better."

Innovation is over-rated, as it is fleeting and ephemeral. Competitors will quickly swoop in to copy successful tactics, he says, citing American Airlines (AA) as an example. "In a famous statement, AA's CEO said he would sooner sell the airline than its Sabre reservation system," he says. But the CEO was misguided in his belief the system would give AA a killer advantage. "If that were still true, all the other airlines would be bankrupt today." Instead, AA's lead quickly slipped away when other airlines acquired similar reservation systems.

But operational excellence has also proved elusive, largely due to IT's historical focus on what Nicholas Carr, pundit and author of Does IT Matter, calls the Great IT Buildout. "IT types all love to build, but this is a major stumbling block. There needs to be a cultural shift away to support and maintenance."

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