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Risk and reward

To ensure maximum benefit from innovative industrial processes and technology, businesses need to consider IT innovation and become early adopters of pioneering brands

IT has tremendous potential to transform businesses. From introducing new ways of working to using Big Data to provide transformational insights, it can radically change the way we run our organisations. However, many companies are slow to take the plunge into new IT solutions, creating a huge gap between the most IT-savvy firms and the IT laggards.

This has been studied by academics such as Harvard Business School professor Kristina Steffenson McElheren, who investigated why so many companies get it wrong. She believes IT has the potential to completely transform the supply side of business by flattening hierarchies, shrinking supply chains and speeding up communications. This enables organisations to spend more time thinking up new products and servicing customers, and less time checking boxes. However, organisations must be willing to engage in radical change to achieve the benefits, bringing together processes, people, organisational structures and supply chain partners. In her research into manufacturing firms, McElheren found that the larger firms were more likely to adopt incremental change, while smaller firms were more likely to adopt more radical change.

Fear of failure

Unfortunately, the aftermath of the 2008 financial crisis has made it more difficult to introduce IT innovation. “Finance directors are looking for rapid return on investment, the focus is on ‘business as usual’ rather than transformation, and in medium sized businesses, strategic thinkers have been driven out by continued restructuring,” Richard Blanford, managing director of IT infrastructure and consultancy company, Fordway, says. “Change programmes tend to be a response to external imperatives, such as new legislation, rather than being driven by a strategic vision. Meanwhile many organisations continue to use complex IT infrastructures that are no longer fit for purpose and are unwilling to make changes unless they are convinced that the alternative is substantially better.

“Sometimes whole industries find that they have been left behind and find change is driven by necessity, rather than strategy. For example, the UK’s network of cash machines was based on the Windows XP operating system. When Microsoft withdrew support for this system, tens of thousands of cashpoints were still running it, leaving them potentially open to security breaches and putting immense pressure on the banks to implement a solution.”

If organisations continue to do what they have always done, they cannot expect to achieve a different result. However, our willingness to innovate is also limited by learning at an early stage that good performance means avoiding failure, not making mistakes. Another academic, Edward D Hess, points out that this can limit our willingness to innovate because innovation requires a willingness to fail and learn. He believes that being smart is not about knowing all the answers but knowing what you do not know, prioritising what you need to know, and being very good at finding the best evidence-based answers.

The same premise is discussed by journalist Matthew Syed in his book, Black Box Thinking. He uses examples from the Mercedes Formula 1 team to Dyson to explain why success means confronting our mistakes and learning from them.

Is IT meeting your business needs?

“We find that many businesses are keen to adopt new ways of using IT but get bogged down in trying to understand the why and how before going ahead,” Blanford continues. “Instead, they need to step back and take a long hard look at how IT is meeting the needs of their business.

“The real value of IT to most organisations comes from three factors: the business specific applications and data to run their operations; the business process improvements that can be implemented more effectively using IT; and the information and insights that can be gained from the data the organisation retains. Anything else is just supporting infrastructure and systems, the ‘plumbing’ that keeps the business running but does not add strategic advantage.”

Blanford explains that the first step towards innovation is to review existing IT against these three requirements, and then think radically about what change could achieve. Business imperatives leave limited time for strategic thinking, so obtaining expert opinion from outside the organisation can help to provide the data on which to develop a business case for the board. Your organisation’s existing suppliers may not be best placed to do this, as they have a vested interest in maintaining the status quo.

“We recommend benchmarking against leading organisations, both in your own sector and elsewhere, studying analyst recommendations and talking to companies who have a track record in delivering IT changes in order to benefit from their experience,” he says. “We’ve all heard about hospitals learning from Formula One teams; what fresh expertise could be applied in your sector?

“Sometimes an external point of view may be all that’s needed to ensure a change programme achieves the desired results. We worked with an organisation that was implementing a £1million IT improvement programme but was continuing to experience major reliability issues. We reviewed the various projects within their programme and discovered that they were not designed to deliver specific business outcomes. For example, a project to install software which would warn of potential infrastructure problems had been completed and closed but the software was not being used, as the project brief had been solely about installation. With the problem identified, the various IT projects could be prioritised, and the in-house team were then able to complete the change programme successfully.”

Consider challenger brands

Another important aspect of IT innovation is a willingness to consider challenger brands. Many organisations fear becoming an early adopter because they do not want to take what they perceive as a risk with an unknown vendor, no matter what innovative features their products offer or how competitive their price. As the saying goes, ‘nobody ever got fired for buying IBM’. There is also limited time to review market newcomers because today’s IT teams are much smaller.

However, by not considering up and coming vendors and new technologies, organisations miss out on opportunities to innovate, improve productivity and cut costs. “They also risk getting tied into their existing vendor’s upgrade cycle, which can be expensive, may not take them along their desired path or, even worse, may promise new developments which then take longer than promised to materialise,” Blanford explains. “Considering new market entrants and making a considered decision whether or not to change vendor should be part of the strategy for every organisation which is serious about using IT to gain business advantage. Is there an opportunity to do things better? Has the incumbent vendor kept up with market developments? Are there new solutions that offer better capability at reduced cost and/or with more flexibility, or has there been a step change in technology which is at the core of a new vendor’s product? It is important not to be complacent but to search out new and exciting products and then to choose the one which will really make a difference in a realistic timeframe.

“As a vendor independent company, we are constantly on the look-out for new products which can offer genuine business advantage, and there are some interesting options which are well worth considering. Some work in tandem with well-known products to improve performance, while others offer a new way of handling a need.

“A number of companies have found ways to help organisations get more from their Microsoft products. One such company is up and coming vendor Cireson, whose products will extend the capabilities of Microsoft’s system management software and will also help manage Microsoft licencing. Every organisation we have ever worked with has had licencing issues, so this or similar products could pay from themselves in licence savings alone. No vendor will ever tell you that you have spent too much on their licencing, so third party products have obvious advantages in this context.

“We have also been testing software from another challenger brand which enables organisations to improve the performance of their SQL Server database without adding more servers through enabling users to bypass the operating system when reading and writing data. If your users are complaining about slow response times and your database is a business-critical application, this could make a significant difference.”

Another way to streamline and speed up IT performance is to reduce the amount of data stored and backed up. An article in a leading IT magazine claimed that an average document can be replicated 30-40 times, with copies stored each time as it is sent around. Deduplication has been with us for some time through established brands such as Commvault, IBM and Veritas, but there are also challenger brands such as Druva which will search endpoints and cloud locations; next generation storage from the likes of Tegile, SolidFire (now NetApp) and Reduxio which includes data compression and deduplication; and new ways of carrying out back-ups from Cloudian, Cohesity and Rubrik, which have progressed from emerging technology to challenger brand. As well as reducing the amount of data backed up, all will assist with GDPR compliance.

“Of course, it is vital to carry out a detailed evaluation before introducing new technology,” Blanford concludes. “Before we offer any new product to our customers we carry out a comprehensive review, where we meet the companies concerned, trial their products and see how they stand up to a real-life environment. If everything goes well, they become part of our portfolio. It’s worth remembering that Google was once a challenger brand!”

Change is always risky and IT change is extremely visible. If problems occur, there is no place to hide. But by asking the right questions, researching the options, learning from the best and not being afraid to innovate, organisations can achieve a step-change in performance.

CTS The industrialisation of IT
CTS - Industrialisation of IT
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