IT Governance: Stop the Pendulum
In the current business world, most IT decisions are Yes-No decisions made based on the return-on-investment that the IT department can prove. For a greater part this decision process has been successful since a majority of the decisions so far have been about adopting a new technology. The nature of the technology did not allow for tradeoffs between the two possible solutions. However now as IT matures and plays a more central as a business enabler, companies should realize that there is a middle ground that provides a tradeoff between the extremes. As seen in the article, pursuing a pure centralized or pure decentralized approach for IT systems is no longer a feasible solution. Instead the value of each individual component should be measured and a hybrid system that achieves synergies cost-reduction while retaining localized responsiveness should be considered. However this is easier said than done. Having a hybrid makes it even more difficult to manage. The centralized / decentralized decisions need to be aligned with the business processes that it supports.
In the next industrial revolution, Atoms are the new bits
Entrepreneurs and inventors have always existed and have given the world some fantastic products and services. However, historically only a handful of them have been successful. This is due to the unavailability of resources and large volumes required to see profits. The IT revolution is giving inventors access to resources that will enable them see their ideas all the way through. The process from design to production that typically took years is not possible in a couple of months. This allows local startups to compete directly with large corporations. Also with crowd sourcing, a community could get together to collectively develop products that typically required the time and resources available with larger firms. The spread in the use of enterprise level IT systems and applications at a public level is now challenging the competitive advantage that these very systems give to larger firms. These firms now need to fight this new challenge by ensuring that their IT systems are fine-tuned and capable of delivering value. Otherwise their unresponsiveness to the changing IT scenario could be the main reason for their failure.
The question I would like to present to the class
- A hybrid IT system is better suited since it provides a good balance between centralized cost reduction and localized responsiveness. However it will be difficult to maintain the hybrid system and prevent it from shifting over time towards either a centralized or non-centralized system. What checks would you put in place so that this inevitable shift is avoided?
- Do you think the rise of crowd-sourcing, DIY kits, threaten the standardized companies that depend on the advantages that they thought were unique to them? How should these companies react to this increasing trend?