Previously, I wrote about Business and IT Alignment and what it means for future managers.
Getting both aligned is a very complex task with too many variables to be considered (just ask to a couple of colleagues around you, and see if you can get to any consensus!). And yet, answering the question can be such a game-changer for organisations. Biotech start-ups are good examples with smaller players challenging well established “giants” by linking technology to their businesses. Other examples can be found in the banking industry where banks are actually competing with tech companies such as Google (Wallet), Apple (Pay), Paypal, and so many others.
Adopting technology comes with opportunities and risks to organisations and their businesses. Data readiness and user experience among others are commonly referred to as opportunities; whereas governance, talent and knowledge are typically considered as challenges.
What about costs?
In the context of a conversation I had recently about technology trends, a friend mentioned that the company she works for is deploying some of their systems onto the cloud because it’s undoubtedly cheaper. My next reaction was to ask her what does “undoubtedly cheaper” mean?
The Margin Value Theories (Jevons, 1985) states that the cheaper a particular commodity gets, the more applications people will find for it. As a result, its consumption increases, leading individuals to spend their savings on it. Today, Jevons paradox still holds true for technology. For example, as far as cloud computing is concerned, perhaps it is cheaper to run cloud-based solutions rather than to have the same technology in-house. However, with more options, the savings generated – and often greater amounts – are spent on new applications, services, and complementary technologies.
Undoubtedly, there are too many benefits to be gained from adopting the technology, most of them unknown by the time a business case is put forward and the implementation begins. A Forrester’s survey showed that 49% of their respondents looking at private clouds to reduce costs, found agility for development and testing the top benefits they would get (84%).
However, hidden costs also exist and are frequently missed out from the business case. Sometimes, such costs come from new technologies making organisations feel uncomfortable to quantify them. For example, being mobile and have all the information at your fingertips is great, isn’t it? It surely is! But what about the financial and operational costs? Organisations are now dealing with the opportunity of using a myriad of different devices and technologies but are lacking the knowledge and tools to maintain all these different pieces of hardware and software together. Employees ask (almost demand) companies to go mobile and have data and services always available, but often ignore the fact that this request represents an IT burden that requires additional investment, development and maintenance of different ecosystems, as well as, monitoring different sources of security threads. There’s an interesting related article here. Although there are benefits attached, these are costs to consider too.
So, back to my friend’s comment, she described the thought-process behind the deployment of their systems. Undoubtedly, in this context, was a matter of semantics as her organisation has a clear picture of the hidden costs and benefits of adopting the new technology (and recognises that some “surprises” will appear along the way). But, this is not always the case inside meeting rooms where decisions are made.
How is it like in your organisation? Is undoubtedly a matter of semantics or more a mindset?