16 Jun2011
Posts Tagged ‘Information Technology’
09 May2011
You can outsource IT, but can you outsource innovation?
While doing research for my Information Technology Management (MBA) class at UNLV, I came across the article “The Risks of Outsourcing IT” by Michael J. Earl (Sloan Management Review, Spring 1996). Earl explains that the decision to outsource IT is often driven by the need to cut costs. However, outsourcing IT functions central to business strategy is risky. Earl lists eleven risks of outsourcing, of which the eighth, “loss of innovative capacity,” really caught my attention (see page 5). Earl tells of a conversation between a company’s CIO and an executive of the company’s IT vendor. The CIO expresses his disappointment in the vendor’s lack of innovation. The vendor’s executive responds that he thought the deal was all about the cost and didn’t know that there were expectations to innovate. I think that there are many IT service providers that innovate, generally speaking, in providing services to their customers. On the other hand, an IT vendor that innovates for an individual customer’s business strategy and adds value is much more rare. That is the type of innovation IT service providers (or any business service provider) should strive for.
16 Mar2011
Business Process Obliteration
Even though more than two decades have passed since it was written, the principles in the article “Reengineering Work: Don’t Automate, Obliterate” by Michael Hammer are still relevant to business process reengineering today. It was published in the July-August 1990 edition of the Harvard Business Review. Like my last post about the article “IT Doesn’t Matter”, this is required reading in my MBA class at UNLV and I found it worth sharing (and I’ve found blogging to be an effective way of learning the material, so thanks for studying with me). Accountants seem to have the reputation of sticking with the status quo and doing everything the same as last year, so there is a lot that I (and you, if you are an accountant) can take away from this article. Hammer explains that many companies apply new technology to “automate” old business processes, but in many cases, those processes should be reengineered or completely “obliterated.” Hammer promotes the idea of discontinuous thinking – meaning that managers should challenge old rules and eliminate inefficient and obsolete processes. An interesting example that Hammer provides is Ford Motor Company’s implementation of an invoiceless processing system in the 1980s to eliminate paper matching and payment authorization procedures in its accounts payable department. This radical change resulted in big savings and efficiency improvements. Fast forward twenty years. With today’s technologies, including mobile devices and cloud computing, there are more opportunities than ever before for reengineering. I hope to be able to break the accountant stereotype by thinking outside the box and seeking out innovative ways to use technology. One of these days, my conversation when I return home will go like this: “Hi honey, I’m home!” “How was your day?” “It was great. I obliterated a few old processes today. How was yours?”
17 Feb2011