Managing Technology P. 5

New technologies such as blogs, wikis, Second Life and Skype are popping up, sometimes unexpectedly, in many organizations. Assessing which technologies to implement is difficult enough. Figuring out how to assess a novel technology that is already being used by members of your organization is even more challenging. With so many new and different technologies emerging all the time, trying to choose the "right" one for every company and situation is the wrong approach. Managers instead need to evaluate how it will work in their specific organization. In that spirit, the authors introduce the six-dimensional Genre Model -- based on why, what, who, where, when and how -- for considering the central issues, risks and benefits of using a new medium in the context of existing technologies. The model helps assess how employees' use and adoption of the new technology will align with the organization's mission, culture and business practices and how it may change productivity and effectiveness. Several case studies are analyzed. Blog Central at IBM, introduced by management as a self-publishing platform for employees, soon became more social than informational as users applied blogging to extend their personal networks, "get the pulse" of their organization and establish a sense of community. After MNI Partners, a management consulting company, adopted the Skype system to cut costs on its weekly international conference calls, the nature of those meetings evolved as participants exploited the new medium's properties. And when managers from a large European petroleum company, which the authors call Epsilon, established an internal electronic bulletin board for the exchange of technical information, they learned that many longtime employees, aggrieved by recent corporate changes, had other uses in mind for that medium. The Genre Model is used to analyze these cases, as well as to help explain, retrospectively, why the business letter gave way to the memo, which then was largely subsumed by e-mail.

Technology use, diverse networks and access to new information all enhance productivity.

Two Unisys studies indicate there's a wiser use of your IT resources.

For many years now, companies seeking to deliver higher business performance by harnessing IT have focused on alignment -- the degree to which the IT group understands the priorities of the business and expends its resources, pursues projects and provides information consistent with them. In practical terms, that means there must be shared ownership and shared governance of IT projects. However, the authors contend that their research -- a survey of more than 500 senior business and technology executives worldwide, followed up with in-depth interviews of 30 CIOs -- reveals a troubling pattern: Even at companies that were focused on alignment, business performance dependent on IT sometimes went sideways, or even declined. That's because underperforming capabilities are often rooted not just in misalignment but in the complexity of systems, applications and other infrastructure. The complexity doesn't magically disappear just because an IT organization learns to focus on aligned projects rather than less aligned ones. On the contrary, the authors say, in some situations it can actually get worse. Costs rise, delays mount and the fragmentation makes it difficult for managers to coordinate across business units. The survey also showed that almost three-quarters of respondents are mired in the "maintenance zone." IT at these companies is generally underperforming, undervalued and kept largely separate from a company's core business functions. Corporate management budgets the amounts necessary to keep the systems running, but IT doesn't offer enough added value to the business and often isn't expected to. Drawing on the experiences of Charles Schwab & Co., Selective Insurance Group, De Beers, First Data Corp. and National City, among others, the authors identify a group of best practices that constitute "IT-enabled growth." The companies that achieve the highest growth at a low cost manage complexity down, source IT staffing and software wherever it makes the most sense and create start-to-finish accountability connected to business results. Then, and only then, the best performers tightly align their entire IT organization to the strategic objectives of the overall business, using governance principles that cross organizational lines and making business executives responsible for key IT initiatives.

A new planning process, tested at established companies, puts e-business into perspective and helps make it manageable.

Has enterprise software become too complex to be effective?

Over the last decade, the Internet has transformed many aspects of the way business is conducted -- from how goods are bought and sold to where work is done. To explore what might constitute the next generation of Web technologies and what effect they will have on the nature, purpose and management of organizations, MIT Sloan Management Review contributing editor Martha E. Mangelsdorf talked with two leading experts: Erik Brynjolfsson, director of the MIT Center for Digital Business and the George and Sandra Schussel Professor of Management at the MIT Sloan School of Management, and Andrew P. McAfee, associate professor of business administration in the Technology and Operations Management Unit at Harvard Business School. Brynjolffsson and McAfee are confident that the future emphasis of some businesses will be on the use of Web 2.0 technologies to support innovation, creativity and information sharing rather than just to achieve cost cutting. They discussed the complementary relationship between traditional managerial tools, such as ERP and CRM, and the evolving modes of collaboration and communication, such as wikis. McAfee pointed out that one set of tools allows good ideas to percolate upward, after which the very structured process-management technologies can be used to replicate the innovation -- with brutal efficiency in some cases. Companies in very turbulent, information-intensive industries tend to be the ones that have gone the furthest with deploying the new Enterprise 2.0 infrastructure and the mindset that goes along with it, said McAfee. There are "softer cultural things" that companies can do to promote creativity among employees, Brynjolfsson said, which gives them the freedom to work laterally or diagonally within their organizations. The cultural shift away from the classic notions of productivity and output, such as billable hours, is more difficult for some companies to manage, and neither Brynjolfsson nor McAfee sees any technology that by itself will resolve this dilemma. According to Brynjolfsson and McAfee, technology innovation is engendering a whole set of complementary innovations in organizations that actually heighten the role of managers and executives. In fact, they said, it will be managers who will have to increase the ambient level of participation in and contribution to these Enterprise 2.0 environments. Companies cited in the discussion that are integrating the new technologies and cultivating the complementary cultural changes include Google, retail pharmacy chain CVS, Spanish fashion retailer Zara and Canadian software developer Cambrian House.

Although the Internet has become an indispensable tool for 21st-century organizations, a 2005 report of the President's Information Technology Advisory Committee bluntly states that the information technology infrastructure of the United States is highly vulnerable to terrorist or criminal attacks. In a brief overview of this sobering situation, MIT applied mathematics professor and Akamai Technologies chief scientist Tom Leighton, who served on PITAC and chaired its cyber-security subcommittee, describes two of today's big Internet security threats: denial of service attacks and "pharming" -- both of which could be used to disable individual companies or critical infrastructure, such as the nation's utilities. At the present time, little is being done to fix these problems, says Leighton, though the advisory committee recommended that the U.S. government lead the way by funding long-term, fundamental research on cyber-security issues. Doing so, would promote wider adoption of improved Internet protocols, and that, he says, would lead to a more secure, reliable Internet infrastructure.

When conflicts aren't managed well, a company's ability to innovate may be at risk.

The multitrillion-dollar IT industry's status of freedom from liability for consequences of product and service failure is historically unique and extraordinary, argues the author, and it is nearing its end. In a world increasingly dependent on software to run critical systems, including cardiac devices, financial markets and transportation systems, the potential for catastrophic and lethal failures increases. However, in the U.S. and elsewhere, at least where life and limb are not involved, it is technology users, not providers, that are regulated. Technology providers have benefited from a series of inhibiting factors including early legal settlement, corporate users being unwilling to offend their IT providers, and aggressive self-regulation in the industry. Eventually, the author argues, this will not be enough to stem the tide of IT regulation, and IT providers must be prepared for that day.