Technology Attitude Essential Technology
Time as Currency As well over 50% of capital expenditure is on IT, as IT budgets continue to grow, and as the IT costs per unit cost of sale climb, it is not surprising that cost has dominated much of the decision-making around IT in recent years. Searching for appropriate ways of applying cost-benefit analysis to IT projects, designing chargeout or transfer pricing mechanisms for IT services, and experimenting with IT cost metrics have made sense.
Such concerns no doubt soon will emerge in e-commerce ventures as new IT costs are piled up on top of old IT costs and as doubt is cast on many dotcom revenue models. However in the short-term at least the currency in new IT is time not cost. Time punctuates business language, permeates IT consciousness, drives several new IT practices and fuels many of the tensions of e-business development.
Speed of decision-making, applications development, design changes, implementation, technology adoption – in short, of going to market – dominated our interview discussions. Because IT is the critical path, speed is a condition – an imperative – of success in new IT departments. For example, one IT executive in an e-commerce spin-off observed, “the intention has been quality, but we have had to compromise in favour of speed and learning”. A start-up CTO commented “we prefer to be imperfect and be there, rather than perfect and not be there”, while an incumbent company CIO reflected that “it’s a time and materials business now – you can’t cost things accurately and time is the driver”. One interviewee perhaps captured time as currency best of all: “IT can’t now fall on excuses such as ‘can’t have that quickly’ – the biggest sin is not to have something running. It is about fast against slow”.
Outward Facing When describing what was really different about IT challenges in the new economy, interviewees commonly used two related phrases: “customer-centric” and “external facing”. Doing business on-line is not new, but in most organisations most of the IT applications portfolio has been inward-facing – back office systems, order fulfilment processing and so on. Even customer-facing systems in sales, service and distribution often have impacted company personnel more than the end-customer. Exceptions like reservation systems; EPOS systems and ATM services have been regarded as just that – exceptions or special cases.
In e-commerce, customers, suppliers and partners are on-line and the systems represent the company. So our investigations highlighted four imperatives. The first is the necessity of 24 x 7 service levels (sometimes hyped up as 25 x 8!). The second is the challenge of providing infrastructure capacity to match uncertain levels of demand. Then applications development often was described in our study firms as new product development with an added ingredient of creative design. Finally – and quite novel it seems for IT personnel – there is the need to work closely with marketing people. One observation captured both the joint learning that is happening and the external shift in orientation: “The marketing guys are intolerant of longwinded, technical discussions. They are creative and overtly demanding because you have got to have a customer-spin on everything”.
Entrepreneurial style A corollary of this outward-facing orientation is the need for a more entrepreneurial style in IT. The past has been typified perhaps by a more disciplined work style. The engineering ethos, the control regimes created by project management, the performance measures which result from chargeout, quality management and service level agreements, and the routinisation implied by standards, procedures and best practices – not to mention the detailed negotiations and subsequent monitoring inherent in outsourcing – have added up to discipline.
In contrast, being at the cutting edge of business development, where time is currency and the focus is on markets and customers, inevitably leads to a more pioneering, entrepreneurial work style. “It is fun not to be safe – safe is a boring word” was one reflection which captured this change. A more formal indicator is the introduction of performance measurement and reward systems which emphasise revenue growth or meeting product time to market goals. Two of the most frequent words used by interviewees to capture how new IT differs from the past were “entrepreneurial” and “risk-taking”. “Let’s try it: I think I know how” was a phrase which seemed best to capture this entrepreneurial style.
A “Fun Climate” Most of the words we have used to characterise old IT – “cost”, “engineering”, “disciplined”, “inward-facing” convey a serious or earnest climate. The traditional IT shop very often became a production facility populated by section partitions, progress charts, orderlines and some lack of soul. Such an environment perhaps suited the often introverted personality types who entered the IT profession.
In new IT departments, multidisciplinary groups may be chatting over a screen design or surrounding a whiteboard. The CEO or COO may be deep in conversation with a programmer. There are probably icons or vision statements on the wall to remind everyone of the purpose of the business. In classical start-up mode, there may be a football table or games area in the centre of the office. One spin-off company had a “chill out” zone where IT personnel could relax – and often new norms of dressing down are being set. One IT executive observed that “the social side and work have merged: enjoy and socialise while working”. Indeed our interview conversations often were peppered with words like “fun”, “exciting”, “buzz”, “roller coaster” – and, of course, “cool”.
Technology Edge For many years IT executives as much as business executives have been somewhat risk-averse about new technologies and techniques. “Leading edge is bleeding edge” captures this attitude. New technologies have enabled new ways of doing business, but many firms prefer to be quick followers rather than early adopters. Even IT professionals often would see beta-testing of a new version of software as the limit to risk-taking. Indeed there is a very sound case for at least believing in appropriate technology (Bensaou and Earl 1998), matching the sophistication of a technology to the business need.
In E-commerce ventures, the technology risk profile has changed. There is a willingness, even a recognition of the imperative, to be early adopters and to experiment. During our six month study, several start-ups and spin-offs assessed, initiated and implemented new WAP-based channels. Others were investing in interactive digital television channels as complements to PC-Internet channels. Most of our companies were actively engaged in technology forecasting and scanning, technology R&D and joint ventures with new technology companies. It is not unusual for CEOs of dotcom start-ups and spin-offs to go on regular technology study tours and to meet with their counterparts in core technology supplies. Finally, expenditure on IT is rising rapidly in e-commerce ventures, not least as new platforms are developed. As one incumbent CIO remarked: “We have been reluctant to engage in technological R;D in the past, but now it’s becoming an imperative.”
These seven shifts in the character or conduct of IT may be temporary, reflecting the fervour of “dotcom mania”, the disequilibrium effect of new technology and, in the case of spin-offs and incumbents, the explicit attempt to change the context. However, they seem likely to stimulate both unlearning and new learning and we collected evidence of at least seven shifts in IT practice across the sample firms (Table 2).