Difficult times make IT more important

Of course this is easier said than done and it has been made even more difficult by a number of structural shifts in the global economy.

There is now increased business turbulence and risk. The recent global financial crisis has led all businesses to develop risk mitigation strategies that not only need to be highly flexible, but which can also be quickly executed.

There is a new need to differentiate. To compete effectively in today's challenging market and to sustain a profitable business, companies are turning back to their core competencies and defining clear strategies for differentiation.

There is a need to comply with increasing domestic and international regulations. The recent melamine scandal emphasised the need for businesses to ensure compliance with legal and regulatory mandates around the world. All of which, of course, needs to be done without increasing costs.

As a result of these shifts, businesses must operate in a very different environment than in previous economic eras, and many chief executives are turning to their IT departments for support. As a result, IT departments are collaborating with business units in new ways.

One way is innovation through enterprise services-oriented architecture (SOA). With this architecture, IT organisations can create, change or update business processes in small, incremental steps. For example, invoices are traditionally sent to vendors by the accounting department upon confirmation that goods have been received in the warehouse. When using a Vendor Managed Inventory (VMI) system, invoices are sent to vendors upon confirmation that goods have been issued out of the warehouse. This slight shift in the business-process flow enables tremendous cost savings but can also cause confusion amongst business units because it is not how business is traditionally done.

With an SOA-based IT infrastructure, associated business process steps and approval workflow can easily be adapted to support VMI. IT is now able to quickly respond to the demands of business units as market, competitive, or customer requirements change.

IT departments are also adopting IT-enabled operational excellence.

Organisations often operate with an implied understanding of current business processes. However, those business processes are often managed and controlled through Enterprise Resource Planning (ERP) systems. As a result, it is critical for business units and the IT department to work together to analyze and question existing business processes, to clearly identify areas of improvement and growth, and to place them in order of priority along with an executable road map. This allows process inefficiencies to be clearly identified and removed, thus helping organisations to reduce operational costs across multiple lines of business.