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IT as a universal bottleneck
While the products and services of the organization might have nothing to do
with IT, the flow of materials, products and services and the means for more
effective marketing and sales, depend more and more on IT. Most new
technologies are heavily based on IT and the adaptation to the flow of incoming
new IT capabilities becomes more and more difficult. Actually as the use of IT
becomes bigger, and more complex, controlling the whole IT activity might
become chaotic. New managerial capabilities are needed to maintain the huge
suite of features, coming from various sources, under control.
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Just to illustrate the problems: The banking systems generate huge amount of
IT requests from better mobile applications to improving international and
multi-currency transactions, which have to conform to various local regulations.
The appearance of crypto-currency adds challenges that require new IT tools.
Naturally banks have endless artificial intelligence initiatives and, of course,
they need to constantly improve their cyber protection. Other business sectors,
like Retail, also face new threats that require new IT tools to provide new
services to their customers. The whole sector of Manufacturing is facing
Industry 4.0 new digital control and connectivity.
The “Flow of Value” is defined as the current way the organization delivers
value to customers. This is definitely a critical flow for every organization.
However, every organization has also to maintain another critical flow: the
“Flow of Initiatives” to improve the Flow of Value in the future. The Flow of
Initiatives consists of all the efforts invested in expanding the market demand,
developing new products/services or finding better ways for the “Flow of
Value” to adapt to the trends in the market, like faster response time. Each of
these flows has its own constraint.
The means for gaining more market, or even preserving the current demand,
rely heavily on advanced features of IT. Being blocked by the bottleneck
causes considerable damages, like confusion on what initiatives are in the
pipeline and the priority they should get in competing for resources. The
confusion and the raised internal competition on IT resources cause multi-
tasking and frequent priority changes, which cause significant waste of capacity
of IT people, turning the situation into a vicious cycle. Considering the fact that
truly good IT people are scarce, so the competition on them is wide, having the
IT as a bottleneck will not be solved in the near future.
The real acute problem with IT as a bottleneck to growth is that the situation
looks temporary, but it is not. At any given time the stream of new IT-based
technologies looks like it’d take certain time, maybe even few years, to
implement, but then the pressure on the Flow of Initiatives will go down. This
is simply not true. The whole area of Artificial Intelligence (AI) is just starting
to penetrate into actual use in large organizations, and this flow will definitely
continue and even accelerate. In the same way the need to improve the security
of the IT would go up more and more. So, this state of having to deal with a
stream of new significant IT oriented technologies will continue.
There are two parallel efforts required to get the IT, facing many routine but
urgent requests, while also struggling with a stream of new technologies that
seem relevant, in control.
The key argument is that improving the flow of WIP in the IT department might
solve the problem for some time, but without managerial priorities on the
incoming requests the problem will return in the near future.
The next step is to implement the new IT tools into the Flow of Value to
generate the added value. The implementation may require going into a
Transition Period. Getting used to the new tools takes time. During that period
mistakes are done and all the managers have to be ready for signals of a
problem and deal with it as soon as possible. At the transition time the need for
management attention across the hierarchy is at its peak.