Last week, £400m was wiped off the share value of chemicals
giant ICI. Failures in the implementation of a SAP-based supply
chain management system have emerged as contributory factors -
evidence, if any were needed, both of the centrality of IT to
business, and of the importance of mapping technology
implementations onto new or existing business processes and
goals.
ICI's project team played and lost a dangerous game: by neglecting
to address their new software's impact upon business processes, it
failed to secure employee buy-in. As a result, the supply chain
faltered and then haemorrhaged customers.
There are lessons for the NHS in ICI's tale of woe. Richard
Granger, director-general of IT in the NHS, has £2.3bn burning a
hole in his pocket, but he is basing his plans for spending it on
purely technological considerations.
For Granger and the national IT programme, business processes are
of concern but, their remit does not extend to marrying up
technology choices with the environments in which they must
operate. The NHS Modernisation Agency is on hand to deal with the
details of business processes and implementation, leaving Granger
and his team to concentrate on their very limited role of sourcing
software and hardware solutions that they deem useful.
When IT works in isolation from the end-users it supports, project
failure is all but inevitable. It is common sense. We wouldn't
expect a decorator to choose the colour he paints a house without
first clearing it with the owners. Similarly, we should not expect
technology roll-outs to flourish without meaningful user
consultation, executive-level backing, and robust implementation
methodologies. (One such methodology is presented in a new book,
Changing Gears, reviewed this week on page 44).
Luckily, for every cautionary tale like ICI's, there is a shining
example to follow. ICI should have adopted the enlightened approach
taken by Barclays Bank, which has built IT into a multidisciplinary
project team in order to ensure compliance with Basel 2, the new
banking code for risk management, due to be implemented in 2006.
Compliance has massive implications for banks' IT systems, but
Barclays appreciated that Basel 2 raises problems that transcend
the IT department, and planned accordingly.
If the NHS does not move to a more integrated approach to
technological change, a fresh public sector IT disaster will surely
follow. With this week's Budget increasing our tax burden, it is in
all our interests that this does not happen.