Future of IT depends on a novel approach

Old-style process automation blocks fresh thinking

Every chance I get, I remind IT managers of the following, which I see as an increasingly evident truth of our economy: the future belongs to those who know how to create new things.

Not new as in a new car, but new as in a new car model. Novel things. Things that are valuable because of their difference from what has come before. Surprising in desirable ways. New products, services, markets or strategies.

Creating things that are novel and valuable is the capability most essential to generating value in developed economies of the future. Why am I so convinced of this? In part, because of something the CIO of a major US company said to me.

He summarised what he had been doing for the past two or three years: "Chunk it, routinise it, digitise it, automate it and send it offshore." He thought that there were only two activities in services his company provided that could not be sent offshore.

Unstoppable trend

I believe that the trend towards offshoring is unstoppable. If you can pre-specify work in detail, if quality can be assured via conforming to process specifications, why - purely as a business matter - would you hire expensive labour to do it?

The first wave of this offshore movement has been startling in developed economies, but the next wave will be breathtaking.

"Chunk it, routinise it, digitise it, automate it" is the bread and butter of what we have done with IT in the past three decades. As a profession, we have created immense value in this way. It is what we really know how to do, our very best trick.

In the future, however, that trick is likely to be performed increasingly in locales with low-cost labour.

Businesses in developed economies will capture value by having work done in places that have lower labour costs, but if you are not planning to move to Bangalore or Beijing, you will have to find other ways of using IT to create value.

The good news is there is a way. Learn how to use IT to support the creation of novel and valuable things. Realise that it is not about extracting value from consistent re-execution of the same processes, but about new processes with surprising characteristics and unexpectedly valuable outputs.

Automation reflexes

Our automation reflexes will not serve us well in efforts to create anew. Chunk it, yes. But do not routinise it. Digitise it yes, but do not automate in the traditional sense. Instead, automate to make trying out something new cheaper and quicker. Think cheap and rapid iteration, not cheap and rapid repetition.

Knowing how to create things that are novel and valuable is a different matter from knowing how to replicate a manufactured item or a service operation. Different ways of thinking, different management principles. The time to start thinking about these differences is right now.

Robert Austin is a fellow of the Cutter Business Technology Council, director of the Cutter Innovation Practice and a professor at Harvard Business School

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