Opinion: Is IT a utility function?

Many would argue that the information function, and specifically IT, should be considered a utility. But is this really the case, writes David Chan, director of the Centre for Information Leadership at City University London.

Many would argue that the information function, and specifically IT, should be considered a utility. But is this really the case, writes David Chan, director of the Centre for Information Leadership at City University London.

We often use the word "enterprise" to describe an organisation because it has the emotional connotation of something positive - that there is a wish to make a difference. All enterprises exist in an environment and conduct exchanges with it. Commercial enterprises receive money from shareholders, investors and banks to deliver something that customers will pay for. Public enterprises take money from the taxpayer and deliver services. They all draw staff from people in the environment. So there is a continual interchange of people, money, goods and services with the enterprise's environment.

An enterprise's "span of foresight " is defined as how far ahead in time it can make accurate predictions of its environment. So, if the organisation can make accurate predictions two years ahead, we say its span of foresight is two years. An enterprise's "inflexibility" is the time it takes to make a major change in business processes. So, if an insurance company needs three years to change from a branch operation to, say, delivery through the internet, its inflexibility is three years.

Using these definitions, some simple conclusions can be drawn. If an enterprise's span of foresight is greater than, or equal to, its inflexibility, then it is in a position to respond to any changes in its environment. If its inflexibility is greater than its span of foresight, then the enterprise is at strategic risk - it may be able to spot a significant shift in its environment, but does not have the flexibility to make the change in time.

Most enterprises maintain their viability through products or services to their customers or clients. This requires them to host business processes that transform their inputs - people, raw materials, information, and so on - into products or services. These processes are at the heart of the viability of enterprises. In most cases, the products or services rely on information, information systems and information technology.

So those who would argue that IT is a utility ignore the possibility of change in business processes. The assumption is that, once an IT solution is found to support a business process, it can continue to do so for a significant period of time. All the information function within an enterprise needs to do is to ensure that the processing power required to support business processes is available at an economic rate. Is such a perspective justified?

I suggest the span of foresight is shortening in most business sectors. Substantial, and possibly structural, changes are occurring across the global trading system, for example. Socio-technical changes are having significant impact on the way markets function. We shop across national borders using the internet. We can access social networks through our PCs and mobile devices, changing the frequency in which we interact.

Given all that, how far ahead can enterprises actually predict their environment? Speaking to business leaders, the three to five-year horizon so beloved of corporate planners is a joke. Spans of foresight for most enterprises now lie within six to 18 months.

Enterprises therefore need to ensure their business processes can be changed quickly. If not, this could have a significant impact on their viability. So where does this leave the argument that IT is a utility?

IT can be a utility in certain circumstances. If your environment is predictable and you have long spans of foresight, then you may well treat your systems as a utility. But if your span of foresight is short and you need flexibility to respond to opportunities and threats, then you treat your information systems as a utility function at your peril.

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