Why processes, not technology, will drive business improvement

Businesses are constantly seeking new ways to maximise their profitability and this is never truer than in today's tough economic times, writes Alan Bowling, chairman of the SAP UK & Ireland User Group.

Businesses are constantly seeking new ways to maximise their profitability and this is never truer than in today's tough economic times, writes Alan Bowling, chairman of the SAP UK & Ireland User Group.

Traditionally, businesses had large IT teams with a complex range of skills that could keep systems constantly in tune with the changing needs of the organisation.

However, over the next few years we will see a shift in the types of businesses that use IT successfully and the ways they use it. Those that will likely be most successful will be those that focus on modelling and modifying their business processes rather than concentrating solely on the technology.

This will have a huge impact on the way organisations run, the types of skills they need and the role of the IT department. While this may seem scary to businesses that have invested heavily in their IT teams, it needn't be.

When done correctly, it can liberate and even elevate the IT department to play much more of a crucial role in the way the organisation is run.

Software sophistication

An obvious change that we are already seeing is increasing software sophistication. As software companies constantly re-engineer their products to make them easier to use, businesses need less technical knowledge in-house to keep them running.

For example, in the SAP business process modelling environment users can drop & drag processes such as invoices on screen and automatically decide if they want to send them by post or electronically, therefore streamlining the process and eliminating the need to pass invoices through to the finance department for processing.

Over time, software will become so simple and easily customised by the user, that businesses will no longer need a person with specific software skills for this purpose.

Changing focus

As a result of software becoming more sophisticated, businesses will gradually stop focusing on technology and the associated skills. Instead, successful businesses will shift their focus to how they would like to run the organisation, how it can be improved and how business processes can be enhanced or streamlined to make the company operate more smoothly.

This shift will mean that businesses will need less technical skills and therefore fewer technically-focused people to run the information services, or IT environment. Instead, organisations will use business process consultants to examine how business functions can be made more efficient and compliant.

Businesses in the future will also start to look at how they package up their IT services. Already some are starting to adopt a service-oriented architecture approach and begun re-engineering their processes. Key to this will be creating reusable code or services in order to reduce software development time.

What will dictate success?

Whether or not a business can adapt will hinge on the culture of the company. Businesses that have fixed processes and where technology is seen as the "nuts and bolts" that allow the company to function, are less likely to adopt a service-oriented architecture approach. However, organisations that can quickly adapt to this type of approach and run with it will have the most success.

Another cultural impact stands to be the changing role of the CIO. For example, many of today's CIOs might report into the finance director, but in the future a business that has changed its focus to streamlining business processes may well have the CIO reporting directly to the CEO.

This is because CIOs are in a unique position as all the company's business processes pass through the IT department, allowing it to see how each service fits together. This high-level view of how the organisation functions can allow the CIO to become highly influential within the business.

The changing role of the IT department

The IT department is ideally placed to become the custodian of business processes as it understands how different parts of the company fit together and run.

This means that the traditional role of the IT department will change significantly. It will be able to use its knowledge of technical and business processes and how they fit together to look for and influence how processes and services can be streamlined. For example, the IT department might bring different departments around the table to discuss what processes can be made to be more efficient. It can also drive the conversation about what can be streamlined based on what services it sees and how they currently run.

Driving business improvement

While businesses will be forced to adapt at least partially as software grows more sophisticated, it will be the companies that embrace this change and shift their focus from technology to enhancing business processes that will ultimately reap the rewards. Not only will this help businesses maximise their profitability in the long run, but it will also benefit the IT department and raise its profile within the organisation.

This was last published in October 2009

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