It is not surprising to see a lot of interest in aligning business and IT. In some cases, the relationship is so frayed that it could be fodder for entertainment news shows. As one business executive put it this week, "Dealing with IT is the worst part of my job." So as people grapple with approaches to repair these relationships, it's good to remember what we know doesn't work well. With that in mind, there is a wonderfully instructive case study about business process first approach to Business/IT alignment.
About 10 years ago, one insurance company went to town on process management. They defined all of their processes. They applied LEAN techniques. They re-engineered all of their technology stack to support these processes based on n-Tier architecture and BPM principles. The result was a tremendous platform that was fully aligned with business processes based on full alignment between business and IT.
This company reaped optimal benefits from this investment for all of few months - the market place changed. It wasn't a very large change, in the scheme of things, but it was a complete 180 degree turn in one of the fundamental assumptions made during process definition. Overnight, this company's sizable investment into state of the art technology became obsolete legacy - neither the processes nor the completely aligned technology stack could support this change. Of course, this became IT's fault for not being sufficiently 'business-aware'. Mind you, this really wasn't anyone's fault - there was no way to predict this change would occur, any more than you can predict what innovations will drive the market a year from now. So being process-savvy, the business introduced new processes to handle these new market rules. But because the system was fully aligned with the old process, it couldn't change that easily. And you couldn't just rip it apart and put it back together without impacting the existing book of business.
After much grumbling about IT's resistance to change and the vast barriers IT was telling them were required to make that simple change happen, the business cobbled together some access databases and excel spreadsheets and manual paper processes to augment the state of the art system. And as the book of business based on new market rules scaled past the ability of manual processes and other bubble gum and shoestring approaches to cope, business came to IT asking for help in automating their new process platform. As with most situations, the longer you wait the more it will cost. Shocked and awed by the new and increased price tag, business stakeholders decided to defer any technology investments and simply hire more people cheaper to run the manual processes. Thus they turned to Business Process Outsourcing (BPO) - which was wonderful for the duration of the first contract... We all know what happens after the first contract expires.
Business got into serious trouble in this case study by making what appeared to be sensible decisions about both short and long term needs. Their technology partners were also making what appeared to be sensible decisions about both short and long term needs. None of the decisions or intentions in this case are malicious, or even wrong - lots of people try to do it this way. But then lots of people believe that BPM failed them, too. To a degree, they are right - BPM by itself, without service oriented and data management underpinnings is very similar to what we used to do with COBOL on the mainframe a long time ago. In today's world, we call that legacy, and any business/IT alignment based on business process first approach will run into the sustainability challenge. Processes change too quickly for that alignment to stand the test of time.
16 hours ago
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Tuesday, August 25, 2009 |

2 comments:
Great case study. Clearly "agility trumps single-minded devotion to process" is the moral of this tale. It's also clear the rate of change is not going to decrease, making agility more important as time passes. The thing is, process matters, and employing BPM software can be a part of becoming more agile, so long as SOA underlies everything. Forrester analyst Randy Heffner has a construct he calls "digital business architecture" that puts it all together nicely.
This is a wonderful example of the peril of IT trying to stay aligned with business while not fully optimized. Business is changing so fast that in order to stay aligned, IT needs to be agile. The failure to adapt to new business conditions is not caused by the adoption of a process-oriented method, be it LEAN or BPM. It's because of IT's naive thought that business processes are stable and won't change much over time and its inability to adjust quickly.
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