Is There a Wall Between IT and the Rest of the Company? Part 1 of 2

In the first part of this two-part series on IT departments and the role they occupy within companies, this month I’ll take a look at the divide that often exists between IT and the rest of a company. I’ll examine some of the root causes for these conflicts.

Here’s the picture: A multichannel catalog company with sales of $20 million has an aging order management system that’s been in place for more than 20 years. While there are some things the users like about it, the company has basically outgrown the system. It needs far better marketing information, e-commerce site-to-business systems interfaces, forecasting and inventory management, and the ability to better deal with light manufacturing and tracking sets and kits, which are a major part of its business.

The president of the company authorizes an investigation into the benefits of replacing the system. Immediately a turf battle ensues. The IT department is already researching the Internet for the most technically up-to-date IT platform. The users’ comments are predictable: “They’ll pick the most expensive, technology-driven system out there regardless of whether it fits our business.” There’s a proverbial glass wall between the two groups in many companies.

The outcome: After months of no progress, the president shrinks from his responsibility and says, “We’ll keep the current system.”

Unfortunately, this scene is played out on a daily basis in catalog companies of all sizes. In defense of IT people, they’re often given responsibility for everything from telephone systems to help desk to advanced WMS systems to e-commerce and e-mail systems. Most often they’re underbudgeted. Management backs into a policy of a percentage of net sales that the company can afford to spend. Additionally, the technology is diverse, complex and represents generations of different languages, databases and standards.

Now to the aid of the users. IT takes more of a technological point of view than a business perspective. By a “business perspective,” I mean, in many cases, IT no longer knows the company’s business — not the mechanical things like how to enter an order. IT people lack overall knowledge of the industry and an understanding of how to help you grow and manage your business.

Questions they typically have include the following.
* What will make your marketing more effective?
* What do the merchants need to plan, grow and evaluate their merchandise selection?
* How can they help operations become more efficient?

Technology First, Application Function Second
In many companies, IT staffers often look at application function as secondary to technology. Additionally, they hide behind a lot of technical jargon that pushes users away from them.

And systems software vendors are no better. Gone are the days when talented sales and support people really understand the industry. Many barely know their companies’ systems and are unable to demonstrate them without the aid of a support analyst.

The possible results to of all this add up to a collection of negatives.

If a technically advanced system that fits the IT standard is selected, it may be a weak system from a business perspective. Technology by itself rarely gives a strong return on investment.

The IT department’s lack of a business focus means users never make high-level use of the systems in place. They don’t know what applications and capabilities exist in commercial systems or in previous generations of in-house developed systems.

And there still isn’t a partnership between the user departments and IT, which optimizes the full, untapped potential of IT. The company suffers because the rather large investments in critical applications don’t materialize, or they’re years off of the projection.

Now that I’ve laid out the problems, next month in the final part of this two-part series, I’ll provide some tips on how your company can bridge the gap between these groups.

Curt Barry is president of F. Curtis Barry & Co., a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory and benchmarking. Learn more online at http://www.fcbco.com .