New software and services help buyers assess the IT systems of potential takeover targets.
John Edwards, CFO Magazine
December 1, 2007
To deliver business services most businesses today rely on the flow of data through and across the organisation. However, as described above, most companies have limited knowledge of the 'what, where and why' of the business/IT relationship. One of the main differences between professions like engineering and architecture, and IT, is that for many years they have been fully documented. Like IT, the very complex projects they manage involve many related assets, processes and people. Yet unlike IT, the business and the professionals can easily understand each other, and, generally speaking, they work together efficiently. Why? Because they have simple means of communicating with each other. After all, how could complex things like skyscrapers or bridges be built without blueprints or engineering diagrams? When architects want to join two buildings together, or engineers want to connect a pipeline to a refinery, what do they do? With their business partners they analyse sets of electronic or paper drawings. It is the easy to understand 'big picture' of the business and IT relationship that has been lacking. If every organisation had a standard set of simple pictures, the equivalents of blueprints and diagrams, then 'the state of the target company's IT system' would be obvious and could be analysed very quickly. In my view, IT exists for one reason: to manage the flow of data between business assets. To create simple pictures, and enable business and IT to speak a common language, understanding flows of data is critical. It is the understanding, documenting, and engineering of them which is key to managing complexity. If you take this approach, then techniques used in the Oil & Gas industries for many years can be applied in any sector. In Oil and Gas, the introduction of digital monitoring equipment means flows of product are analogous to flows of data. These flows are displayed, monitored and trended in dollars per second. This means business processes can be optimised around value, and the contribution each asset makes to the cost/value of the flow can be evaluated in business (monetary) terms. Today, business resources (which includes people) and IT assets are either providers of data, consumers of data or provide the conduit through which the data can flow. The role of IT should be to support, process and optimise the flow of data to maximise business performance. If we have a simple picture of how each dataflow moves across and through the assets of the business the responsibilities, roles, risks and costs of every IT resource (or group of IT resources) employed in support of each business activity (and/or set of business activities) can be clearly visualised and, thus, understood. By attaching value meta data to data flows and cost information to IT assets, we can start to assess the ratio between IT support costs and the value of the contribution of IT to the business. Which means IT can speak to the board in the language it understands, that of money. It also means that IT will be fully documented, providing a standard for governance and a foundation for professionalism. By adopting the approaches of engineers and architects, judging the state of a company's IT system will be much more accurate than 'trying to estimate the value of rare artwork.' Paul Wallis, CTO, Stroma Software (UK) Ltd.
Posted by Paul Wallis | December 17, 2007 05:19 pm© CFO Publishing Corporation 2009. All rights reserved.