Everyone who has studied companies’ frustrations with IT argues that technology projects are increasingly becoming managerial challenges rather than technical ones. What’s more, a well-run IT department isn’t enough; line managers have important responsibilities in implementing these projects. An insightful CIO once told me, “I can make a project fail, but I can’t make it succeed. For that, I need my [non-IT] business colleagues.” Managers I’ve worked with admit privately that success with IT requires their commitment, but they’re not clear where, when, and how they should get involved.
One way to build a comprehensive model is to place IT in a historical context. Economists and business historians agree that IT is the latest in a series of general-purpose technologies (GPTs), innovations so important that they cause jumps in an economy’s normal march of progress.
The Three Categories of IT
Executives often talk about the revolution that computers have brought about in companies, but, as the IT model I’ve described illustrates, that’s an oversimplification. IT sets off several kinds of revolutions in organizations because technologies fall into three distinct categories.
1. Function IT
(FIT) includes technologies that make the execution of stand-alone tasks more efficient. Word processors and spreadsheets are the most common examples of this IT category. Design engineers, accountants, doctors, graphic artists, and a host of other specialists and knowledge workers use FIT all the time. People can get the most value from these technologies when their complements are in place but can also use FIT without all of the complements. For instance, an R&D engineer can use a computer-aided design (CAD) program to improve the way he does his work without making any changes in how the rest of the department functions. Furthermore, FITs don’t bring their complements with them. CAD software, for example, doesn’t specify the processes that make the most of its power. Companies must identify the complements FIT needs and either develop them or allow users to create them.
2. Network IT
(NIT) provides a means by which people can communicate with one another. Network technologies include e-mail, instant messaging, blogs, and groupware like Lotus Notes. NIT allows people to interact, but it doesn’t define how they should interact. It gives people freedom to experiment instead of telling them what they must do. Unlike FIT, network IT brings complements with it but allows users to implement and modify them over time.
In 2005, investment bank Dresdner Kleinwort Wasserstein introduced three network technologies: messaging software, employee blogs, and a company wiki, a Web site that employees could contribute to or edit without needing permission or HTML skills. DKW’s people generate data, get opinions, and find answers by using the messaging software to contact the firm’s traders and analysts across the world. Many managers write blogs or post comments on others’ blogs. Some DKW directors see the wiki as a way to deal with e-mail overload and encourage their teams to post agendas, to-do lists, and work in progress on the wiki rather than circulating them via e-mail.
3. Enterprise IT
(EIT) is the type of IT application that companies adopt to restructure interactions among groups of employees or with business partners. Applications that define entire business processes, such as CRM and SCM—as well as technologies, such as electronic data interchange, that automate communications between companies—fall into this category. Unlike network technologies, which percolate from the bottom, enterprise technologies are very much top-down; they are purchased and imposed on organizations by senior management. Companies can’t adopt EIT without introducing new interdependencies, processes, and decision rights. Moreover, companies can’t slowly create the complements to EIT; changes become necessary as soon as the new systems go live.