Change the Technology Strategy – Or Risk Being Left Behind -- May 2008 (Also appearing in the MBA Tech NewsLink)
In a market ravaged by job losses and disappearing customers, the business drivers for the utilization of new technologies to support rapidly changing processes are often at odds with organizational sentiment. When times are tough, capital investments disappear, life-cycle replacements are shelved, and “making do” becomes the manta of survival.
Yet, is this really the best strategy and series of actions that must be taken to survive? How can growth be reinserted into the operational culture? How can this be accomplished when new business and knowledge processes that require technology transformations are not approved or delayed because their foundational catalyst – technology solution sets – are left in the lurch? Is the storied and expected reaction to technology infusions during market rebalancing by executive leadership helping or hurting recovery?
A Call Unanswered
It has been argued that many of the challenges within our industry revolve around the singularities of new technologies, interoperable standards, and a mindset that IT has underserved their management teams. The buzz and acronyms even today permeate our literature as if they were shields to competitors and money in the bank. Our internal teams and advisors advocate loosely-coupled terms such as social networking, Web 2.0 (which is now being replaced with Web 3.0), disruptive technologies, SaaS, SOA, technology ecosystems, viral solutions, and of course object management. Static has filled the ears of executives for years – they have now apparently gone deaf from the noise and the challenge of surviving the “great unwinding.”
Whereas, all the aforementioned are valuable solutions if they are linked and properly deployed for our changing mortgage consumers and competitive differentiation, they cannot be used as panaceas for success. A key contributor for management teams not embracing the messages being repeatedly communicated to them is that they don’t understand the linkage and “value web” contribution these solution sets can collectively make towards both top-line and bottom-line results.
If you doubt the management dilemma, ask yourself how many headlines and business articles that cross their desks contain “the next killer application or solution?” How many vendors appear in their offices and conference rooms stating their solutions are better because it is SOA, SaaS, “e-delivery,” or even because it is “integrated with outsourcing services thereby requiring no capital investment?” Confusion on what to consistently do with limited funding is more important for an internal IT team to address as compared with “new solutions.” Articulating the basics of total cost of ownership, technological ever-greening, and operational returns will ensure that management personnel answer the call for change.
Enter Stage Left – “Orchestration ”
Taking a page from manufacturing disciplines and operational lessons learned our organizational integration of technological advancements must change. For too long, we have been an industry of NIH – not invented here. We are suspicious of new solutions and providers representing both products and services. We often shun the idea of integrating competitive solutions due to the historical chaos that has been experienced and what to do when there is a problem.
However, there are significant opportunities if we embrace the ideas and governance strategies of sourcing “best-in-class” solution sets complete with both forward and reverse supply chain capability. Our providers (e.g., consulting, service, and product) have told us for years that we must keep relationships simple and limit the number of back-office solutions within our delivery mix. This was a correct principle – until recently. With the evolution and maturing of data and technology standards, the choices made available to internal IT and process teams have grown significantly.
With experience as our guide and leveraging those that have already proven this best-in-class sourcing strategy to be a competitive advantage, we must either change our route-to-technology approach or face being left behind. Nimble and flexible interoperability can now be reached, sustained, and adapted with proper planning and oversight. Much like a musical conductor, internal teams will be the “orchestrators” to their organization’s future and their continued livelihood.
Organizational teams must begin to think globally, but act locally. Technology will accelerate its “half-life” replacement requirement resulting in frequent interfacing needs. Contractual terms with anyshore outsourcing providers will no longer be measured in years, but months and there will be many of them governed by common operating level agreements (OLA’s). Business and knowledge processes will continue to materially evolve and the technologies underpinning these fluid needs must be ready to meet the challenge and succeed.
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For the domestic mortgage industry to be revitalized, it must have adaptable technological solution sets. However, it has often been our myopic fixation on the solution of the day / vendor that contributes to a one-off mindset within our management team. The use of “orchestration” represents a fundamental shift in our sourcing and delivery practices – if we choose to learn from others.
It’s a vicious and unforgiving time within our industry. The alarms of technological underinvestment are continuing to reach a crescendo. How will your management team recognize the difference between business as usual versus answering the call for revitalization?
For 2008 MBA entries, click here