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Still Building Shanty Towns

Updated: Feb 6, 2022

Version 2.0

It saddens me to think it necessary to repeat lessons taught over 30 years ago. Back then, companies like DHL and FedEx, led the way in the express parcels business. In many ways, they blazed the trail for global logistics. And today, this underpins the operating models of Amazon and Alibaba.

The strategic value of information is innate to these brands. They treat long-range investments IT the same as investments in, such as:

  • vehicles (planes, trucks & vans)

  • transportation & logistics facilities.

These investments were made with a strong understanding of strategic value. The sort of value that might not see a return in the short-term. But after five years, the impact is clear, delivering growth multipliers, of the order of x2, x3 or more.

Many firms struggle with a strategic view to investment in information technology. They continue to see the IT function as a second-class citizen. A whipping boy whose only function is to serve "the business" masters. rather than an equal business partner along with Operations, Sales and Finance.

The tell-tale signs are piece-meal IT solutions to parochial requirements. These reflect the views of the operation-focused, rather than the strategically focused. This leads to sprawling information systems 'Shanty Towns'. These impede strategic development. And increase the technical debt caused by duplication and repeated rework. These organisations become 'Too busy hand-ploughing to go to the tractor show'. They don't see the need for a joined-up business & systems architecture. And 'architecture' (a path from AS-IS to TO-BE) isn't understood to be a strategic enabler.

I accept that IT departments have, in part, themselves to blame, often too focused on technology. And in the case of enterprise architecture', too focused on arcane frameworks. Frameworks like The Open Group Architecture Framework (TOGAF). Eight hundred pages of business meaningless guff.

IT leaders should learn about selling strategic value from their business colleagues. You can bet your boots they didn't use an architectural framework. With the aid of a couple of presentations and lobbying, they can have an investment in air fleet approved.

It's not good enough to say that IT must only serve the operational whims of. 'The Business'. IT is no longer a 'Dark Art' to be locked away in a box. It goes without saying it is part of everything we do at home and at work. So why is it so often treated as somehow different compared to say, Operations, Sales and Finance?

IT can make a huge contribution to strategic value. It's all down to the right attitude at the C-level (as I learnt from my 11 years at DHL). It starts with the CEO and her leadership team. When they look at the longer-term future, the context is the whole business. The people, the processes and the technology. When this happens, the strategic value of information systems come to the fore. And IT becomes a valued 1st class citizen. Just like it is in DHL, FedEx, Amazon, and Alibaba.

Yours Truly,

A Battle-Scarred Business Systems Architect.


For more about C-level culture change take a look at Padraig's video. BTW he's a DHL veteran, as am I. Full disclosure, I am also a Core Story Partner.

And here's a quick intro to VIPER - a tool we use for building strategic stories.

And finally a great comment from Julian Burnett that sums up the problem:

In some industries where digital disruption and transformation are already well advanced, it is essential that Boards, CEO's and Senior Leadership teams acknowledge the role technology and data play beyond business infrastructure as a driver of competitive value creation and market differentiation. Creating and maintaining strong and evergreen foundational IT capabilities allows those firms that embrace technology and data as differentiators to innovate their business model and enhance customer and colleague experience much more quickly and cost effectively than those that don't. Those firms will experience an increasing drag on their ability to transform and grow their business and will ultimately find themselves slowing in their ability to retain and attract both new customers and new talent. Inevitably when the penny drops for the Board and CEO, there is a big bill and significant disruption required when "slum clearance" becomes the only option to overcome the business limitations that IT shanty towns impose.
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