The Blurred Line Between Business and Technology- Published in www.businessintelligence.com September 2003

Looking at the current state of the art in computing, one could claim that we have come full circle in terms of the use of computing power. A long time ago, computers were large hulking machines used only by system analysts in separate rooms, and the services provided were purely operational – no business intelligence applications at all. Then along came the personal computer, which placed limited computing power in the hands of the business person, as well as workgroup computers that ushered in an era of distributed computing. With a machine on his or her desktop, a business manager could make use of local applications for both operational and intelligence-oriented processing. Applications such as word processors and spreadsheets, made available to a non-programmer, revolutionized the way people did business. However, there was a need for technical support, and the Information Technology department evolved into both a support group as much as a technology review organization, investigating new hardware and applications, etc.

The way that the Information Technology department has evolved has imposed an artificial boundary between those who require computer services and those who provide them. The issue was basically this: Those who could build business applications were not necessarily the best at understanding the business requirements, and those who understood the business requirements were not likely to be programmers. New positions cropped up, such as the IT Liaison, a person who absorbed business desires from the business side and translated those into technical requirements for the IT side. And while the way that these IT personnel were compensated evolved into complicated charge-backs and accounting tricks, it was clear that the division between Business and IT is essentially a budgetary one: IT is a cost center, as opposed to the business units, which are profit centers. But because of this split, there has developed a deeper philosophical division between information technology providers and users that affects the ability to get things done.

Let’s look at an example: At technical conferences, the DBAs and application implementers express dismay at the unavailability of funds to continue project development, while at business-oriented conferences, the attendees are concerned about the inability of the implementers to provide the appropriate support for their business problems. The implementers say, “We want to do such and such an improvement, but our budget has been cut. How can we do this with no additional spending?” The business clients say, “We expected the data warehouse to be online already, but it is a year late and over budget, and still unusable!” The implementers say, “We want to get the project finished, but the requirements keep changing!” The users say, “The business environment continues to change, and what were requirements a year ago when we first planned the project are no longer the same.”

Clearly, what we like to refer to as the “IT Side” and the “Business Side” have aligned themselves in an adversarial manner. This is hammered home by the fact that the IT question I most frequently heard was not about any kind of technical issue, but was some version of “How can I convince my business partner to fund my project?”

On the other side, there is another interesting phenomenon that I have noticed as well over the past few years, and that is the growing knowledge overlap between the IT and Business sides. As business units and IT groups grow their relationships, we find that the IT side gradually learns more and more about how the business works, and the business side has a growing understanding of the capabilities and limitations of the technology. Those involved are becoming members of a new corps of organizational being, the business technology strategist. And as we seek to integrate all that data from the distributed workgroup systems, we are starting to see emerging technologies for collaboration and information exchange and sharing on scales unimaginable thirty years ago.

What I have found through my conversations is that the most successful projects are those where the two sides have laid down their arms and forged a working relationship. The business people now know how the hardware and software works, and the technologists document and learn more about business process modeling and how those processes can be encapsulated within an operational system. This is a growing knowledge management trend that reflects the need for a deeper understanding of how to exploit data and technology to gain a competitive edge.

One aspect of this trend is the abstraction of the business process in a way that enables a quick system implementation of that business process. New ideas such as business rule management, workflow analysis, classification and segmentation, and business process modeling are all parts of this trend - expect to see a growth of these kinds of applications. These applications effectively provide a way to formalize and document the rules associated with the way a business process works, and provide a means for operationalizing those rules. A corollary effect is that when system implementations are defined with precision and accuracy, the overall development process becomes more streamlined and easier to outsource. Unfortunately, the impact of this last issue in the United States has been that application development can be outsourced to other countries, where developer costs are much lower. While systems are being developed at lower cost overseas, the burden of innovation shifts from the programmer to the business technology strategist.

The value to the BI world is clear – when technologists and business clients work together to understand the value of the technology within the business context, the large capital investment in infrastructure changes from being an expensive toy into a critical business function. But the most interesting part is that when technology is being properly used for business intelligence, IT ceases to be a cost center and turns into a profit center! In other words, a distinct value can be calculated based purely on the use of the technology for its business purpose, as opposed to draining business resources.

This happens when the value being derived from the correct application of technology is greater than the costs poured into the technology. Consider the growth of the ROI concept (“Return on Investment”) in the technology world. I have started to see descriptions of ROI and ROI spreadsheets popping up on technology provider web sites all over the place. This reflects the struggle to demonstrate that technology can have more than just a supporting role. What is the implication of this trend? On the bright side, improved returns on BI investment, lowered costs to develop and launch a BI program, more effective collaboration, and more success in acting on the promise of BI. What is needed is increased training within a business environment to create the atmosphere for collaboration – let’s break down those artificial barriers!