Quality IT necessary for restructuring to deliver value

Summary:New research findings could boost the status of the CIO and cloud computing during business transformations.

The pace and frequency of restructuring and organisational change seems to only ever increase, but business leaders be warned: if IT isn’t part of the process you could be wasting your time and your shareholders’ money.

Success isn't about the amount of money a firm pours into IT either - this is a management issue, according to the academics behind soon-to-be-released research titled "Information Technology Infrastructure and the Performance of the Firm".

The research shows firms with adequate IT infrastructure improve their performance after restructuring, while those without don’t just fail to deliver value but can experience detrimental effects.

The study was carried out across 425 companies in New Zealand and Canada by Professor Benoit Aubert and Dr Val Hooper from Victoria University of Wellington’s School of Information Management, with co-researcher Anne-Marie Croteau from Concordia University in Canada.

"If your data and supporting infrastructure are well-organised and flexible, information will continue to flow effectively, even during a restructure — but to try and implement change with weak infrastructure is just shooting yourself in the foot," Aubert said.

"Part of it is a matter of effort and rigour in ensuring data and supporting processes are correct. It is not just the money a company pours into IT — at the core it is a management issue that large and small companies have to tackle."

The research, still in draft, poses questions about the role of the chief information officer and the adoption of cloud computing before and during business transformations.

Aubert said the implications are significant for the CIO.

"It means that even when change is undertaken in other areas than IT, the CIO should be involved in the change process to ensure that change can deliver benefits," he told ZDNet. "Our results do not mean that the CIO has to lead the change, but clearly [the CIO] has a role in the evaluation of the organisational readiness to undertake the change process."

Cloud computing can contribute "under certain conditions", he said.

"Not all cloud solutions are necessarily scalable, open, and can be connected with other components. However, we can say than they are often more flexible than traditional infrastructure."

Cloud however does not solve issues of data quality and structure. If data is wrong, poorly organised or not able to be shared, it won't help you, Aubert said.

Essential technical infrastructure should be easy to upgrade or scale, enhance connectivity and be compatible for multiple platforms and interfaces, he said

The research uses a broad definition of essential IT infrastructure, including policies, processes and ownership rules that ensure data remains accurate, unambiguous and able to be shared between different stakeholders; rules and standards to manage internal information flows and IT assets; and competent IT personnel who understand the business context of the organisation.

The takeaway for executives of all stripes is simple: organizational changes on their own do not influence the performance of the firm directly. Those changes are brokered through effective IT infrastructure.

Topics: NextGen CIO, Cloud, Data Management, New Zealand

About

Rob O'Neill is a writer for CBS Interactive based in Auckland, New Zealand covering business and enterprise technology for ZDNet. He has previously worked for IDG, The Sydney Morning Herald and Melbourne's The Age as well as various business titles, most recently editing the Business Sunday section of New Zealand's weekly national news... Full Bio

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