Structural Transformations a roadblock for IT landscapes?

It must have been about 10 years ago when a CIO told me that a strategic business decision (a sale of a business division) could not be executed due to the IT department. His company had decided to re-focus on its core business and as a result the decision was made to sell a business division that was no longer "core business". He explained that during the due diligence it became obvious that the carve-out of a part of the organisation was actually not possible without huge costs and a lot of time and resources. The final results was that the buyer withdrew his offer and that IT got blamed for "hindering" strategic business decisons.
As a CIO you rather want to avoid this kind of situations.


Although it is not uncommon that IT is not able to execute this kind of business decisions. Businesses evolve. Strategy get new dimensions, priorities are redefined and the business environment changes. It happens in nearly all business over time. Just think about M&A, carve-outs, value chain transformations, outsourcing of business processes like HR payroll or transportation, re-organisation in a line-of-business, setting up of shared service centers for finance and admin, ....And then I am not yet talking about compliancy related changes like the introduction of a new currency (Euro) or IFRS account standards.

IT landscapes and architectures are often designed to meet the business requirements at a certain moment in time. As the business evolves and transforms, the IT organisation is struggling to adapt system landscapes in an adequate and timely manner to these revised business needs. This is not easy for IT, as these kind of transformation are common but yet to a large extend unpredictable. So we need flexibility or ability to deal with these situations in an efficient way.
Not only homegrown solutions but also Enterprise Application packages have the reputation to lack flexibility to adapt to these kind of Structural Transformations. Homegrown solutions have architectures which are build to align with the business requirements at the moment of design. ERP or Business Applications like SAP are configurable, but once a choice has been made, it is hard to change (it is like concrete: solid with steel in it to make it reliable; but hard to change as soon as it is dry ...). It is clear that many applications have an issue to handle these kind of transformations in a straightforward way. Problem. Especially if one reads in a study from BCG that a large amount of IT project budgets are going into transformations; especially transformations which are structural and initiated by business. The life cycle of a business application eventually comes into a transformation stage (after initiation and operations phases) due to need for re-modelling or business evolution. This is the area where most System Integrators will suggest you to "re-do" the job. Re-visit your business requirements, think about a new design, develop a new architecture and start from scratch.

This can not be the only solution? Imagine that we would decide, due to new and evolved "living" needs, to "rebuild" a city like Paris from scratch. Take the city down and start over. I am sure it would look different; completely re-think choices and do certain things in an alternative way, avoid "mistakes" which have been made in the past and adapt the new architecture to the evolved needs and expectations ... Sounds nice, but is not realistic. Same with Enterprise Application landscapes. Starting from scratch is not what one needs to do. It is just too expensive, time consuming and not realistic.

But what to do then? See next post