The role of IT

In many, probably most, large companies operating a supply chain, the IT department has years of backlog. The backlog is made of a myriad of glitches, inconsistencies, or fragilities that could be fixed but aren’t. Besides creating vast bureaucratic overheads, this endless series of pointless annoyances demotivates everyone. The supply chain, sitting right in the middle of the applicative landscape, is particularly impacted. Anecdotally, the supply chain portion1 frequently represents half of the whole IT backlog of the company.

The role of IT in your supply chain

Worse, the backlog is frequently obscured by some Grand Transition, typically an ERP upgrade. This is the direct consequence of the Grand Transition being expected to solve all the problems that have been left unaddressed for the last decade. Yet, this expectation is misplaced. Indeed, the Grand Transition, even successfully completed2, half-a-decade later, will have introduced many newer issues, even if it does manage to eliminate some of the old ones.

The Grand Transition comes with two side effects: first, it silences all divisions - except IT - when it comes to software matters; second, it acts as a black hole absorbing all budgets and energy. The second is a consequence of the first.

Due to its very nature, the Grand Transition is highly technical. Nobody - except IT specialists - truly understands the fine print of the migration from one database system to another, and the subtle incompatibilities that exist between the two. Once the other departments are silenced, there is no resistance to channeling everything toward the Grand Transition. Other departments usually play along due to the misguided hope that it will accelerate the Grand Transition. It won’t. The opposite happens: the bigger the budget, the slower the initiative.

Among large companies, this approach has been prevalent for the last two decades. The results are dismal. Companies are still paying extravagant fees for CRUD apps3 that should have been commoditized – via open source – more than a decade ago. The implementation delays have never been longer. Cherry on the cake: performance and responsiveness of enterprise software is still as poor as ever, while the underlying hardware is 1000x more capable than it was two decades ago.

This situation requires a deep fix: the IT department must stop acting like the Grand Architect on behalf of all the other departments. Instead, the IT department must become a coach for the other departments, with an exclusive focus on the infrastructure4, leaving all the rest to the departments themselves with an enabler mindset.

The Grand Architect position is untenable: even collectively, IT can’t know all there is to know about finance, marketing, sales, payroll, production, accounting, transport, planning, compliance, legal, etc. The jack of all trades botches most of the initiatives it undertakes. Every half-backed delivery results in more issues that need later fixing. The generation of backlog is both inevitable and never-ending. As software becomes more ubiquitous with every passing year, the backlog keeps getting more unmanageable every year.

The fix is straightforward5: give up on the Grand Architect and reposition the IT department as an enabler and a mentor for all the software-related initiatives executed by other departments. Putting departments, like the supply chain, in charge of their own software initiatives forces them to revisit their own ambitions: no more scapegoats for the backlog getting out of control. The department owns both its successes and its failures.

However, the fix is almost never implemented.

Repositioning IT as an enabler would mean slashing its budgets by half or more, the direct consequence of a much-reduced operational footprint in the company. This is unacceptable for the head of the IT department whose position often rivals, power-wise, that of the CEO during the Grand Transition.

This would also mean that department heads would have to become accountable for their own software initiatives - or lack thereof. There is comfort in being able to deflect the blame to IT whenever a project goes sideways - a common occurrence in software. It also allows the departments to sidestep the thorny issue of hiring IT talents, which has been a challenge for decades.

Nevertheless, as the enterprise software moves toward SaaS (Software as a Service), the Grand Architect perspective is gradually fading into irrelevance, as vendors take care of hosting, backups, upgrades, etc. Thus, albeit incidentally, department heads are gradually forced into becoming accountable for their software decisions, and the IT department is gradually forced into letting go of its former responsibilities.

Enterprise software arrived a decade late to the SaaS party. I predict it will take another decade for most large companies to transition out of the Grand Architect mindset.

  1. The supply chain backlog takes many forms: shadow IT is rampant, Excel is everywhere, operations / clients / suppliers are kept in the dark, stocks / orders / shipments are not properly synchronized across systems, manual entries reign instead of automation, etc. ↩︎

  2. In these Grand Transitions, there is only one winner: the software vendor spearheading the process. In 15 years, I have never seen any multi-year upgrade bring anything more than thinly incremental improvements. However, I have seen, over and over, software vendors making spectacular returns on those operations. ↩︎

  3. Create, Read, Update, Delete. CRUD apps are the bread and butter of enterprise software. Nearly all the workflow apps and transactional apps are CRUD. ↩︎

  4. Networks, identity federation, operating systems, backups, etc. ↩︎

  5. Until the 2000s, gluing enterprise software over the internet was difficult. Thus, bringing in disparate software and connecting them afterward was not much of an option before the 2000s; certainly not an inexpensive one. Early enterprise systems started as monolith as a necessity, not a choice. Thus, the “fix” presented above only became a realistic option in the early 2010s. ↩︎