Fast Open Systems

You can't have an agile organization without agile information systems. Business operations and information systems are so tightly intertwined now that I'm not sure there is much of a meaningful distinction left between the two. So then, what kind of IT infrastructure best suits the needs of an agile organization?

To answer this question I'm going to use a descriptive phrase that I picked up from (of all places...) a group of finance folks. Yes; I've been associating with the likes of CFOs and controllers and accountants lately. They belong to a group called Beyond Budgeting Round Table (BBRT) and they espouse the radical notion that the days when annual budgets were an effective way to control and guide company spending are now over.

Yes you heard me right; these are finance people (like folks going through a 12-step process…) swearing off the annual ritual that in many cases is the center of a finance guy's life – the annual budgeting cycle and all the attendant power politics and posturing and game playing that go along with it.

I ran into them last spring when I was asked to speak at the annual convention of the Institute of Management Accountants. In spite of myself (I’ve spent many years of my career reporting to and arguing with finance people) I find that I'm in agreement with much of what the BBRT people say.

They say the world is too unpredictable and things happen too fast anymore for an annual budget to be of much use. Instead an organization needs to set certain performance targets and return on investment rates. Then companies need to make money available whenever opportunities come along that meet these performance targets and ROI rates.

They say the traditional annual budget stifles agility and responsiveness because everyone is so fixated on meeting budget numbers that are set in advance and do not change regardless of how the real world unfolds. Significant opportunities are ignored because there is no money in the budget for them and projects that turn out to be irrelevant are carried out anyway because funding has been allocated for them.

These finance people say that an agile company needs “fast, open systems”. This notion of fast open systems does not necessarily mean the systems are made with open source software or generic hardware that uses common standards. What they mean is that the systems are fast in the way they capture and display data and the systems are open in the sense that they are used to share data with everyone in a company.

It is open access to accurate and timely data that people need to be agile, not any particular type of technology. Any kind of system from the most proprietary of packaged applications to the most open sourced systems can be used in an open manner; just as any system (even one composed of open source software) can be used in a closed manner to keep information away from people.

People can be agile only if they know what their goals and operating targets are and if they have the authority to act autonomously so as to accomplish their goals and achieve their targets. And to act effectively, they need easy access to timely and accurate information to guide their actions.

As a CIO I have often had a contentious relationship with finance people (and the recent State of the CIO survey tells me I’m not alone in that regard) so I am wary when around CFOs, controllers, and people with the initials CPA on their business cards. Yet I have to recognize a good idea when I see one. When someone asks me what is the best IT infrastructure to support an agile organization I tell them it is not so much the technology itself but how a company uses it that is important. Companies need fast open systems to be agile.