The following posting can be viewed and commented upon on the Supply Chain Expert Community web site.

In this week’s Gartner’s First Thing Monday update, Jim Shepherd pens a somewhat controversial commentary titled Do You Really Need an IT Department Anymore? (Sign-up account required).

In his commentary, Jim argues that since firms expect people to type their own letters make their own travel arrangements and administer their own payroll and benefits plans, is it not time for departments to manage and have accountability for their own software applications?

Jim offers a number of arguments in his commentary. The principle argument is that department managers do not take responsibility for determining their information systems requirements and that a business should be staffed to manage its own systems.  Regarding the obvious question for who will have responsibility of managing overall IT infrastructure, Jim’s argues: “… there are few companies that could really claim that application management or data center operations are either a core competency or a business differentiator, especially since there are lots of options for cost-effectively outsourcing this stuff to organizations that do this for a living.”

Readers certainly may have their own pro or con opinion about eliminating IT and can feed these views back to Jim at Gartner.  However, since supply chain business processes interrelate with many other enterprise processes, the argument of eliminating IT, if embraced, has significant implications for our supply chain community. With that in mind, I will share some considerations for discussion items with the supply chain community in mind.

Before handing over the keys to IT, let us consider the following:

  • Many firms continue to struggle in overcoming supply chain wide functional stovepipes in strategy formulation and goal alignment. Before taking over the keys to IT, should teams first achieve some form of organizational alignment?
  • With IT comes the budget for software investment and maintenance spending.  That may be a pro or a con, depending upon your particular organization’s corporate perspectives.  It could translate to increased innovation and agility for responding to global-wide supply chain business process needs, inserting systems of innovation or differentiation where required.  On the other hand, it could be another budget line-item subject to further supply chain cost reduction efforts.  Either orientation could be applicable. Another consideration relates to which team holds overall P&L responsibility, individual businesses or the supply chain function.
  • What about IT technical skill requirements?  There has been much recognition of late about growing general management and technical skill gaps among various supply chain functions.  Is our community ready to embrace the technical aspects of managing IT applications and business intelligence needs? Here again, some organizations may be ready, some not so ready. We have observed many successful efforts of IT and systems responsibility embedded under the supply chain organizational umbrella.   Some organizations, however, may not be close to ready.
  • Supply chain functional ownership of IT may not sit well with the major ERP providers who have marketing and sales strategies pegged to the career strategy of  CIO and his/her IT team.  Are you ready to deal with the hordes of ERP sales and business development types calling on you to consider maintaining annual maintenance, development or new investment spending? Do you have the patience to accept multi-year promises of promised functionality? Do you have the stones to recommend a dis-investment in any existing ERP application?
  • When applications go down and suddenly stop working, who are you going to call when your team owns applications? Is the fault related to  the IT infrastructure outsourcing entity, the software vendor, the network connection, or an outside hacker attack?  Are you ready to place this determination on your plate?  After all, you have nobody in IT to bug!

Regardless of who owns IT applications, do not presume that ownership of accurate data and robust business process such as S&OP is part of this debate.  Supply chain teams own these, regardless of the ownership of IT.

Perhaps this can be some food for thought and conversation over beer and burgers during the 4th of July weekend.

Feel free to chime in with your own viewpoints and do not forget to sign-up for that management development course: How to Manage IT in Five Easy Steps!


Bob Ferrari