Is There a Wall Between IT and the Rest of the Company? Part 1 of 2

In the first part of this two-part series on IT departments and the role they occupy within companies, this month I’ll take a look at the divide that often exists between IT and the rest of a company. I’ll examine some of the root causes for these conflicts.

Here’s the picture: A multichannel catalog company with sales of $20 million has an aging order management system that’s been in place for more than 20 years. While there are some things the users like about it, the company has basically outgrown the system. It needs far better marketing information, e-commerce site-to-business systems interfaces, forecasting and inventory management, and the ability to better deal with light manufacturing and tracking sets and kits, which are a major part of its business.

The president of the company authorizes an investigation into the benefits of replacing the system. Immediately a turf battle ensues. The IT department is already researching the Internet for the most technically up-to-date IT platform. The users’ comments are predictable: “They’ll pick the most expensive, technology-driven system out there regardless of whether it fits our business.” There’s a proverbial glass wall between the two groups in many companies.

The outcome: After months of no progress, the president shrinks from his responsibility and says, “We’ll keep the current system.”

Unfortunately, this scene is played out on a daily basis in catalog companies of all sizes. In defense of IT people, they’re often given responsibility for everything from telephone systems to help desk to advanced WMS systems to e-commerce and e-mail systems. Most often they’re underbudgeted. Management backs into a policy of a percentage of net sales that the company can afford to spend. Additionally, the technology is diverse, complex and represents generations of different languages, databases and standards.

Now to the aid of the users. IT takes more of a technological point of view than a business perspective. By a “business perspective,” I mean, in many cases, IT no longer knows the company’s business — not the mechanical things like how to enter an order. IT people lack overall knowledge of the industry and an understanding of how to help you grow and manage your business.