I have waited patiently to comment on Nicholas Carr's book "Does IT Matter?" and this month seems as good as any. This book, which started with his Harvard Business Review (May, 2003) article, must be the most villain-ized book for the IT professional. Unfortunately, it captures the general feeling for senior managers of large organizations, especially for those managers that have not taken a deep dive into the fundamentals of competitive advantage. Competitive advantage is the process of developing products, services, processes and capabilities that give an organization a superior advantage over other organizations. Those of us who find safe harbor in the world of information technology may fool ourselves in thinking that we don't have to worry about competing with other groups. Over the past five years, that has changed with the advent of outsourcing, overseas sourcing, consultants, contractors and multiple business unit technology groups. We will take a look at a few of Mr. Carr's assertions and describe how they impact the world of meta data.
IT is primarily a transport technology, and because it is open to everyone, it offers no advantage.
Not too many people can argue against the trend that technology is faster, cheaper and more standardized than in the past. Can anyone build and implement a meta data repository collection? Of course, meta data adds value not by the fact you could build it but rather that you did. You would then realize that success in meta data is not about purchasing hardware or software, but success is determined by the content and usage of the information held within. Repositories add value by improving the management of information about our technical assets, and any consistency and standardization we can make benefits the organization as a whole. To quote Daniel Gross from SternBusiness, "The fact that information has replaced physical assets as the driver of value, leads one to believe that the management of those information-based assets is critical to the future growth of business."
IT has lost its strategic value.
Mr. Carr argues that IT can no longer be strategic because it is no longer a scarce good. This indicates that profit margins on IT-related investments disappear very quickly. Does meta data have a strategic value? Most organization's competitive strategy will fall under five different areas: cost leadership, differentiation, innovation, growth and alliances. Can meta data help any of these strategies?
Cost leadership strategy enables an organization to become the lowest cost producer of products and services in the industry. A firm may also help their customers and suppliers lower their costs or increase the costs of competitors. One of the major benefits of meta data is to reduce the cost (time) of a business process by cataloging and documenting the current state of affairs. Any major upgrade in software or enterprise integration will occur at a lower cost since much of the current state is clearly defined and documented. Examples might include the capturing of your systems and interfaces through out the organization. This would ease the pain and cost of implementing an EAI strategy because knowing what you have and how it is being used is the first step. You can also use meta data to lower the cost of suppliers by standardizing on EDI or a particular XML standard. Simply tell the vendor you are utilizing an XML schema and pull it right out of your XML repository. Meta data is the foundational element of reuse, and reuse drives costs down. For example, in a recent issue of InformationWeek, "GM already has a platform in place to take advantage of the parts models that are or will be stored in the database. Using UGS Corp.'s PLM Solutions Team center design and product life cycle management software, it can plug existing parts data into evolving vehicle designs; after searching a parts library, engineers will be able to make changes to those parts as needed to fit the overall car design and automatically test for manufacturability, quality and other features. Around the globe, roughly 10,000 CAD files are synchronized nightly among GM designers and partners at 15 major design centers. That system already has helped reduce the engineering cycle time from 48 months to 24 months and, in some cases, to 18 months. GM also has saved hundreds of millions of dollars in engineering costs" (InformationWeek). Another meta data, reuse and asset management success story.
Differentiation strategy develops ways to differentiate your organizations product or service from the competition. You may also reduce the advantages your competitor already has by implementing technology quicker or at a lower cost. With all of the talk of a global worldwide Web service catalog, where is it? For the first company with a tad bit of pull in the market place, a robust, functional internal Web service repository will create a competitive advantage. If the catalog is exposed to the outside world, then you will generate a competitive advantage for your organization. (Only for a short time of course).
Innovation strategy allows an organization to develop new ways of doing business as the Internet has shown us over the past few years. This strategy may create new products and services or make radical changes in the business processes. We have learned over the past 5-10 years that buying or developing software (CRM, ERP, EAI) is easy but implementing into the web of legacy applications and modifying business processes is difficult. Making radical changes in business processes with information technology is nothing new, and it continues today by cutting costs, improving quality and improving customer service. Meta data allows you to manage your portfolio of IT assets in a manner that enables you to take advantage of opportunities in an evolutionary way. Can you image trying to invest in real estate and not know your financial portfolio? Of course not, managing your technology portfolio with meta data allows you to take advantage when opportunities present themselves. Pssst, want to see our collection of Web services?
Growth strategy expands the company's capacity to produce goods and services, expanding into global markets, diversifying into new products and services, or integrating into related products and services. Managing growth and expanding markets requires an agile organization. Agility is the ability of the organization and IT infrastructure to adapt to the changing business demands and processes. Meta data can enable this dynamic service-oriented architecture (SOA). Meta data, Web services, common services, XML and many other technologies enable the SOA and the greatest of these is meta data. Remember, the others are optional while meta data is not. Having meta data is not the question, the question is will you manage it or will it manage you.
Alliance strategies establish linkages between other organizations that include customers, suppliers, competitors, consultants and many others. How you manage this relationships is one of the newest areas of interest in the world of meta data. Cataloging your assets is critical, but the next level of defining the relationships between those assets may the holy grail of meta data. Linking your business with other businesses will require Internet-type technologies that will be driven off meta data and the semantic relationships defined within.
Is meta data strategic in nature? Yes. The reality is that information technology continues to get more complex. Our ability to manage these technologies and solutions requires a higher degree of knowledge and management skills. In the dynamic environment we see emerging, command and control style of management fails to deliver a competitive advantage. As a wise man once said, "All great things have been in done in spite of management." Our ability to adapt within the technology community may be dependent on our ability to handle multiple tasks, objectives and strategies which can then change on a dime. Meta data plays a central roll in your organization's ability to become an agile organization. Moving to common infrastructures, software platforms and even systems does not negate the competitive advantages that technology and meta data can bring.
I encourage you to read Mr. Carr's book and, while you might not agree with his ideas, we can't argue that our industry isn't under rapid redefinition. Perhaps Machiavelli said it best in The Prince that, "There is nothing more difficult to take in hand, more perilous to conduct or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new."
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