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Smart Enterprise: Greater Expectations

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One True Thing he role of the IT organization is changing — and not just because of the emer- gence of new technologies. The business environment that IT supports is changing dramatically, too. For 30 years, IT has focused on automating the formal, standardized work processes of the enterprise, gaining productivity by reducing the need for manual interventions, and force-fitting the business to the infrastructure. But in all that time, IT has never handled the edge cases. Yet increasingly, opportunities for growth and innovation will come from the edge. The edge is where people improvise across enterprise boundaries. They do so to cobble together project teams, development pro- cesses, even supply chains that are not confined within reporting structures or authorized processes. It's time to bring people back into the IT equation. Rather than removing people, the next generation of IT investment must support the people who are left, giving them access to resources and expertise, and helping them to collaborate, wherever they are, on demand. IT investment that merely sup- ports the traditional ways of doing business is missing the greater opportunity to enable new ways of doing business. The new charge for CIOs is to support the experimental, collaborative practices at the edges, and to bring people more effectively into the loop. Of course, IT, like a Mississippi steam- boat, cannot turn on a dime. How then — and where — to make your next IT investment? What will harness the power of the next generation of IT, be flexible enough to meet the changing needs of the business — and align with business results — all while still maintaining the need for access, security and performance that constitute your day job? The answer lies in activities that enter- prise IT is currently not supporting well. Namely, activities occurring at the edge of the enterprise. These are the undefined and emerging practices that require the input of an array of individuals from both within and outside the company. Take exception handling. In the quest for standardization, enterprise IT has cre- ated a vast number of exceptions. These represent situations where business needs deviate from the prescribed policies and processes supported by the IT platform. Exception handling requires identifying the right people; providing them with the nec- essary data, context and analytic tools; and letting them improvise within the boundary conditions of the organization's rules. It is a large operational expense and a source of great inefficiency. New Directions Paradoxically, exception handling is also a place where unmet needs and new ideas for meeting them can germinate, pushing IT practices in new directions. Investments that honor agility and that facilitate rapid human interaction and judgment around the contexts of exceptions can deliver near- term cost-savings. They can also provide a platform for identifying and targeting new growth and innovation opportunities. Social software has already begun to evolve robust capabilities to connect the right people, provide collaboration tools and create records of interactions that yield insight. It could transform exception handling at two levels. First, by accelerating and reducing the cost of exception handling. People can discuss why a work process broke and help resolve it quickly. Second, by helping to document the exceptions, the people involved and the resolutions. Such a repository would be a valuable resource. After all, let us not forget that the engine of business innovation is not in data or flow charts, but in people, in the knowledge and practices and insights and improvisations that only people can provide. In the effort to amplify, rather than impede, their impact, IT has a central role to play. ■ JOHN SEELY BROWN (pictured above) AND JOHN HAGEL are Co-chairmen of the Deloitte Center for the Edge, a Silicon Valley- based research center. They are also co-authors, with Lang Davison, of The Power of Pull (Basic Books, 2010). Message from the Edge Looking for your next IT investment? Start with people. | By John Hagel and John Seely Brown )'('SMART ENTERPRISE 7 T PHOTOGRAPH: COURTESY OF JOHN SEELY BROWN For additional insights from John Seely Brown, read an article he co-authored, "Unlocking Enterprise Agility," on Smart Enterprise Exchange (join-see.com/seelybrown). )'('SMART ENTERPRISE 7

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