In many posts on this blogsite and across the ebizQ universe, we talk about how bad duplication of systems, services, data, and staff time can be. Bad, bad, bad -- down with duplication.
However, some duplication of systems and efforts may be okay for some businesses. What's important is that the business itself decided that the duplication is okay and fits a business purpose, and the decision wasn't solely left to IT.
I just published a piece in the June issue of Insurance Networking News on IT governance, a concern that is shaping the way IT interacts with the business, and visa-versa.
Jeff Goldberg, analyst with Celent, said governance is essential because "no longer can IT make decisions inside of a black box... In many cases, IT has unilaterally made major systems decisions without thinking about the business implications, such as the purchase of a content management system. As a result of lack of governance, "multiple IT projects end up competing with each other for scarce IT resources."
I also had the opportunity to speak with Brian Abeyta, VP of the IT project management office at AFLAC -- you know, the insurance company with the goose. He described how IT governance has been baked into the company's culture -- from the president on down to line managers. AFLAC's IT governance is led by a high-level steering committee chaired by the US president. At the next level is a "C-level" review board, then, for smaller projects, boards run by line-of-business VPs. Until this board structure was put in place two years ago, Abeyta said, IT staff resources were often consumed with projects that extended beyond their useful life.
Since this article was in Insurance Networking News, it discussed the requirements for organizations with multiple, diverse lines of business, which is the trademark of this industry. The result is separate systems in a lot of different silos, run by managers who don't regularly interact with each other. So that means plenty of duplication. For example, you may find two separately maintained $10-million policy administration systems within the same unit of the same insurance carrier.
Sounds wasteful, and hopefully doesn't drive up rates. But then again, there may be a business reason for keeping this duplication. Many companies may want to keep this duplication because certain aspects of each system provide competitive advantage, or leverage with a vendor that supplies other requirements. What governance enables managers to do is to speak up about these decisions, Goldberg pointed out. "While the business may ultimately decide it is in its best interest to maintain duplicate systems, the important thing is that the business -- and not just IT -- made the final decision."
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