DCA REVIEW Resilience & Operational Best Practice
Agility matters more than technology
CHANGE HAPPENS. Throughout the history of mankind, not just in London data centres, technology has been the main driver of change. Things that were not possible become possible, and those that make them happen gain an advantage over those that were complacent. That is true of today’s fast moving data communications world. Consider, for example, the way that Nokia went from becoming the world leader in mobile handsets to just another subsidiary of a US corporation. But it was just as true hundreds or thousands of years ago. The tribes that developed stone axes out- competed those that did not when they went after the same food. Then they themselves were out-competed by people who added tin to copper, invented bronze spear tips and could then kill mammoths. Technology change is the way of the world; it’s just faster in today’s wired data centre world. And (to paraphrase Charles Darwin), the winners are not those with the best technology, but those who adapt best to changing technology.
The biggest change of our times is the invention of the computer; its miniaturisation and reduction in cost to almost nothing at all. From that flowed modern information technology, London data centres and car
By Roger Keenan, managing director, City Lifeline. engines that no-one can repair at home. Many, if not most, businesses are their technology and their information assets and very few businesses today would survive for long if they lost those assets. Information technology is no longer something peripheral that the CEO can delegate to the CIO. Information technology is the business and it needs that level of attention and understanding from the CEO.
“Servicisation” is a clumsy word, but it concisely describes an IT-based movement from making things to providing customers with a service which is more valuable than a product. MAN, the German lorry (truck for US readers) maker is an example. Faced with cheaper and successful Far Eastern competition for manufactured lorries, MAN looked at what their customers really wanted. They concluded that the cost of the lorry over its life was less than 10% of the total costs, but that fuel, repairs, drivers and insurances were more than 90%. So they re-focused the business away from making things to providing a total service, based on detailed real-time operational monitoring and analysis in a data centre to help the customer become more profitable. The factory still makes lorries, but they are only a part of the customer offering. MAN used information technology to entirely change the business model, rather than just waiting to be overtaken by cheap competition. It’s not the technology that matters, it’s the ability to foresee, change and adapt, and it can only be done at CEO level. Although it’s about technology, the CIO cannot deliver such change on his own.
Even in insurance, already an ultimate service industry, information technology adds value to extend service offerings. The Co-operative Insurance company in the UK is an example. The Co-op pioneered smartboxes in cars for young drivers, or for anyone whose insurance profile earns them high premiums. The smartbox measures speeds and accelerations in real-time and sends those back to a data centre, where they can be analysed and good driving behaviour rewarded with lowered premiums and bad behaviour reported to parents with
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increased premiums. Annual premiums become quarterly premiums, but could be any timeframe, including real-time premiums. Again, it’s all about the technology running in the data centre, but such a technology change can only be made from CEO level. The Co-op led because it was visionary and agile.
Organisations respond differently to threats and to opportunities. Often, larger organisations are so inwardly focused on their own internal issues and politics that they fail to see the big strategic picture and they often dismiss the few insiders who can see it, as trouble-makers. Twenty years ago, if you had asked who the largest music company in the world would be twenty years on, almost everyone would have produced a list of music companies – EMI, Virgin, maybe even Sony. In fact, the answer is Apple. The largest music company in the world is not even a music company. Now how about banking, one of the major users of modern information technology and data centres? Is there any reason to believe, that, twenty years from now, the largest bank in the world will be a bank?
And does anyone consider banks to be agile and adaptable organisations with strong strategic vision? The computer, the microprocessor, information technology and the data centre are the industrial revolution of our time. But it isn’t the technology that matters, or that which will decide the winners and losers, or who will get to eat the mammoth and who will starve or be eaten. It’s the vision that organisations have of the way they can use the technology and their flexibility and adaptability in the face of change. Agility in using technology matters more than the technology.
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