Hammering the Changes
"If the only tool you have is a hammer, then everything looks like a nail" - as the old saying goes. If you do as most IT folks do, Shapiro suggests, and start developing your enterprise architecture (EA) model by evaluating the technology, such echoes of the past tend to become lost to you. You will only think in terms of technology. When you instead "look at the world from the opposite end, the people end", you can clearly see the effect the organizational culture has and how it echoes all the way through the organization. More importantly, he suggests this approach lets the architect focus on ways to plan the business response to ever-changing market, and environmental and competitive conditions.
The organizational culture can act like an organization's immune system, attacking any new ideas as if they were virulent bacteria and offering formidable resistance to change. "Organizations with a strong culture tend not to take on new ideas very easily," Shapiro says. "Culturally they are not programmed to take on new ideas. Culture surrounds and deeply influences the balance of the enterprise architecture." That is why challenging the information infrastructure and technology (IIT) in an organization is often theoretically easy and practically very difficult - because people keep getting in the way of rational behaviour. To prove the point, Shapiro points to Investec's experience after undergoing numerous mergers and acquisitions.
"The thing that you observe during those mergers is that the target firm often comes up with excuses for why things have to stay the same," Shapiro says. "They say: 'Well we can't change our IT because our business processes are so specialized; until the business processes are changed we can't change our IT'. And then the business process people say: 'Well we would love all to use the same business processes but we can't because we are confounded by the IT, so we can't change the business processes'. The interplay between the people and the IT and the organizations just fascinates me, so I came up with the title 'Hardware to Wetware'. It's about shifting your approach from 'hardware' (IT and related technologies) to 'wetware' (culture, decision making and the business model)."
Shapiro's experiences prove the point. Starting your IT analysis with the information technology architecture and expecting anything of value to emerge other than a bunch of self-satisfied engineers is a mistake, he says. Instead, CIOs and enterprise architects must start with the culture of the organization and work their way through organizational architecture, decision making, information architecture and business modelling until they finally get to information technology.
That is pretty much what he has done as CIO of the Investec Group. Investec is an international specialist banking group, with the network comprising five business divisions: Private Client Activities, Treasury and Specialized Finance, Investment Banking, Asset Management and Property Activities. It is listed on both the London and Johannesburg stock exchanges. Since its inception as a leasing company in Johannesburg in 1974 it has expanded through a combination of substantial organic growth and strategic acquisitions. Today it boasts an efficient integrated international business platform, offering all core activities in South Africa and the UK and select activities in Australia, with approximately 4400 employees in total.
"Investec IT is arranged with a balance of centralization and decentralization," Shapiro says. "In the main, infrastructure is centralized, while applications tend to be delivered by each business in order to allow them to pursue their own target markets. Strategic emphasis is placed on the tasks of architecture, integration and governance. Like most financial institutions we are busy responding to the ever-increasing regulatory pressure from Basel II and MiFID [Markets in Financial Instruments Directive]."
Formerly the group treasurer, Shapiro is now responsible for all aspects of IT in the group. He has held the industry elected position of chairman of the Bond Exchange of South Africa, and ran a consulting practice prior to joining Investec, where he has been for the past 15 years.
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