business

Sometimes it’s hard to see how IT and business processes fit together.

So, here’s a simple way to think about it. Let’s start with a business process that happens in the real world. Let’s say we are in a hiring process. We advertise a job, we interview candidates, we make a decision and a new guy turns up at work

Let’s say we have an Accounts Payable process and we get an invoice from a vendor; we make sure it’s valid and then somebody proves it. We then cut a check and send it to the vendor.

Every day in a typical business there are thousands of transactions like these that follow some process or another. In fact, there are so many that we could not possibly keep track of all this information without help. Once we used to do this all by paper. Armies of people were required to write it all down but now we use computers for this and call it information technology, but whatever the tools are we’re doing the same thing.

We are making detailed notes of all the things that happen in the real world. So, for example, at our real estate company Dallas Home Buyers when we hire someone, we have to keep track of the details, we give them an employee ID, we add them to the payroll with a social security number. We set a salary in the payroll system; we update the headcount.

When you look at it, you’ll find a surprising amount of data that’s generated by everyday transactions like these in a sense we’re creating a mathematical model of where we are, with all our transactions the data are the building blocks of the model and it’s constantly changing.

By reducing the detail to numbers, we can manage the vast amounts of data that get generated by our transactions, we can capture it and store it using databases and software programs. Now you never get to see an actual database what we do see is the software that displays the data.  The software allows us to capture it, retrieve it and change it. It run reports and gives us insights into the data.

So, the role of software is to support the process by providing the means to create and maintain the mathematical model but software does not exist on its own. For that we need the other component of IT the, hardware which includes PCs and servers and keyboards and networks and all the other paraphernalia that the guys were the pocket protectors.

It’s a bit easier to see how all this fits together. The hardware supports the software and the software supports the processes. This three-layer model is pretty simple but is a good way to think about what’s going on when you realize that IT is merely supporting business processes.

Then you can start to see that fixing your processes is every bit as important as improving hardware and software. It’s amazing how many smart business people are ready to spend money on improving efficiency with IT projects without getting their processes right first.

I hope this model helps you avoid that mistake.

I’d love to see your thoughts in the comment section.

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