Integrating the silos: Not only an IT problem

Talking about siloed application is such a cliche in IT infrastructure circles that we can sometimes forget one of the main reasons for siloed applications is siloed organisations.

Furthermore, siloed organisations are there for many good reasons – alternatives exist full of matrices and dotted lines but they do not suit every business, nor are without their own problems.  McKinsey Quaterly recently covered all of this in a report (you need to register for free to read it) which focuses on financial services and highlights the particular business drivers which are forcing greater cross-silo integration:

“Yet many [financial services] institutions find the going tough as clients demand—and increasingly expect—integrated services, including (among other things) advice, the raising of capital, and risk-management solutions.”

There is no simple hierarchical organisation that can deliver this level of integration (and this is also noted).  Therefore, the only solution is to promote and encourage strong formal and informal networks – individuals cooperating across organisational boundaries to address customer requirements. I am sure that IT person reading this who is also thinking about SOA will find all of this very familiar.    And SOA clearly supports these human networks at an application level by enabling easy connectivity between the silos.

In fact, most of the report is about how to map these networks and how to identify the good and prune the bad:

“In our experience, more networking isn’t always better—hence the inability of broad forums to add value by themselves. Indeed, one firm we know raised its productivity 25 percent by eliminating interactions that didn’t add value.”

And clearly there is an IT dimension to this:

“One global investment bank, for example, has put a good deal of money and energy into a knowledge-management system that enables managers from different functions and product groups to access expertise and build on existing knowledge rather than reinventing the wheel.”

While I am being a little unfair in picking on this one example in the paper, this point and a general emphasis on top-down enablement jars a little.  I am sure Web2.0 proponents would feel that this is starting at the wrong end:  The “right” end being make it much easier to create and develop networks by encouraging use of tools like wikis and blogs.  This is the right end because forcing managers into the role of informal network creators is clearly oxymoronic – and counter-productive in my own experience.  Furthermore in most cases, the level of informal networks within firms is low and random and therefore requires something more fundamental than ‘getting to know the team across the corridor’ drinks receptions.

SOA itself also requires the same type of human networks of individuals cooperating to support service reuse and good governance.  Again, the wikis and blogs have an important role to play either in parallel to or embedded within registries and other governance tools – but that is a bigger topic for another occasion.


Posted in Financial Services, Imported, organization, SOA.