Is IT-Business/Domain Knowledge overrated?
I was reading an interesting article on “America's 400 Best Big Companies” in a recent issue of Forbes magazine featuring “The Best Of The Best” and began musing: is the knowledge of “business domain” and experience overrated in the media and popular IT press.
To set the context for an argument: Most technology consultants, especially management consultants with an IT focus tend to emphasize the need for ‘Business IT Alignment,’ and rightly so. I will not argue against the need for businesses driving IT; business strategy, and requirements do drive much of IT needs. The business needs (aka requirements) for IT systems, in turn are driven by a fundamental business driver: make more money; a.k.a maximize shareholder wealth. Hundreds of books, articles and papers have been published on the topic with a variety of flavors.
No doubt that knowledge of the business domain is as significant as knowledge of technology, and a key success factor for project managers. While Program Managers and leaders will generally depend on business analysts and domain experts for guidance, any knowledge of the functional area will go a long way.
However, my musing was about how overrated the knowledge of business context (and business domain knowledge) is, especially in an offshored context. Because of the complexity of businesses systems, it is hard to expect an individual to gain expertise in the different functional areas in a reasonable amount of time.
And there is the cultural context of business. Let me explain my thought with two examples: Corrections Corp. Of America, featured in the Forbes article that briefly describes the ‘business model’
Crime pays. At least for John Ferguson, chief of $1.3 billion (sales) Corrections Corporation of America (nyse: CXW), the nation's largest privatized prison operator. If there's one thing Ferguson can rely on, it's that criminals are never in short supply and there aren't enough bars to put them behind. Ferguson's 23-year-old firm, in Nashville, Tenn., is the oldest company of its kind. And it has cells to spare. "We have seen this percolating demand for many years that we didn't sense other people saw," he says. "This company has prepared itself." Earnings per share are up 130% over the last 12 months.
Service Corporation International: North America’s largest provider of funeral and cemetery services. [Incidentally, Infosys did some key legacy-modernization work for SCI]. The company’s website says
“Through our network of more than 2,000 funeral homes and cemeteries, we serve hundreds of thousands of families each year at their time of need or on a preneed basis. As North Americas leading provider of death care services, SCI is poised to fulfill the needs of a population that now includes more persons over age 65 than at any time in history.”
Back to where I began musing. Most of us in the ‘white collared’ IT and consulting world would not know the intricacies of a ‘corrections system’ or their customers. Now, who exactly are the customers here: is it the guests of the state [prisioners], the state/Federal Government or both, I wonder? Same is the argument for the intricacies of a funeral / death care services business.
Just a thought: how many Management Consultants / Business Consultants from pure-play consulting firms would have experiential knowledge of the intricacies of the “Business” in the examples above. By the same argument, one could be intrigued about how one would explain the ‘Business’ of the illustrated organizations to an offshore team.
Morbid as the client’s business sounds, an Infosys team leveraged the GDM to successfully implement the program for SCI. One could argue that in the case in example quoted, was more of a ‘technical’ project, migrating applications to a .Net based solution.
Makes one wonder: are “business knowledge” “domain expertise” etc a bit more overrated than needed?
Comments
Extent of domain knowledge required and its criticality to the success of the project would depend upon the kind of engagement and extent of investment of time and expertise from the customer subject matter experts.
Posted by: Raman Rangaswamy | February 22, 2007 12:14 PM
"Domain Knowledge" will, at best, only help expedite the development process in some cases. Within the IT space (including Business Analysts) you will never find "experts" for every domain requiring an IT solution. The approach of working with domain experts employed by the customer, to be able to define requirements in good enough detail for the techies to take over, works better. IT should focus on its core competence - technology - and not try to solve the problem of ambiguous requirements by trying to employ business experts - there will never be enough of them.
Posted by: Amit Rajaram | March 4, 2007 06:54 AM
While your article "Is IT-Business/Domain Knowledge overrated?" has some merit in questioning the armchair domain knowledge of consultants, there is a fundamental flaw in taking an extreme condition (corrections and funeral services - not the usual neighborhood mom-n-pop business!) and making it a generalised sample for comparison.
You might want to take up "common" domains like Banking or Retail, argue the same case and see how much sense the article makes in that context.
Posted by: Ram | March 5, 2007 05:01 PM
Denial isn't a smart strategy. Offshore outsourcers in general are limited in effectiveness by not understanding the business domains in which their work must fit; and they are limited far more by not understanding--and sometimes actively denying--the degree to which they lack such business domain knowledge and its importance.
Programming does not provide value; meeting REAL, business requirements does. Without understanding the business domain, even skilled programmers lack the context to make day-in-day-out decisions that onshore staff do essentially instinctively. The result is lots of dumb little mistakes that outsourcers are often too ignorant and arrogant to recognize, appreciate, or learn to avoid.
In my extensive experience in all facets of outsourcing, I've found that it's often the proliferation of such little mistakes that ultimately undoes many big outsourcing deals.
Posted by: Robin Goldsmith | March 5, 2007 05:55 PM
It sounds like you're saying that a shortage of domain expertise means it should not be sought after. Any project lucky enough to have members with a particular business expertise will be better off if the information is used properly. If the project manager of the cemetary project you mention were asked if he or she would like domain expertise on the project, the answer would be yes. Just because the expertise is not there does not diminish its importance. Hopefully, the days of large consulting companies managing projects with team members with zero business knowledge are gone.
Posted by: Robert Rojas | March 6, 2007 11:03 PM
Glad to see debate on this issue. Agreed that Domain knowledge is certainly a valuable asset in any technology initiative…and there are different dimensions of the domain knowledge itself, whether it is knowledge of business processes in a specific context or awareness of generic business.
To Robin’s point… my musing wasn’t about denial.. it was about the practical challenges which IT folks face all the time: do we wait for ‘business’ to define the ideal requirements all the time?
To Ram’s comment, if we were to take Banking as an example: do you need an Investment Banker or a Teller or a Cashier or a Financial analyst on a “Banking” Project? Maybe all of them if the ‘requirements’ of the project warrant…or maybe some or none of them?
I guess my point has been made: “it depends” :-)
Posted by: Mohan | March 7, 2007 03:50 PM
It appears that your point on "white collared" IT and consulting world is more in context of superficial knowledge of consultants compared to immersive experience of industry experts. While this is true, it is also expected.
A consultant would derive the best methodology by applying his knowledge of the two worlds i.e technology and business and so would the IT solution provider. In the absence of domain knowledge, it would be interesting to see how managers in industry struggle to communicate with IT consultants, who may have no prior understanding of their domain. Knowing domain helps to break communication barriers, appreciate the business need, relate to impact of your system in the overall scenario even when it is not explicity stated. The generalised view of industry domain is not to substitute the expereinced managers, it is an anchor to understand their requirements and viewpoint.
While "it depends" how many number of people with domain skills are required to provide a solution, it is invariably needed... Is this overrated or underrated...? Analysis of failed IT programs does provide some insights...
Posted by: Vikas Ohri | May 7, 2007 03:39 AM