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Fiat has a lesson for the business software industry?


Photo courtesy: huffingtonpost.com

Fiat in 2004. Lost money. Witnessed the failure of its new car. Had a staff strike. Etc. That's downhill in most aspects of business. And then Sergio Marchionne steps in as CEO -- the company's fifth in only 3 years.

In Harvard Business Review (December 2008), Marchionne says "Fiat's culture was traditionally dominated by engineers. That has given us some great advantage in developing cars and engines -- we have long been at the leading edge in diesel, for instance. But it has also made us rather inward-looking, and part of a leader's job is to get the organization focused on markets and the competition. In our case, the engineering focus had taken our eyes off our brands, which had been in a long, slow decline."

Marchionne appears to have fixed this and most other problems. Fiat has reduced time-to-market from 48 months to just 18 months. And its bottom line is in the black.

In the business software world too, technology focus creates problems. In this case, problems are experienced by enterprises that invest millions of dollars every year in applications. The software industry has done a fairly decent job of bringing human factors perspectives into application design. However, poor business process orientation continues to result in two of the worst problems: technology silos and poor business-IT alignment.

If you are in the software industry and would like to see where your software practice stands in terms of business process orientation, you might want to take this free self-assessment. You may also want to read a bit about process-centric software development at Columbia Business School's Exec Ed website.

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