[Am-info] IT's Role In Keeping Companies Honest

[Fred A. Miller]

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IT's Role In Keeping Companies Honest

When an accounting scandal rears its ugly head, all fingers point=20
to the financial officers, the CEO, and the auditors. But=20
Stephanie Stahl asks, "What's the role of the business-technology=20
manager in preventing corporate misconduct?"
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** Business Technology: Exposing The Shell Game

We all know the roll call by now, and however close to or distant=20
from these companies any of us happens to be, I'll bet the names=20
evoke similar feelings of anger, disbelief, and even nervousness:=20
Enron, Tyco, Global Crossing, Adelphia, WorldCom, Arthur=20
Andersen, and others. What flaws torpedoed these companies that=20
were not so long ago admired and highly valued? What can the rest=20
of us learn or re-emphasize?

Part of the answer has to be that in an age where the utility of=20
information is increasingly realized when it's made visible to=20
more people, these companies chose the opposite path, one filled=20
with shell games and mirrors and smoke. Or they thought that by=20
destroying paper on which information was printed, they would=20
destroy the information itself or perhaps even the reality it=20
expressed. Have we really learned so little over so much time?=20
About 400 years ago, using eye of newt and toe of frog and wool=20
of bat and tongue of dog rather than FASB permutations and=20
multimillion-dollar financial systems, Lady Macbeth and her=20
witches knew that sooner or later, no matter how many oaths they=20
chanted and cauldrons they stirred and bodies they buried, "the=20
truth will out."

Let me offer an example with two key points: First, the power of=20
information is in its visibility and thereby its ability to be=20
leveraged, enhanced, and acted upon; and second, that=20
business-technology managers today have to hold themselves=20
accountable for getting the information out to the places where=20
it can be most effective.

In this case, New York has about 20,000 restaurants, and the=20
city's Department of Health has about 80 restaurant inspectors.=20
The problem was how to reduce the number of people getting=20
food-borne illnesses. Hire more inspectors? That only chased the=20
problem, but it didn't solve it. Raise the fines for=20
noncompliance? Been there, done that, didn't work. More-frequent=20
inspections? That meant each one was less thorough, and that=20
effort also failed to increase compliance.
So a couple of years ago, the department applied the lever of=20
information visibility and jumped outside the inner circle of=20
restaurants and inspectors and went directly to the dining public=20
by launching a publicly accessible Web site listing all of the=20
restaurants that had failed inspections. As you can imagine, this=20
caused more than a little heartburn among NYC's hash-slinging=20
institutions, which railed that such a public disclosure was=20
unfair, unreasonable, un-American, and worse. But with the site=20
getting an average of 20,000 queries per day, the restaurant=20
owners had a decision to make: either work harder at complying=20
with the Health Department's regulations or bank on the hope that=20
people will knowingly go to a restaurant that's unsanitary,=20
unsafe, unsavory, or some stew of all three.=20

Mike Corcoran, chief marketing officer at Information Builders,=20
the NYC-based software company that helped the Health Department=20
launch the site, summed it up: "Putting this information out in=20
front of the public gives the restaurants the power to police=20
themselves--they can choose to either change their behavior or=20
face the possible consequences." The results are unmistakable: In=20
the first year, the number of NYC restaurants failing inspection=20
was reduced by 50%, which translates to a whole heckuva lot less=20
food poisoning.

All those giant billion-dollar companies at the top of this=20
column--as well as all of the rest of us--could learn a lesson=20
from NYC Health Department CIO Ed Carubis: "Our philosophy is=20
about better transparency of information in government, in being=20
accountable to the people we serve, and in giving them the full=20
disclosure of what we do," in part by making available to that=20
public "useful and appropriate information they can use to make=20
fully informed decisions." In this specific case, he said, the=20
result was "the restaurant owners realized, 'We need to be=20
smarter about what we do.'"

"In the end," Carubis said, in what we can only hope rapidly=20
becomes a more pervasive business outlook, "it's about=20
accountability to the public." - Bob Evans is editor-in-chief of=20
InformationWeek. E-mail him at bevans@cmp.com. You can join in on=20
the discussion about this column at:
http://update.informationweek.com/cgi-bin4/flo?y=3DeHwU0Bce7K0V10NvU0AZ

- --=20
Fred A. Miller
Systems Administrator
Cornell Univ. Press Services
fm@cupserv.org, www.cupserv.org
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