High-Mature IT ~ Future of CIO

Tuesday, April 21, 2015

High-Mature IT

11:56 PM Pearl Zhu No comments

The Focus of digital IT needs to provide business capabilities, not just services or solutions.

Information is the lifeblood of business and digital technology is more often the innovation disruptor. However, the majority of IT organizations still get stuck at the lower level of IT maturity as a back-office support function and cost center, how can you change a commodity into an innovative source of business performance? How can you run IT as a digital innovation engine? And how to improve IT maturity from a reactive service provider to a proactive business partner and beyond?

Identify the gaps for IT to reach clear business goals: Start looking for those things that are needed vs. what you think is needed. There may be a huge difference. Also, look at what people are doing vs what they say they do. There may be disconnects. What are the pain points in the system? The IT group may be in a unique position to make positive changes. Where IT projects have failed to measure up to business customer and stakeholder expectations, improving customer satisfaction and achieving the desired changes in business process and methodology through the most effective use of available technology. Also, it is still failing to address the root causes of project failure, poor communication, and unproductive working relationships. In order to provide innovation, you need to know at least what needs those innovations will meet and how to implement them effectively.

IT as business enabler should reach clear objectives: Aligning expectations among all stakeholders from the earliest stages of project conception through to commissioning and operation is critical. There are two main sources of misalignment between what customers want and what the IT department provides, whose effects compound one another; IT with internal functions and internal functions with end-users (Operations). Expectation alignment is the foundation of communication and productive working relationships are essential for effective project execution. It enables the Project Brain, a model of dispersed authority and accountability that yields very tangible savings in time and money on IT projects of all sizes. IT as a business enabler and catalyst should achieve such business objectives:
(1) a pervasive appreciation throughout the enterprise, particularly executive-level management, for adequate, accurate and timely information knowledge as the basis for decision-making.
(2) the ability to evolve the IT system at the pace of business need to provide such knowledge while reducing the cost of the IT asset.
(3) the ability to capture the latest digital technology trends for catalyzing business innovation.

IT as a business partner: What C-level execs really want is a partner, someone who knows what they want before they know themselves, who innovates by understanding the business, as well as what they do; the partner that works both "on the business" and "in the business," not just "for the Business." Harness the communication by exploring the root causes of poor communication and ineffective management. Part of the situation is that the types of services the IT group is providing is being defined as a priori and hence limiting the directions you can take it. It might be worth doing a little design work and start doing observations and analysis for poor communication and management ineffectiveness.
(1) First, middle managers for internal functions have been chosen because they were good technicians, not managers. They lack training and experience to effectively build and coordinate teams. They rarely delegate and they rely on command and control approaches. Senior management poses unreasonable demands on middle management, lacking any stable criteria, so middle managers are unable to organize their activities, coordinate and/or prioritize.
(2) Senior Management is replaced every couple of years, as a political decision. They usually approach their new positions by focusing on the short-term, imposing their views without first exploring and learning what mechanisms are in place.
(3) Lack of cross-functional communication to work collaboratively with the colleagues outside of IT in your business to develop a corporate strategy, not just IT strategy for its own sake.
(4) It seems to be a deep, cultural problem: from an organizational design perspective, how might the organization change so its culture prioritizes employees, customers, and shareholders, instead of having a single strategic focus --> bottom line. A deep problem requires an even deeper solution. Nothing short term.

The Focus of digital IT needs to provide business capabilities, not just services or solutions: One of the key aspects is that IT is seen as a service provider by business entities within the organization. Furthermore, a large chunk of IT expenditure (projects) is funded by business entities. This is where the wheels fall off because there is no interest to achieve system efficiency, effectiveness, and agility, resulting in limited IT ability providing value. The focus is to provide business capability (both necessities and competencies), rather than smart solutions. With a multi-national organization, the IT disaster increases exponentially. This is due to the fact that there is a limited attempt by business to really understand what they really want, how system dynamics impact their requirements, IT resources have limited ability to question this. The only way forward is to enhance collaboration within and beyond departmental boundaries to leverage knowledge in the organization.

In traditional organizations, most of the software have been developed or extended in-house, and ate a lot of time; and it is reasonable to keep a mixed approach between in-house and subcontracted resources, which is the current approach of the organization and has worked reasonably well in the past. In addition, there are the next generations of digital natives who have technology integrated into their lifestyles. They demand it from their employers. Therefore, in order to attract top talent, you must be up to date on your technology, and IT must provide users with technology to work and collaborate. So digital IT enables collaboration. There is so much written about how technology enables collaboration drives innovation. This can, in turn, decrease product time to market, decrease the onboarding time for new employees, and increase the knowledge base of an organization which will enable that organization to deliver more value and innovation to customers faster with agility.

There is no doubt IT plays a more critical role in both improving business bottom line (keeping the light on, efficiency) and top-line growth (innovation, capability building, and agility). However, there is no one size fitting all magic formula on how to run a high-innovative and high-mature IT organizations, due to the varying nature of organizations and business dynamic, IT leaders have to follow the logical steps to identify the gaps, create a solid strategy with innovation as key components, and build a set of digital capabilities to improve business competency.