Tuesday, May 3, 2016

“CIO Master” Book Turning XXIV: Running IT as a Growth Engine of Digital Business

It’s not enough for IT to only focus on the bottom line “keep the lights on,” it has to contribute more on business growth.

Digital organizations are hyperconnected and interdependent and they have to continue to adapt to the digital new normal with “VUCA” characteristics. Now, everything requires shorter term planning, without giving up the strategic endgame, IT is more often the big influencer of business strategy and the creative driver of business innovation, because Information is the lifeblood, and technology is often the “digital disruptor.” To further expedite digital transformation, how to run IT as a growth engine of the business?

IT leadership needs to shift their management orientation and begin thinking like entrepreneurs: Some IT leaders have no interest in this transition. IT entrepreneurialism becomes a new fixture for management in their efforts to substantiate their competitive position, effect market landscape, and drive new revenue growth. Practicing intrapreneurship in the large enterprise is the right way to reinvent IT as a growth engine of the business and a change agent to build the culture of innovation. Today IT is the wing of every successful business. The paradigm shifts from IT being a reactive, engine room culture to one that is agile and develops the capabilities to drive business growth and perpetual improvement. Profits and then ROI should be the driving force behind any IT project. The IT department provides guidance, support, assistance and direction in the application and adoption of information technology solutions in support of business objectives! IT is the only entity in the organization supposed to understand business entirely and oversight organizational processes horizontally, and pay attention to the change processes under the surface, in order to build change as a crucial business capability via platform approaches and systematic disciplines. A great IT organization can differentiate its organization from the competitors via achieving the desired capability outcome.  

It’s not enough for IT to only focus on the bottom line “keep the lights on,” it has to contribute more on business growth: IT leaders need to encourage their teams to spend more time with leaders on the business side as well as directly with customers, because a high-effective digital IT is about top-line business growth by maximizing ROI to add up overall business value in the second dimension. When maintaining a clear and efficient bottom line, with enough forward thinking to 'plan in' growth, and this dimension allows the IT organization to manage information and apply technology to pour more on the top line. These engagements are leading IT to be much more proactive in proposing - as opposed to responding to ideas for new ways to improve customer service or actually create new customer value and revenue. Also, you have to have some measure to show what value was created. In order to show value, first, all parties need to agree on the common value proposition, then, you need to be able to measure it, if you can not, then you can not show how much value was created or lost.

IT needs to rebrand itself as a business innovation and digital transformation center: IT touches both hard business processes and soft human behaviors. Technology is pervasive, Business Transformation or business initiatives today nearly always involves some form of technology implementation and information management. The information provides the lifeblood for any organization to make a data-driven decision and capture business insight, IT enables all critical business processes, which underpin business capabilities in enabling such transformation. IT has the necessary structure, methodology, and tool in shaping the new box of thinking and managing the emergent digital complexity with the new characteristics such as hyper-connectivity, hyper-diversity, and hyper-dynamism. The CIO needs to play a critical role in such transformation. IT has to become an innovation engine for business growth. IT capabilities directly make an impact on business capabilities, and IT maturity is proportional to overall organizational maturity.

IT Transformation is on the horizon to improve IT maturity: from a reactive support center to a proactive value creator; from a back-office function to an innovation train yard; from an order taker to a strategy co-creator, from a help desk to a growth engine of the digital organization. IT is always at the center of change, and IT needs to speed up and improve its maturity from functioning to firm to delight, and from efficiency to effectiveness to agility.


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