Thursday, May 12, 2016

CIO Master Tuning XXX Chart a Course to Optimize IT

Even technology is often complex in nature, IT needs to be a business simplifier and optimizer to improve business agility.

Although information is overflowing and technology is omnipresent, the majority of IT organizations still suffer from the low maturity with the reputation as a maintenance desk and cost center. To compete at digital speed, IT has to transform from a builder to an integrator, from a plumber to an orchestrator, from an order taker to a business advisor. IT management needs to refresh mindset, reimagine IT competency and brand, and reinvent IT as a growth engine and innovation center. How to chart a course to optimize IT and unleash its full digital potential?


Optimizing IT management capacity: Effective IT management means understanding every island of operation and every workflow process. It is about using technology to lower costs, improve operations, and increase revenue. IT is in a unique position to oversee business processes which underpin business capabilities. To speed up business speed and compete in a global marketplace, business unit leaders need IT to ensure the availability and reliability of their business process automation tools/technology, so their staff can function as efficiently as promised, back when they justified the tool purchase. It all boils down to optimizing the management capacity investments with a keen eye to opportunity costs of all the projects involved. It is through this comprehensive understanding that a CIO would be able to identify true cost savings, workflow optimizations, and additional revenue opportunities.


Optimizing IT cost structure: IT is always striving to improve its value to the business. All IT spending must be rationalized against the business benefits. IT needs to continue fine tuning its own infrastructure, applications, and services via consolidation, modernization, integration, optimization, innovation., etc. The approach is to implement a program that like a gardener would prune the tree and nurture the valuable solutions and optimize cost. In fact, many organizations have little insight into their cost structures and who is consuming the assets. They have no idea where they are spending their money on and often assume it is mainly being spent on items which are actually much lower on the list. Some of the "long poles in the tent" tend to be labor; depreciation and new capital spending. Every IT finance group can capture costs, but the challenge is to have visibility and traceability between costs and the assets consuming those costs.Hence, the leadership team needs IT to be the business cost optimization expert for the company, to find creative sources of competitive advantages, to better compete in a global marketplace with optimized cost management.


Optimizing people/performance management: Either managing IT talent or customer/vendor relationship, people are usually the weakest link, but the most expensive investment in IT and business. While IT is pervasive these days, this will come about as more people begin to interact with and understand IT and what can be provided, from discerning customers, demanding top executives to enthusiastic vendors, identify, cultivate, and optimize people management capability via the following fundamental IT principles: first people – then process – then technology in that order. The knowledge or skills acquisition issue is a systemic problem. Optimization is not just about fixing things, but leveraging tradeoff to improve business efficiency, flexibility, agility, and risk intelligence. So first, understand the problem by going to the root causes and then beyond the symptoms. This is because true understanding is a life changing for any decision maker. As when you do understand; you’ll know what you need, and then what will be left is to mainly know how to get it, and then leadership can be applied concretely by showing the direction. If you only fix the symptom, not the root cause, then it perhaps causes more problems later. And that is why our world today; contains, in reality, more problems creators than true problems solvers because trying to solve a problem, by nature will create others. And if you don’t have an optimized solution to each newly created problem, you’ll have very little chances to succeed solving the main problem, because all is connected from a system perspective. The reality is that whatever something is complex (especially in IT), the goal of optimization is to eliminate unnecessary complication, but also encourage desired complexity such as design, or overall business capability management.


Therefore, even technology is often complex in nature, IT needs to be a business simplifier and optimizer to improve business agility, not the other way around. IT leaders need to raise the profile of IT and its importance in modern business today. And IT delivery is about people, process, and technology in this order.




















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