Wednesday, November 30, 2016

"CIO Master" Book Tuning #146 "CIO Master" Book Tuning: Running Digital IT to Harness Business Competency

At a higher level of maturity, IT is the key differentiator, rule co-maker, and business driver.


At the dawn of the digital era, innovation threatens to tear down legacy systems and practices just as it generates new opportunities, IT organizations are nonetheless resistant to change. It's natural to fear the unknown, question the unproven, be skeptical of the latest digital trends and be paradoxical about digital disruptions. However, change is inevitable, in fact, forward-looking businesses are empowering their IT organization to drive changes and lead the digital transformation. The new IT rulebook isn't for the faint of heart. CIOs need to rise above the status quo and take on a new set of activities that have them involved in the strategy development process from the get-go. Because running digital IT to enforce the strategic focus and harness business competency requires thinking beyond, altering or changing the frame of reference to create previously unconsidered solutions, and make a shift from inside-out operation-driven to outside-in customer-focused.

A new emerging theme of running digital IT is the split of strategic contribution and tactical service delivery: Traditional IT is good at commoditized IT service delivery (whatever the sourcing model). With fast-paced changes and fierce business competitions, what companies really need from IT though is the strategic role in strengthening and separated from the nuts-and-bolts work. IT and the business are intertwined but must be on the same page. On one side, IT is driven by the business as a strategic enabler; on the other side, a great digital IT organization also has the vision to be a driver for the business to enforce the strategic focus, open the new opportunities to build business competency and gain long-term advantages. Whether this has the CIO as de facto Chief Improvement Officer, Chief Innovation Officer, or some other mix - this is where the value is generated -IT enables the business to operate effectively and successfully and catalyze it to grow, innovate, and adapt to future needs.

IT provides progressive business solutions with technology as the critical ingredients: CIOs should ask themselves what strategic advantages they can provide to the business and working to have the rest of IT learn the business they're in. Because digital CIOs need to deal with constant uncertainty and ambiguity, they naturally gravitate to a leadership role when things are unknown, things will change, technology is involved, a tough problem has to be solved, etc. Therefore, IT leaders should optimize IT management via the lens of the customers. When IT considers their customer as the entity who buys the company's goods and services, some great things start to happen; IT is no longer an isolated support function or cost center, but as an equal business partner which can bring business value to the top line of the business growth and an innovation engine.

At a higher level of maturity, IT is the key differentiator, rule co-maker, and business driver: It's all about the maturity of the IT organization. With today’s business uncertainty and digital dynamic, A CIO can't just sit back and apply yesterday’s logic or techniques to today's problems, the key is engagement with the business continually and make cross-functional collaboration seamlessly. As the gap between IT and the business narrows, CIOs will be seen as the business, not technology leaders, IT strategy is a critical sub-component of the business strategy, and the “art of the possible” in digital technology influences the development of business strategy, closing the gap in strategy development.  Large, complex enterprises require a multilayered value proposition from their IT organizations. The CIO needs to play a critical role in such a digital transformation.

Digital transformation is multidimensional. The right balance among the elements of an IT organization's value proposition depends on the style and competitive position of the business as a whole, combined with the expected contribution that IT makes. IT needs to become a growth engine of the business, the CIO’s ability to build fundamental business competency is now greater than ever. IT just needs to set the right priorities, adjust to the digital speed, be wired (or wireless) to changes, and take a leadership role in driving innovations.




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