Tuesday, December 13, 2016

CIOs as “Chief Improvement Officer”: How to Demystify the Triple Puzzles of IT

Demystify the triple puzzles of IT is all about running IT better, faster and cheaper to reach its own potential and improve the overall business maturity.

Digital CIOs have to deal with multiple challenges. On one hand, modern IT plays a significant role in gluing the enterprise puzzle together to ensure the business as the whole is superior to the sum of pieces. On the other hand, due to the complex nature of technology and the exponential growth of information, IT itself is also like the large piece of the business puzzle sometimes being misplaced, because many IT organizations are still perceived slow, expensive, and not integrated with the business. In today’s digital dynamic and technical environment where IT is being used more and more around the globe for revenue generating initiatives, how to run a digital-ready IT as a thresholding competency of the organization via demystifying the following triple puzzles?

Is IT too costly: Organizations invest significantly in IT with the intention to gain the long-term competency. Is IT too costly? That’s debatable. Because the cost is not a good measure in today's dollars. IT is too costly if it only keeps the lights on without adding further value to exceed the business’s expectation. The optimistic view is that technology becomes cheaper than ever these days, IT can just do more with less now, If you break down the costs into functional units, though the overall spend is higher as IT intends to achieve more, the cost has come down. Indeed, the high-performance IT organization has higher performance-cost ratio today than ever. Assume you're going to allocate the cost of IT investment across several revenue generating groups, whatever the cost is estimated to be, they will then need to determine the net increase in revenue at current margins needed to offset the cost of the the business and the management can get a better clearer picture of IT solution from a cost, transparency and complexity level. From IT management perspective, to reinvent IT image from a cost center to a revenue generator, the focus of the digital CIO’s role needs to be shifted from product-oriented to customer-centric, and run IT as the software company, they manage applications as products: with incentives on how much revenue they generate, on customer satisfaction, on strong quality assurance, on market acceptance and on building the business competency.

Is IT too complicated: Traditional IT organizations are often overloaded and understaffed. Too many requirements, too many conflicting priorities of organization do not create an environment for clarity in thought. The root of all lack of coherent thought is in the way to divide work in organizations and make things unnecessary complicated. In the past, some IT departments have done things because it was fun and as IT leaders, you need to see it as a real need that could improve business. IT is complex, but it doesn’t mean IT should add another redundant layer of complication. On the opposite, IT should periodically prune the weed and eliminate the waste via consolidation, modernization, integration, innovation and optimization. IT should follow “Keep it Simple” digital principle and focus on delivering high quality, reusable, consistent services/solutions that support the businesses needs in a cost-effective manner over the long term. IT needs to ensure “doing the right things,” before “doing things right.” After all, if you have a process that is "wrong," the application of technology will simply make getting "wrong" quicker. The pervasive digitization requires both business and technology professionals to rethink how things are done in organizations. The “reach and range” flexibility that now exists removes barriers that have existed in the past. Some of the most elegant systems out there are ecosystems, even they are very complex. Thus, IT needs to focus on ease of use, reduce complication, and keep improving flexibility, scalability, reconfigurability, reliability, interoperability and elasticity.

Is IT too slow: Because the industrial age is considerably static, that’s why many traditional IT organizations were run in the controlling mode, slow to change. However, nowadays, the emergence of potential opportunities for exploiting digitization is likely to follow a nonlinear pattern, even with an exponential speed, as the pervasiveness of an organization's digitization journey increases. Most of IT organizations today have to run bi-modal modes: IT with the average speed to keep the lights on, and the digital IT with faster speed to focus on innovation and digital transformation. The digital world is so information-intensive, technology needs will only expand, and most likely expand hyperbolically. The business professionals request IT to think about the opportunities made available by pervasive digitization and provide the similar technologies or tools that they use in their personal life. Hence, IT has to set the priority right and speed up, do things most important to the business, also educate the business about the potential opportunities and risks in the upcoming digital transformation.  It takes commitment and discipline to stay focused on the real priorities of the business instead of being distracted by what seems to be more urgent on any given day. Run, grow and transform, to strike the right balance in running a healthy IT portfolio and managing a high-performance organization for the long term.

Demystify the triple puzzles of IT is all about running IT better, faster and cheaper to reach its own potential and improve the overall business maturity. The digital paradigm is shifting from IT being a reactive, support desk culture to one that is responsive, innovate, with the capabilities to drive business growth and perpetual improvement. It is important that the opportunity is not squandered, and that maximum benefit is derived from the business.




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