Sunday, October 29, 2017

Three Aspects in Running Digital IT as Business

Running IT as business is about focusing on innovation, growth and tangible performance result.

Technology is pervasive, information is overwhelming. Digital Transformation or business initiatives today nearly always involve some forms of technology implementation and information processes. IT can no longer be operated as an isolated support function, the CIO has to proactively foresee, anticipate business needs for information and then prepare and gear up the information systems to not only make readily pertinent information to top business decision makers but also preempt the need and present the value accordingly. IT has to catalyze change, empower users and enable business growth. A good CIO needs to be "commercial" and has some sales/marketing expertise, a great CIO is both "Chief Influence Officer," and "Chief Innovation Officer." For the CIO to help the organization generate revenue, he/she needs to know the business inside out and outside in, and truly run IT as a business.

Make sure the executive team first understands how IT can unlock the business potential to drive future business growth: Companies are recognizing that IT is roughly coupled to the business strategy, and it is a very good sign about how the companies will deliver value. Traditional IT organizations only support business strategy, but running digital IT as a business means that IT strategy is an integral component of the business strategy. It is important to put the framework in place to map the strategic objectives into measurement and then determine what technology investments will accelerate the changes you want to see in your key performance indicators. Most of the executive peers do not have a deep understanding of technology/process while effective CIOs have to know both the business and the technology side of things in order to bridge the gap and improve business-IT communication and collaboration. Innovation happens at the intersection of people and technology. Thus, CIOs should think as an intrapreneur and act as a startup manager, go out and talk with varying shareholders, business executives, customers, partners, to know their pains and gains and understand their tastes and current and future needs. IT can truly be operated as the business when IT spends more time, resource and talent on contributing to the business growth, and become the trustful partner of the business. At the age of complexity, uncertainty, change, and innovation, working with vendors/business partners who have innovation capacity and the good attitude can also open out ideas since they will be looking for business pain and solutions that IT/Technology can drive.

Compelling business cases describe the IT-driven business initiative’s benefits and costs flow: Running IT as the business also means that IT is there to solve business problems large and small, with clear business justification. It is important to measure and validate ROIs, to be as comprehensive as possible in monetizing costs flows, identify and trace through the matter by which IT impacts both the business bottom line and top line business growth. Generally, IT performance is assessed by how IT enables transaction handling, influencing decision-making, and enforcing coordination associated with business processes, as well as building business competency. By identifying and portraying the touch points visually, information and knowledge can be tapped in monetizing an IT-driven business initiative’s benefit flows.


Charge 'forward,' not 'back': Forward-thinking IT organizations not only need to think forward, but also “charge forward.” Usually, revenue improvement is harder to present, CIOs should work to prove the overall contribution, profitability improvements and value IT delivers to the business. Reinventing IT as an enabler of revenue growth creates more interesting conversations around the business. With IT service-on-demand model, they use equipment leasing instead of purchase to truly exemplify what has become known as the “utility” model. Not only do they charge for their services on a pay as you go basis, some IT organizations also apply the charge/show back or charge forward mechanism to their business users. The CIO's greatest challenge is to educate the business on the cost/benefit for each of their alternatives, and together they make the best-informed decisions they are capable of. IT should run a balanced “run, grow, and transform” portfolio that can deliver business solutions designed to maximize opportunities and competitive advantage for the organization. IT should also help the business improve net profit, by reducing the cost of doing business, leveraging right sourcing and sizing, maximizing output, etc., so when the business revenue increase, the operating cost remains the same, the business as a whole improves its profitability and achieve the high-performance result.


Running IT as business is about focusing on innovation, growth and tangible performance result. It starts with IT leader’s mentality as the business executive first, and then build IT competency to catalyze business growth, and capacity to achieve the tangible business result. Ultimately IT can reinvent its reputation from a cost center to a revenue generator and digital change agent.

1 comments:

I enjoyed reading your article. Please make more interesting topics like this on.
I'll come back for more :)

From Japs a researcher from Always Open Commerce

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