Thursday, April 12, 2018

Three Qualifiers for Running a Digital IT Organization

 IT needs to be understood and harnessed by all stakeholders to fulfill its potential and gain the strategic importance as a differentiator of companies.

Information & Technology plays a crucial role in driving changes and making a leap of the digital transformation. IT organizations touch both hard business processes and soft human behaviors. IT management maturity is not based on how many years IT organizations have been around and keep running to support the business; but about how well IT can bring value to the business growth and provide innovative solutions to meet customers’ needs and build business competency. Here are three qualifiers for running digital IT organizations.

Performance excellence: Enterprise leaders are increasingly looking to the IT function for introducing beneficial change into their business models to unlock strategic performance, as well as leverage the latest digital technologies to improve operational performance. Therefore, IT performance needs to well reflect the business value in which IT can contribute both strategically and operationally. IT leaders should be able to communicate IT value via the business lens, relate IT costs to the business revenue stream, and do end-to-end service cost measurement. From IT performance management perspective, typically, CIOs would need to remain on top of various parameters such as costs, production issues -especially business-critical applications, risks, technologies, customers, long-term business transformation, etc. The true value delivered by IT and the business units must be recognizable, tangible, and impact the business result for the long run. The only way to transform IT from a cost center to a profit center is to show a clear link to top executives between IT efficiency/productivity and top-line business revenue growth.

Innovation fluency: Innovations happen because of specific business needs. Innovation often happens at the intersection of people and technology. IT should proactively generate ideas and then work with business partners to take those ideas forward. Information is in fact, the most time intense piece for solving the innovation puzzle nowadays. Thus, innovation fluency is an important qualifier for running digital IT organization. The challenge for IT management is how to get out of the daily burden and spend more resources and time on innovation-related activities. Both explorement and exploitation are parting to innovation management. Innovative IT allows the business to explore new opportunities and unleash business potential. IT executives need to move beyond commodity management and begin to show higher level strategic value and dedicate more resources to innovation. They should keep pondering: Why do innovations happen and who are the strategic partners to drive innovation? How can IT evolve, scale up innovation, put a strong emphasis on empowering people, pursuing knowledge and insight, and finding innovative solutions to existing or emerging business problems? In the end, it is not about technology, but what technology can do when it is enabling and catalyzing innovation and building business competency.


Speed acceleration: IT had the reputation as a controller and often IT was not fast enough to respond to change. The type of speed issues in many traditional IT organizations come from gaps created between IT and the rest of the company or the IT management’s short-term focus of transaction. Digital means the increasing pace of change, fierce competition, and continuous disruption, The multidimensional digital effects provide impressive advantages in term of the speed of delivery and unprecedented business opportunities. IT must speed up because speed matters for businesses’ surviving and thriving; adapting to changes; grasping opportunities for marketing expansion; building new capabilities and gaining competency. If possible, focus on the fastest speed available because that is where the main threat is to competitiveness. IT not only needs to adapt faster within its own department but also needs to accelerate, innovate, and speed up the entire company to make sure IT and business are always on the same page. Information-savvy organizations reach the inflection point to accelerate, and the turning point to breakthrough during the journey of digital transformation.

History reveals that IT needs to be understood and harnessed by all stakeholders to fulfill its potential and gain the strategic importance as a differentiator of companies. The highly visible IT with these qualifiers can elevate its maturity from “controlling to change to innovate,” and from deficiency to efficiency to proficiency.

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