Monday, January 7, 2013

Is IT "Order Taker" or Rule Maker?

 IT value proposition is multi-layered, multi-dimensional and situation-driven.

Modern IT faces many dilemmas, meets a lot of paradoxes, gets misunderstood and experiences frustration, what are effective IT value propositions? Order taker or a rule maker? Cost center or value creator? Whatever balance of the value proposition is most appropriate depends on the style and market position of the enterprise as a whole, the roles of the IT organization is being pushed forward: 

1.    Order Taker

This is when IT organizations are often in businesses or business units where IT offers little or no competitive advantage. If there was one benchmark as to whether or not IT ends up as an order taker. It is who IT considers their customer. When IT departments that are set up as a shared service, and consider their "customer" the person in finance, marketing, etc., they end up as order takers and are constantly fighting the "why don't we just outsource IT" battle.

Is IT an order-taker? If the Help Desk mechanism - whatever it may be - is a glorified 'To Do' list, then, Yes. If the organization is strictly tactical, then Yes. If IT leadership is not called in to address strategic objectives until the deadline is already set, then Yes.

Unnecessary overhead: If IT department is reduced to just an order taker, you have effectively become a commodity or being thought of as "unnecessary overhead" as well.

2. Business-IT Partnership

IT must be seen as a trusted partner, an enabler in the overall service/solution. If not, you're doing it wrong. In this scenario — IT organizations need to maintain their value in an environment of increasing growth and complexity of their business units. IT organizations must deliver business support and technology innovation in mature, operationally focused businesses. The business or business unit they work with will be facing stronger, global competition.

  • IT has multiple customers: IT should think twice of the term "customers" to refer to internal users, otherwise, it is creating barriers - the good relationship model is "working together" peer to peer. Just wondering - how feasible and practical it is to "jump" in-house business departments and start catering directly to external customers.
  • Outside-customer perspectives: When IT considers their customer as the entity who buys the company's goods and services, some great things start to happen; CIOs should ask themselves what strategic advantage they can provide to the business and working to have the rest of IT learn the business they're in.
  • Is IT still an order taker? If the technicians and analysts are allowed to ask "what is it that you are trying to do?" instead of just doing, then-No. If the IT organization is involved in establishing the strategic plans, then-No. And if the IT leadership is privileged in, and actively participant in, setting the business objectives, then-No.
  • Changing IT away from the order taker role is more than about semantics: IT will always have a role doing internal support. The trick is separating the internal actions so they run on "autopilot," and having the CIO focus on managing a portfolio of strategic projects that have a quantifiable business return.
  • IT has the power to say “NO”:
    (1) IT can say "no" to another internal business unit if something is not in the best interest of the company
    (2) Things IT does actually be tied to real revenue, not charge-back gimmickry
    (3) IT is forced to learn the company's products, markets, and strategy, or they can't play in this space.
  • Information Technology should be an integral part of any organization. The idea that they are an internal service organization,  or otherwise separate from integrated business practices of the organization alienates the IT professionals from the rest of the organization. This has LONG been one of the major problems. Separate functional units, not integrated into the organization/management structure, business processes, and strategic planning, it is why there have always been disconnects between IT and so called 'user departments'. They aren't users, they are co-workers!
  • In order to become a 'true' partner, IT has to do two things that it has done poorly:
    1) Marketing
    - the executive team and the board need to understand the value created by IT. Equally, educate the executive team about 'newer' technologies, dispel myths that abound in the media and provide a good rationale for how technology can create value for the business. 
         2) Address 'The Long Tail' - that is, get beyond just the top strategic initiatives and figure out how to also address the needs of smaller groups. The next big strategic breakthrough may well come from one of these long tail projects. And having lots of customers in your corner cannot hurt the cause.

  • Elbow-Elbow Relationship: Having individuals who build relationships from IT into the business, creates a kind of disintermediation between senior IT leaders and senior business executives. This shift requires real elbow to elbow work between IT and the Business to capture, structure and communicate business intention in a way that becomes valuable to both parties

3. Value Creator, Rule Co-Maker, Business Driver

At a higher level of maturity, IT is the key differentiator, rule co-maker, even business driver. As the gap between IT and the business narrows, CIOs will be seen as the business, not technology leaders. Here, IT organizations must deliver business transformation, as well as technology support to market-leading, growth-oriented businesses or business units.

  • It's all about the maturity of the IT organization. The right balance among the elements of an IT organization's value proposition depends on the style and market position of the business as a whole, combined with the expected contribution that IT makes. Large, complex enterprises require a multilayered value proposition from their IT organizations. 

  • Enterprise IT organizations are likely to be winners on the whole—if IT begins preparing now. Their importance to the enterprise will increase, as the depth of their relationships with users throughout the enterprise. IT professionals themselves provide services to internal or external audiences, they may broker services on behalf of the enterprise, or they will qualify a provider's ability to meet complex enterprise needs. No matter which roles IT professionals fill, they will remain indispensable because the enterprise's dependence on IT will only increase.     
  • The Arrival of Capacity & Capability on demand will change the structure, organizational mission and skill sets of enterprise IT.
    (1) Service management, architecture and other “generalist” roles will replace technical specialist roles.
    (2)  IT mission will change from delivery of IT to acquiring and possibly developing business capabilities.
    (3)  IT professionals will deepen their expertise in sourcing, vendor management, and data acquisition and management; via the cloud, they will support collaboration across enterprises and communities.
    (4) IT KPIs, which rolls into the business key performance metrics, you can now create a true business equation with IT as a contributor or success factor to the business.
  • Value Creator: Have a seat at senior management table when IT made presentations showing how new technology advances could impact the industry and what competitors were doing better, or planning. That is impacting on strategy positively and handled right you can have a large influence on the orders you receive. 
Therefore, IT value proposition is multi-layered, multi-dimensional and situation-driven, on the top line is: you make rules and even drive business growth, the bottom line is: you take orders. Smart businesses listen to the advice of the IT, but the business acts as it's better for business as a whole, not just IT.


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