Monday, April 22, 2013

The Biggest IT Blind Spots

The business fails IT, just like IT fails business.

Many IT organizations still survive in the dark back office, no wonder, there are both strategic and operational blind spots result in decreasing business productivity and lowering organizational maturity. What are those fatal blind spots and how to avoid them? 

1.  Leadership Blind Spot 

If IT never gets the opportunity to have peer to peer communication with business partners in the same language either at the big table or informal conversation, then there's no surprise of any kind of gaps or blind spot -with "Lost in Translation" syndrome. In order to avoid leadership blind spot:

CIO must be an equal "C" at the table to everyone else. Respectfully, those CIOs who are too internally focused are those that have given IT a bad reputation historically. IT leaders MUST become an active member of the business. Next-generation CIOs are actively engaged in the business and act as business strategists at the "C-table" to earn their "C."

IT should engage in business more. High performance cannot be achieved unless the IT department improves their act and MUST engage the business, not the geek in the tech tower. IT often gets criticized because it does not deliver value to the business and its focus is not on the business where it should be. IT must engage in business more to avoid blind spots. 

2.    Strategy Blind Spot 

Indeed, there are also blind spots in strategy formulation and execution. IT strategy is an integral component of business strategy, however, in many low-mature organizations; IT strategy is detached from business strategy, and the blind spots will be hidden in three “C”s: Customer, Competitor, Choice, and three “T”s: Threat, Trends, and Truth, etc.

Blind Spot” is due to a lack of sufficient resources. Many companies are trying to do more with less. Unfortunately, the IT department seems to be one of the first teams to be impacted by any budget cuts. This results in a team that has to spend all their time “putting out fires,” rather than focusing on developing strategies that advance the business and give them a competitive edge in the marketplace. If IT Departments are going to move in this direction, they MUST alleviate themselves of the mundane, daily tasks that weigh them down.

The company's reputation and success today are founded on innovation and to a very large extent, IT and technology innovation: IT-led innovation is already known to be a major contributor to the top line business growth. Thus, to avoid strategy blind spot, IT should embrace the upcoming technology trends; in addition, if your IT budget has stayed flat that you have moved from 80/20 (maintenance/innovation) to 50/50 and on to 20/80,  you will have shown in some measure that you have solid strategy and IT has become more ingrained in the business.

3.    Culture Blind Spot

If all executives act as a functional manager than senior executives, keep silo thinking, hold "ownership" arrogance, not stewardship attitude, then, there's no surprise of having blind spots in organizational culture.

The business fails IT, just like IT fails business: Many organizations are still running at industrial speed -with bureaucratic culture and hierarchical decision-making scenario, business is the sum of pieces than a holistic whole, functional silos compete for resources, rather than work collaboratively & seamlessly to optimize business. Such a silo culture will create numerous blind spot in resources, process, capacity, and capability.

Cultivate the Culture of Innovation: As negative culture creates blind spots as well, business and IT should work closely to well align process and technology to improve productivity, over time IT will be delivering (once without endless rework and maintenance) what the business ACTUALLY needs. More importantly,  IT plays a critical role in shaping the culture of innovation, to encourage quality over quantity, continuous learning, and innovation, improve business self-management capability, etc. 

4.    Process Blind Spot 

Business processes underpin capabilities, and capabilities underpin strategy, the blind spots in business process management will cause failures in strategy execution. Thus, IT can realize the far greater value by improvement in the key business process.

  • IT can, and should take the lead, to assist the business to improve processes: such as application rationalization exercise will address - often this is initiated by IT and reduces both complexity and process overhead. Processes can be improved without the application of technology, however, appropriate technology application is the domain of IT and effective organizations meld process changes and technology applications, such effort will help the business establish superior positioning with respect to competitors...
  • Productivity increase comes from effective processes: Technology, through new functionality, can increase efficiency by certain percentage, but the higher percentage of productivity increase would come from bringing effectiveness & efficiency in the areas of process (re-engineering, eliminating waste, architecting new processes, etc.) & people (new skills, knowledge, etc). Though organizations should realize that Technology is only one part of bringing efficiency in Business capability, other factors also play an important role (Governance, Assets, People, and Processes).   

5   Measurement Blind Spot 

One possible cause of the blind spot is the fact that many IT organizations can neither sufficiently measure the value they provide to their organizations nor, as a consequence, articulate their value to the organization in a language the organization understands. That also means they probably wouldn't know where to invest in new capabilities for their staff, even if the organization thought there was any value justification for making the investment. The "measurement" of productivity - not productivity itself – has blind spots.

  • Do productivity analysis: There is two level analysis: a productivity ratio at a macro level and second, determining what portion of any productivity gains are due entirely to IT investments. Determining what contribution IT investments make to higher productivity is a little more complex and probably requires some sort of multifactor productivity analysis, data, and time, where the productivity increase can only be attributed to IT, all other things being the same. The multifactor productivity analysis would examine the process to determine what element of production made the employees more productive, a change in HR policy, training, new machinery or giving everyone a tablet and a smartphone 
  • The measurement of productivity does not relate to effectiveness. Because of the business manager keep on asking employee productivity instead of focusing on getting things to work correctly. CIO set-up KPIs that show productivity improvements, but no real business improvements. Businesses have also become very adept at measuring the result. IT either gets on the value bus or forever will be seen as the soft target for blame. If business and IT understand each other and IT ought to be able to articulate their value in terms the other C-levels understand, which for the most part is a tangible financial measurement, in addition to whatever intangible benefits it provides.

6.    Talent Blind Spot 

The productivity of an organization (which is a system ) depends on many elements of the system, such as IT system, facilities, machines, policies. Yes, one of the most crucial elements is people. In order to increase productivity,  all the elements must interact correctly. Talent blind spot will direct attribute to productivity loss.

  • People Perspective (Productivity Improvement, Creative Workforce): if treating people as a human resource only, then, when the budget is tightening, it’s easily propose cutting 30% expense in staff also, let all “innovators” go, and it meets the short-term budget goal, but create blind spots in long-term perspective. 
  • Productivity Perspective: WE all know the productivity is higher in an innovative organization, as Productivity is not a relationship between input and output but rather a relationship to throughput. Throughput indicates how efficient an organization uses its productive resources to generate revenue, to avoid talent blind spot in traditional performance management or HR, many organizations are moving to people 2.0 with mutualized IT resource pool (people with multiple skill sets) and alternative talent pipeline. 

7.   Governance Blind Spot 

To dig deeper, IT blind spots are caused by governance, the process to manage IT process, Ideally, management and governance are interdependent disciplines, and governance mechanism should be well embedded into IT management processes, to avoid fatal blind spots. CIO dashboard includes the Governance layer (the Evaluation, Scope, and Monitoring)

  • Define Value Framework: If a solid business case can be developed, the resources are often made available; in fact, the larger problem is that IT is challenged in defining value frameworks which are objective in nature and this leads to the challenge of trying to obtain funding for subjective value. if IT understands the business, its processes, and the value they create as defined through an objective framework, resources are a lot less scarce often times.....
  •  Governing IT Expenditure: The worst case for any CIO is to exist in "Cost-Cutting" or "Utility" environments, It's a constant struggle with the business to justify any IT value. By avoiding the blind spot, that is when IT is viewed as a positive ROI and one sees activities such as service investment analysis. IT charging seems to be one of the keys that force organizations into a higher maturity level. In order to do it,  they start investing in automatic asset information accumulation and volume usage measurement. They get a better handle on their direct, indirect, fixed and variable costs and they start to allocate those costs across a revenue model, based on consumption
Perhaps more often than not, IT biggest blind spots are also business's blind spots as now information & technology are so pervasive, like the business’s nervous system,  touch everywhere in organizations, the good strategic planning, effective management practice, and strong governance discipline can avoid them in increasing productivity and improving  overall organizational maturity.


Post a Comment