Monday, January 19, 2015

Should and How can IT Get more Engaged in Revenue Generating Initiatives?

IT can drive the business but it should be in conjunction with the business.

Historically, IT has been perceived as a back office and a cost center, a technology controller, not an enabler. Now, with the accelerating speed of change and the consumerization of IT, IT organization has to improve its maturity, from being a reactive helpdesk to a proactive business partner; from a cost center to a value creator; and, more importantly, it needs to become an innovation engine and the driver of business growth. But more specifically, how can IT get more engaged in revenue generating initiatives?

IT can drive the business but it should be in conjunction with the business: Otherwise, IT will be seen as in competition with the business. How many years of simplification have organizations lived through getting rid of overlapping services from different business units? The business should have the best understanding of the needs of their customers and market opportunities. Emphasis on "should." This doesn't mean it is an exclusive understanding. IT and the CIO can apply their knowledge of technology to propose products, services, offerings, new ways of doing things, etc. to the business, who at the end of the day is responsible for selling.

IT has two sets of customers: The end customers IT can directly or indirectly serve or influence and the internal customers IT always work with: Because nowadays, IT is the key ingredient of any competitive business capabilities, and IT can optimize the touch point of customers' life experience. As always, IT also needs to work closely with internal customers to improve business operation. Changing the term from IT users to customers was beneficial for reminding IT people that they don't know what is best for others. Users are not mindless or children who don't know what is best for themselves. That reminder is even more pertinent today when the business units have a choice as to who meets their IT needs from all the cloud service and professional service companies selling directly to the business. Additionally, you can educate your customers on what new technologies exist and give them the ideas/tools to help decide what needs they have.

The better idea is to use departmental meetings or information exchange programs to socialize ideas: Naturally, just like any business unit, IT must partner with the respective business units to derive and deliver business strategies that are enabled and/or driven by IT. Unfortunately, there are more cases where the business units are taking over their own IT. Also, it is important to differentiate between product-driven revenue and performance or operations improvements. The companies should be market driven and product management owns revenue-generating initiatives, IT can share ideas with businesses via of:
(1) IT briefings, particularly on technology trends and possible benefits.
(2) informal or informative team building meetings at the department level,
 (3) idea exchange programs (where one party may ask for help on a problem or another party may pitch a big idea based on some technology or derivative work)
(4) "skunk works" where tech teams can prototype solutions.
Also, more and more CIOs are taking on responsibilities outside of the IT domain, and in some cases with direct revenue generating responsibilities. If CIOs are perceived as business executives, they shall be able to demonstrate revenue generating expertise.

One very important vehicle is an effective, strategic, tactical, and operational set of the governance processes: How can the CIO get a seat at the table? By offering ideas that are embraced by the business leaders resulting in better business results, how shall IT participate in policy setting and governance practices? While the informal vehicles are fundamental, governance at strategic, tactical, and operational levels are essential to formalize the decision-making, allocation of resources, and status reviews/checkpoints for these important initiatives. Getting ideas flowing from the top-down and/or the bottom-up is another indispensable aspect of effective governance. The global IT trends research has identified:
•Board meeting presentations
•Governance meetings
•Informal discussions/meetings
• IT briefings

How to cultivate a culture of collaboration: It is not a question of the IT or the non-IT organization not always knowing what is right. However, it is IT and non-IT working together as partners that will derive the most appropriate strategy and deployment. The business can't succeed without technology and the IT group can't succeed without satisfied users. How much of this is related to company culture, meaning that only certain teams in the organization are considered capable of developing great ideas for generating revenue? The best way will vary by company and by the openness of the business leaders to embrace the CIO doing this. Some suggestions are:
a) One-on-one meetings of the CIO with the business leaders to learn more about their challenges
b) Learning about the business and market from other sources and presenting ideas in a general meeting that is organized as a roundtable or discussion
c) Asking for assistance from any business executives they are close to or that they have helped in the past to do the introductions or call the meeting referred to in b above.

The good thing is that there are significant signs of positive change around the globe; IT is accelerating its speed, albeit there is still a long way to go for running an agile and high mature digital IT organization which is a key step in becoming a digital master.


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