Thursday, September 24, 2015

Three Aspects in Running Digital IT

A Digital IT needs to focus on the business priority, and build a competitive set of business capability.

IT plays a pivotal role in the organization’s digital transformation, but first things first, IT has to transform itself to increase agility, innovation, and maturity. To be successful, IT leaders must support the existing environment, to keep the light on, provide a reliable secure infrastructure, and maintain the application portfolio, while deploying innovative value generating, such as business cost optimization and revenue generating initiatives that are leveraging SMAC (Social, Mobile, Analytics, Cloud) technologies. What are the effective ways to meet these challenges and strike the right balance of running, growing, and transforming?

Optimization: IT management innately knows the top challenging problems and processes to slow down the speed and stifle innovations. But why don't more leaders make targeted time to review, examine, and adjust the processes and systems? Perception of high workloads can also lead to non-optimal responses. Pausing to create a list to adjust via human workflow to process automation can be thoughtful and rewarding. Unfortunately often in IT, there is the presumption of being able to do everything by yourself or with excel at the same old software. But the IT department is less open to trying new stuff because they think it is risky to leave the known for the unknown. It's a process that must begin by the CIO (top-down) that forces IT optimization from his/her team to have realistic and reliable data in order to be able to decide. The pervasive digitalization or IT consumerism requires the balance of “old experience” and “new way to do things,” the “learning and doing.” We have more computing power, greater connectivity, more data, greater potential empowerment of the worker, etc. But more of something isn't always necessarily good. The emergence of potential opportunities for exploiting digitization is likely to follow a nonlinear pattern or exponential speed, as the pervasiveness of an organization's digitization journey increases. How these ideas are recognized, filtered and dealt with a will as well become a crucial factor in an organization's success in running a balanced IT and producing digitized products and services.

Automation: The first stage in the journey to automation must be to examine every process and identify how it can be made more efficient and how it connects to other processes. Many IT departments operate in silos with separate teams delivering separate functional tasks: backup, monitoring, security, server administration, mail administration. Effective automation should first examine these functions and understand the connections and define any constraints in the system. Identify and remove the inefficiencies and rationalize the manual actions first. As this process goes along, see what can be automated by scripts or just by using the automation available natively within many of the tools you already have, but don’t use it because you don’t examine the processes from a holistic viewpoint on a regular basis. Often times the simple act of reviewing, connecting and rationalizing will itself improve efficiency and introduce elements of automation that have not previously existed. One of the key areas to examine when undertaking this review is not just the effort involved in any tasks, but the time impact in subsequent tasks having to wait for key tasks to be completed. Identify any constraining tasks and look to automate these first to reduce the overall delivery cycle for a task.

Value-creation: Business and IT integration is critical along with consistent reality checks and communication from both top-down and bottom-up. The closer they are the higher the success rate and less likely transformation will stall. A strategic business case creates a narrative that places a proposed investment within its competitive context. Most commonly, the narratives within strategic business cases reflect the following business value pathways: responding to mandates by external circumstances (GRC discipline); upgrading existing technologies; making business process improvements; responding to a business necessity; gain a competitive advantage; and, generating options for provisioning the full set of business capabilities. Every IT initiative is a business initiative, for example, storylines might be developed around themes such as: how the initiative ensures the organization’s compliance with regulatory requirements; how the initiative restores the organization to competitive parity by reversing erosion in customer loyalty and in profit structures; how the initiative builds business processes that differentiate the organization from its major competitors; and how the initiative situates the organization within a growing and highly profitable product-market niche. Developing a compelling strategic business case is especially critical when an initiative is difficult to monetize - that is, attaching believable dollar values to identified benefits flows. Compelling financial business cases describe the initiative’s benefits and costs flow. It is important to be as comprehensive as possible in monetizing costs flows so too-optimistic cost projections are (sooner or later) recognized, seeding doubts about an initiative in others’ minds. On the other hand, it is important to be as conservative as possible in identifying and monetizing benefits flows because too-ambitious benefits flows are easily countered.

A value-driven digital IT needs to understand stakeholders’ expectations and propose a service/solution portfolio that corresponds to both demand and cost drivers with a focus on business priority and build competitive business capability. IT develops the professional competencies needed for successful business solution delivery, IT captures organizational knowledge and leverage analytics tools for identifying and tracing through the manner by which an IT initiative impacts an organization’s bottom line, continuously improve performance, IT- Business relationship needs to be shifted from alignment to integration, business as a whole has fine-defined objectives, processes, and indicators with clear accountability and responsibility to deliver business objectives and implement business strategy steadily.


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