Friday, March 4, 2016

Running IT as a Business Optimizer

The Role of IT today for many organizations is a 'solutionary'' for business problems, an optimizer for business processes and capabilities, and an orchestrator for the digital transformation. 

IT is the spinal cord for the organization, integrating various functional capabilities to bring out technology-enabled business solutions, motivating the IT team to constantly deliver multidimensional IT values. Today's organizations have to continue to keep digital fit to adapt to changes with increasing speed. So how to run IT as a business optimizer for improving business efficiency, enhancing innovation, harness agility, build resilience, and ultimately achieve high-performing business expectation?

Simplification: In a corporate world, you will find the attitude of complicating things in systems and procedures and people love to hang on to the complications and express how they are experts in dealing with complications. Overcoming complication and managing complexity become one of the biggest challenges in businesses today. Every IT initiative is to solve business problems, not a purely technical challenge. Many IT organizations still run as a silo function and back office to “keep the business light on,” and running IT project as a technical challenge only, the focus always remains on technicalities of implementation and preparedness of business/user community gets forced to focus only at the end. So this one important aspect to engage customers and users earlier on is missed or overlooked majority of the time. Remember constantly that the tool and automation are not the goals - the operating model, structure, process, automation, and tools are all means to something else. If you forget this your requirement set will be sub-optimal. It’s important to leverage Systems Thinking in IT management. Systems Thinking is not a methodology, it is underpinned by several fundamental concepts. Holism is just one. Systems Thinking allows you to see the whole, in terms of its inner processes, its interactions with external systems, its components, the specific interactions amongst them, to simplify things via optimization lens. It’s important to follow simplification principles to build “as little as possible,” but maximize outcome. Avoiding waste is better than eliminating waste. Eliminating waste is about eliminating something which is not used and saving effort on maintaining it. Avoiding waste is more about not building non-value adding features. There are always constraints, so simplicity implies to build as little as possible (as little output as possible, to maximize the amount of work not done) and maximize outcome (benefit for users/customers).

Agility: Agility is the ability to "pivot" and change direction in response to market pressure or to create market opportunity, it is a measure of ability to recognize, act and benefit from changing business circumstances. It requires distinct patterns of IT capabilities, with specific positioning in the enterprise and unit level. From the business optimization perspective, getting the right mix is not easy. It requires a good understanding of what is meant by strategic agility, to avoid over-investing in a given layer of the technology stack. So keeping an eye on where IT initiatives cluster on the value-net would be a first measure of whether IT dollars line up with strategic direction. From an agile perspective, it is imperative that IT leaders embrace agile philosophy and development methodologies, to run IT as a software startup, from doing agile to being agile. The CIO’s agile way includes quick iteration, continuous improvement, and regular delivery, as it’s the most effective way to remove risk and deliver quality software. It takes practice, discipline, and a mind shift, but it’s worth the effort.

Resilience: The business environment is volatile and uncertain; the “VUCA” characteristics of Digital bring both abundances of opportunities and unprecedented risks to the organizations today, being resilience means that the business can identify and manage risks with intelligence, it can also recover from “setback” more effortlessly. From business optimization lenses, it’s important to manage the risks but also identify some opportunities as well. Many of the opportunities are in the blind spots. When you are not looking at your blind spots, someone comes in and disrupt you over time. In businesses, every day is a risk, and more than 80% of today's business value is based on their ability to embrace uncertainty, understand the future, identify opportunities, decide which one to go after and which one they will not go after and clearly articulate forward the way value will be created. Therefore, IT plays a critical role in managing the information system of the organization to capture the business insight and foresight and optimize the set of business capabilities for building resilience and leap up the organizational maturity.

The role of IT today for many organizations is a solutionary for business problems, an optimizer for business processes and capabilities, and an orchestrator for the digital transformation. The real goal of IT is to achieve business expectations. Business is no more interested in IT if it continually delivers technology projects without delivering business value. The role of IT in the current business environment should be able to enable business outcomes, build business competency, and catalyze business growth.


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