Friday, May 20, 2016

Running IT as a Digital Differentiator

Digital transformation represents a break with the past, with a high level of impact and complexity. 

IT is impacting every business unit and is becoming the driver of business change. However, many IT organizations still get stuck at the lower level of maturity to only “keep the lights on,” and IT is perceived as a support function and cost center in those organizations.

With the increasing pace of changes and fierce competition, the forward-looking organizations empower their IT leaders to lead changes. How can IT build its reputation as a business value creator and how to run IT as a digital differentiator?

Technology is a differentiator and creative disruptor, and the information is a “gold mine” of the business: Due to fierce competition, the differentiation provided by innovative technology usually is more long-lived than differentiation provided by marketing actions that can be copied easier. And technologies can push you out of business if you are not agile enough to change your business model. IT not only matters more but also so critically, many times, it is a determining factor of success for the business strategy to achieve the fast growth and long-term sustainability of large organizations. Nowadays, the opportunities for cost-leadership as a business strategy are now much harder as everything moves so much more quickly, but the differentiation provided by innovative technology and business insight abstracted from the abundant information allows companies to reach the "long-tail" customer that previously was impossible or uneconomic. Therefore, businesses need to invite their IT leaders to co-create strategy via sharing technology vision, not just take orders to align and implement the strategy. Businesses need people who are passionate about exploiting information enabled by information technology to work at the heart of the enterprise and build competitive business advantage.

It’s ultimately important for IT to discuss with customers about "what's possible" not just "what do you want": For the "what is possible" part, don't just deliver what the business asks for, but be able to provide the "best or most innovative solution" for the business' requirement, offering added value and feature insights based on system understanding, that the business might not even have thought of. This requires a certain depth of understanding of the business and having your input respected. Because running IT as a digital differentiator means that IT needs to be run more innovatively, and it accelerates the speed and makes a difference via leveraging the emergent digital trends and exploring the new way to do things, besides exploitation of the existing methods and technologies. Digital IT has a “hybrid” nature, to compete at the digital speed, IT is transforming from a builder to an integrator, from a plumber to an orchestrator; from a service provider to a business solutionary and differentiator. IT management philosophy is also transforming from “built to last,” to “wired for change.”

From IT leadership perspective, the CIO should also shift mentality from a tactical, transactional manager to an innovative strategist and innovator: CIOs as C-level business leaders, do need shift mindset to become business strategists, not only craft IT strategy or draw the solid IT roadmap but also co-create the business strategy, as IT strategy is an integral component of business strategy, and IT strategy and digital strategy are convergent to setting clear digital visions, diagnosing the business issues, building a set of guidelines, taking actions and making the continuous delivery for making a leap in digital transformation. Innovative IT leaders can see things differently either via architecture, customer, process, or disruptive creativity lens, to fill the gap at the big table and contribute to business planning. The more dimensions the lens has, the better an innovative leader can manifest a vivid vision. A digital IT leader with a visionary mind is able to and not afraid to leverage contrarian views to shape a holistic picture and to run IT as a digital differentiator.

Digital transformation represents a break with the past, with a high level of impact and complexity. Therefore, running IT as a digital differentiator is easy to say, and hard to achieve. Transformation efforts need to be undertaken as the means of getting to a differentiative capability to accomplish a defined goal. Otherwise, they cannot have a clear focus and business rationale that is essential to gaining any traction in changing an embedded culture. There is no one size fits all, every IT organization has to explore its own sets of best practices and next practices, to build business competency and elevate digital maturity.


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