Monday, August 29, 2016

Three Best Practices to Run a Frictionless Digital IT

Focus on being a solution-driven organization, innovation engine, and run IT as a business.

Businesses are transforming from an industrial era with knowledge scarcity to the digital era with information abundance. Technology plays a pivotal role in such a paradigm shift, and the information is penetrating into every core process of the organization. Companies that lacked the skills to manage information technology effectively suffered compared with competitors that had mastered those skills. Besides setting digital principles to follow through, which best/next practices should IT leaders develop and practice for running a frictionless digital IT?
Contextual understanding practice: Traditional IT organizations were run as a siloed support center, an order taker, and a help desk, CIOs are technology geeks or tactical managers who don’t understand the business side of story comprehensively. However, hyperconnectivity and interdependence are the digital nature of the business these days. In order to improve IT maturity, IT leaders have to gain a contextual understanding of the business. Because IT initiatives are unlike others as they are always enterprise-wide, and IT oversees business processes which underpin digital capabilities. Thus, the contextual understanding of business helps IT leaders treat every IT project as the business initiative. When it comes to collecting the business requirements, IT needs to take the traceability path of where the requirements come from, and IT requirements need to be functionally structured to serve each functionality the enterprise needs, and it often requires multiple organizations to produce the overall functionality/capability required. IT management should practice contextual understand via knowing where all the functional boundaries are and it requires a holistic perspective and ability.

Continuous Optimization Practice: IT oversees business processes which underpin organizational capabilities. A CIO must also be able to develop and optimize the IT operational function within itself. It is one thing to have the IT resource aligned with the business strategies/ objectives, When a CIO is able to position and maintain the IT organization to ensure it addresses both "IT Effectiveness" and "IT Efficiency," they have earned their stripes. In addition, all of IT spending must be looked at through an investment lens, provide a framework for thoughtful and informed decision-making. Etc. Thoughtful cost-cutting and investment with an eye towards the future is the signal of a well-run company. Mistakes are made when the all-in value of a business line is not taken into consideration when making budget decisions. There are few business units that are as deeply embedded into each corporate function as IT. Hence, IT has to leverage knowledge to uncover hidden value via continuous cost optimization practices, not only within IT but benefit the entire organization.
Cross-functional Collaboration Practices: Silos are inevitable in every structured organization, the functional silos in traditional organizations in the industrial age intend to achieve a certain level of business efficiency. Silos have caused some obvious issues, Silos are a method of containment and storage: bounded groups or insular tribes are evidence of silos, and silos are reservoirs for homogeneous thinking, limiting the organization's creativity and innovation. Silo thinking leads internal competitions with ignorance of the fact that the business as a whole should be superior to the sum of pieces. It is the responsibility of the leaders to initiate his or her team to break the silos and realize the common goals or strategy which are far more important than the personal and departmental goals. There are negative conflicts when the organization has little collaborative competency; and when they integrate, there is more potential to innovate and create value, more so when the collaborative competency of the organization is strong. Fostering collaboration is the key to creating a seamless organization when in pursuit of a strategy.

Either setting digital principles or developing the best and next practices, IT leaders should remember that IT is about the Information, and focus on being a solution-driven organization, innovation engine, and run IT as a business, rigorously identify and pursue business value, the business will ultimately benefit from it. If IT leaders are tuned into their business and their organization, they can be successful in any economic climate.


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