Sunday, March 19, 2017

How to Set Right Priorities for IT Digital transformation

By setting the right priority and focusing resources and budget on the most critical areas, IT has the opportunity to not only be responsive but ultimately be the strategic business partner.

With the increasing speed of changes and overwhelming growth of information, IT can no longer keep static to run as a support function only. Today's IT plays a more crucial role in discovering a path to strategy building, implementation, and innovation. Business/IT leaders should also realize the breakthrough success in digital businesses requires not only forward-thinking strategies but also having a step-wise approach. But more specifically, how to set the right priorities for making a digital transformation of the company?

Innovation Management: The digital mantra of IT is to “Do More with Innovation.” Besides transactional business activities, IT has to spend more time and resource on spotting the opportunities to increase revenues. Looking for solutions which will directly benefit the external end customer will improve the competitive advantage and in-turn bring in increased revenue. Digital IT needs to spend a significant amount of time on strategy management and innovation. IT is no longer just the tangible hardware boxes which are heading into the commodity, The pervasive digitization requires both business and technology professionals to rethink how things are done in organizations. The “reach and range” flexibility that now exists removes barriers that have existed in the past. After researching what happens when business managers use lateral thinking, the requirement that creativity CIOs need to become the real business leaders to work within IT and across the business scope and seek ways to grow revenues, improve profitability and spur innovation. IT also needs to build up the new set of core digital capabilities in transforming itself and business as a whole; as IT is an innovative solution provider to help organizations deliver the best-tailored products or solutions to its end customers.

Cost optimization: Traditional IT organizations are often overloaded and understaffed. Too many requirements, too many conflicting priorities of organizations do not create an environment for clarity and optimization. IT management often spreads limited resources or budget on too many things, lack of focus, or set the wrong priority. In fact, many organizations have little insight into their cost structures and who is consuming the assets. They have no idea where they are spending their money on and often assume it is mainly being spent on items which are actually much lower on the list. Hence, to digitize IT and improve IT efficiency and agility, all IT spending must be rationalized against the business benefits. Assume you're going to allocate the cost of IT investment across several revenue-generating groups, whatever the cost is estimated to be, they will then need to determine the net increase in revenue at current margins needed to offset the cost of the the business and the management can get a better clearer picture of IT solution from a cost, transparency and complexity level. In addition, 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. The goal of optimization is to eliminate unnecessary complication, but also encourage desired complexity such as design, or overall business capability management, to better compete in a global marketplace with optimized cost management. The business leadership team needs IT to be the business cost optimization expert for the company, to find creative sources of competitive advantage.

Projects delivered on value, on time and budget in this order: Due to the fast pace of changes and the shortened business cycle, IT has to be run in a continuous delivery mode. There are fewer multi-year projects, more customer-centric solutions with faster delivery. Also, the project development and management cycle which is shortened based on Agile philosophy and methodology. Statistically, there is a very high percentage of projects fail to meet customers’ expectation. It is essential for a company to have an up to date understanding of their own IT, sadly many do not and forge head forwards into projects which fail because of that lack of understanding brings. The organizations who are successful in delivering its IT projects is to ensure that there is readiness among other important aspects of schedule, scope, and cost. That is not to say that these projects didn't have problems because like most projects they did, but the whole team, including sponsors, worked together to resolve them. When to look at those really successful organizations that seem to always be able to execute projects and programs well, they mostly have clear, precise and inspiring leadership; engaged and driven employees and technical expertise. The most successful projects are those in which the business and technical (IT) personnel worked in harmony and the leadership fully empowered and supported the IT leadership and management.

Customer satisfaction (both internal and end customers): Digital is the age of customers. Building a customer-centric IT is the goal to improve IT maturity. IT has two sets of customers, internal business users as well as end business customers. IT should empower internal customers via providing them efficient tools to improve employee engagement and productivity; IT also needs to spend more time on digitizing the touch point of end customers’ experience and improve customer satisfaction. Customer experience is the key differentiator and an important strategy for the business’s long-term profitability. The next practice is to live as "customers," point out that customer inquiries are not just support related, but can foster new and better ways the application can perform and optimize every touch point of customer experience. Customer experience isn't about improving things for the customer at any cost. It's about having the real insight to make confident business decisions that result in unambiguous ROI. As always, take a step-wise approach: First, define "customer experience" for your organization. And then a valid strategic objective and the strategy mapping allow you to first understand your customers and what they value, and then identifies how to best characterize that value, define key indicators, and then set those measures appropriate to best assess the performance of these indicators because they show you how well they satisfy or delight customers.

Digital IT Workforce management: IT skill gap is a reality. IT needs both specialized generalists who have both strong business acumen and in-depth IT understanding to frame and solve the right business problems; as well as dedicated IT specialists who can take care of the daily IT operation issues. Therefore, it is important to put the right talent in the right position with the right capabilities to solve the right problems. Otherwise, it can enlarge the IT-business gaps because many IT specialists do not have enough knowledge and understanding about their businesses or customers, very few know their business’s strategy, and can’t map their daily tasks to the business’s strategic goal. Thus, it is no surprise that sometimes, instead of solving problems, they probably add more unnecessary complexity to the already tangled processes or products, to create new problems. To digitize IT, the IT workplace needs to be designed to build a culture of innovation, and help employees at all levels within an organization (from leaders to front-line) understand and develop their creative capacity to solve problems and exploit opportunities in new and innovative ways. IT professionals today must demonstrate learning agility to keep update knowledge. Although the responsibility to maintain and grow one’s expertise (technical and management/ leadership/ industry) has always largely fallen on the individual employee; albeit it is great when the organization provides support and empower their staff to achieve more, align their career goal with the business goals and build the culture of risk-tolerance & experimentation, to inspire creativity and catalyze innovation.

There is no one size fits all formula to run a highly effective IT. Because different IT organizations and the enterprise as a whole are at a different stage of reaching business maturity. By setting the right priority and focusing resources and budget on the most critical areas, IT has the opportunity to not only be responsive but ultimately be strategic leaders capable of helping lines of business thrive by proactively driving digital transformation.


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