Thursday, March 2, 2017

The Perception, Priority, and Performance of Digital IT

The faster the top leadership team understands that IT is not just technical, but rather business-driven, the high visible IT can elevate its maturity.

IT is the spinal cord for the modern organization, integrating various functional capabilities to bring out technology-enabled business solutions and build the capacity to build business competency. IT plays even a more crucial role in the digital transformation of the organization. Besides the disruptive digital technology trends, IT effects in radical digital tuning are to be an integrator in knitting all important business factors, to improve business agility, flexibility, innovation and catalyze business growth. Here are the perception, priority, and performance of running a digital IT organization.
Perception: In the traditional businesses, many IT organizations get stuck at the lower or middle level of maturity, running in a reactive mode, no wonder it is perceived as an order taker and support desk only. Same as CIOs, when IT only focuses on the operational part of the business, IT leaders are perceived as tactical IT managers without the seat at the big table. Some say, the gap between IT and the business is indeed enlarged d due to mistrust or “lost in translation” syndrome, and different parts of the business adapt to change with the different speed. IT is even perceived as the change laggard in some companies. Hence, to reinvent IT for getting digital ready, IT has to change the business’s perception of their organization, from a back office commodity service provider for keeping the lights on, to an equal business partner for co-creating the strategy and contributing to the top line business growth. Due to increasing speed of change and exponential growth of information, now it actually has an opportunity for IT to unleash its potential, and demonstrate the execution of responsibility, to be recognized as a strategic business enabler and the innovation engine of the digital transformation.

Priority: Modern IT organizations are often overloaded and understaffed. Many IT organizations spend a high proportion of time and resources on transaction-related activities, and they measure IT performance from inside-out IT lens only. Many IT organizations also act as the controller without doing enough to engage the business partner into collecting business requirement and setting priority from outside customers' lenses. Such management style would cause the desire to dominate, running IT as technical challenges, not business solutions, and the vanity of entitled gratuities. No wonder such IT organizations often get stuck at the lower level of maturity and try to make an alignment with the business, while the digital mantra of forward-look and high-mature IT organization is to run IT as the business. A premium 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 building unique business competency. A good place to start is by trying to get all parts of the business on the same process for proposing, justifying and prioritizing projects. CIOs don't set priorities in vacuums. Rather, they'll use the enterprise's strategy and business objectives to determine which capabilities are needed to enable it to achieve those objectives and then execute projects to build or solidify those capabilities.

Performance: The various activities are needed for IT to manage performance both at the strategic and operational level, such as: Improving speed & agility; improving revenue; improving customer acquisition/retention; lowering risk/cost, etc. IT performance metrics need to evolve to something that matters to the business audience, at the same time that "business sentiment" needs to get put into something more tangible, such as optimize processes, or improve productivity. Identify the key performance indicators of the company and detail how your initiatives will drive improvements in the current state. Always attempt to identify areas in which measurable improvements can be realized, providing demonstrable value is essential, in some instances, these areas have been low-hanging fruit. It is a very good idea to make IT metrics transparent to the varying departments, to visualize the progress and also to evaluate if the KPIs being used are the same as the ones they use to describe IT activity. Your measures should cover all areas that contribute to value creation including service quality, employee engagement, customer satisfaction, innovation benefit, and financial outcomes. "Continual improvement" is IT mantra in the digital era, CIOs with improvement mindset continually look to optimize processes and improve customer satisfaction.

IT needs to reinvent its brand via both working hard and working smart. Setting the right priority to create the multidimensional business value and update the business’s perception of IT. The faster the top leadership team understands that IT is not just technical, but rather business-driven, the high visible IT can elevate its maturity from “reactive to change” to proactively driving business transformations and improving its performance to get digital ready.


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