Wednesday, March 14, 2018

The Performance, Profit, and People Elements for Running Digital IT

Digital IT is a paradigm shift in role, responsibility, attitude, and aptitude.

We have more computing power, greater connectivity, more information, greater potential empowerment of the workforce etc. Nowadays. IT plays a crucial role in achieving both operational excellence and improving business competency. However, different IT organization and their companies are at the different stage of the business maturity. IT can be used as a tool to fix things; a business enabler, a change catalyzer, or a digital transformer to meet the ultimate goal of an organization's short/medium/long-term strategic plans. Therefore, important business success elements such as performance, profit, and people need to be well aligned to create a unique IT competitive advantage and improve overall digital readiness and maturity.

Traditional IT was often operated via inside-out lens and measure things only mattering for internal IT organizations. To reinvent IT reputation as a trustful business partner, outcome-based IT measurement practices are important to focus on the performance of the entire company via the business lens. You can only manage what you measure. When IT switches the angle from insight out to outside-in, IT management can work both in IT and on IT, to ensure that the silo wall has been broken down, information, ideas, and knowledge can flow across the functional border frictionlessly. CIOs need to keep a measure and periodicity at which the measure is reviewed against setting targets on a continual basis to ensure the stakeholders get a real picture of how well the IT efforts are bearing desired results. IT leaders must keep in mind which KPIs better measure IT capability and capacity or overall IT competency to deliver business value and always keep business and IT on the same page. IT metrics have to evolve from being a cost center to becoming a revenue generator Track the right metrics and know what to do with them to understand and make the continuous improvement.

Profit: The general expectation from IT has changed. Not only are they being seen as an enabler, they are now mandatorily required to give ROI for the investments. To put simply, IT needs to become the revenue rainmaker via enabling new digital services and adding new revenue streams. Information and knowledge can be tapped in monetizing an IT-driven business initiatives’ benefits flow. Leading IT organizations are able to spot the opportunities to increase revenues. Digital IT organizations let revenue generation or profit increase become the focus vs. cost savings/ optimization. Digital CIOs will contribute to revenue generation when they are part of the senior executives' team. To clarify IT investment ROI, IT leaders should invite the business to provide feedback about the potential benefit, and IT brings information about the cost, the ROI calculations should be a joint undertaking. To achieve IT profitability, IT management has to work both in IT and on IT, because the true business value is created at the intersection of multiple management disciplines. with feedback mechanisms and willingness to work on IT-enabled revenue-enhancement initiatives. IT helps to launch innovative delivery channels for improving sales revenues, or discovering better solutions that can support both the business need and build any ROI required to justify the business case and enable IT-driven innovation benefit flow.

People: As always, people are the most invaluable asset but also the weakest link in the business. One of the most pervasive and persistent concerns or complaints from IT leaders is the IT skills gap. Too often, leaders are allowed to complain generically about what they mean by skill and competency gaps and often they pick the symptom, not digging through the root causes. Every organization must address their common and unique IT skills requirements and map that out through some sort of skills/competency matrix within their organization. IT skills gap is the reality, there’re many variables and intangible factors to leverage for IT talent management, and innovate IT management to get digital ready. Traditional talent competency model more focuses on the quantified result, with ignorance of qualified or innovative effort; or only measure short-term productivity, without taking enough consideration of long-term skillset matching. Further, most performance management systems today rewards mediocrity rather than encourages excellence. To fill gaps and reinvent IT organization, running digital IT starts with digital ready people, makes the good alignment of employees’ career goals with the business goals, and builds a delightful workforce and workplace to improve productivity, effectiveness, and innovation.

Digital IT is a paradigm shift in role, responsibility, attitude, and aptitude. Your goals and objectives will be your drivers. There are so many things IT can help the business accomplish, but there are also many obstacles IT needs to overcome, in order to move up the maturity level of IT from reactive to proactive mode, from an order taker to the strategic partner of the business, from a cost center to a revenue-maker and from a commodity service provider to an innovation engine of the digital business.


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