Friday, March 2, 2018

Three Horizons of Digital IT

Running, growth and transformation are all important stages of the business’s survival and thriving. Transaction and transformation are the two sides of IT coin.

With the accelerated digital speed, corporate IT has no choice but to embrace the increasing pace of changes or literally face extinction. IT faces the pressure to reinvent its reputation from a cost center to a value creator. The IT leader of the future and the exemplars of today must move away from a pure IT manager, and become a trustful business partner and an insightful strategist to explore three horizons of digital IT.

RUN - “Keeping the Lights On” is still fundamental: With the maturity of on-demand service delivery model, more budget is being allocated to the business managers that they are being given the option to spend their money at their own discretion either with corporate IT or purchase services from the third party. Internal IT organization is facing pressure to prove that they are the most effective route to deliver IT services. Keeping business running is where the money is made on a daily basis, which is then used to pay all of the employees, vendors and keep investing in the business. To achieve IT operational excellence, it has to be maintained and even better improved constantly. IT management needs to be in the continuous tuning mode through consolidation, modernization, integration, optimization, streamline IT processes, tighten coordination and collaboration with the business partners. The CIO needs to be the capable business executive who can negotiate all maintenance contracts, leveraging demand-side analysis with TCO shifting from technology budget to business budget discussions, to ensure that technology spending is in line with the business strategies and objectives. When a CIO is able to position and maintain the IT organization to ensure it addresses both "IT effectiveness" and "IT efficiency," to achieve operational excellence, IT is on the right track to run smoothly.

Grow - Investing in business growth is crucial for the long-term business perspective: The growth of business creates more value than running a business but is much riskier. You are able to spot opportunities to increase revenues, etc. IT needs a shift from inside-out operation driven to outside-in customer-centric, to find ways to move up the stack and provide business value (innovation) and not spend their cycles as just a cost center. Business growth is the dimension which deals with all the IT portfolio management. It is the execution of short-term and long-term business initiatives, and they can aim at creating value internally (by improving business) or externally (by taking more strategic initiatives to grow the business). CIOs should also work with the business on plugging revenue leakages, business unit managers need back to back KPIs with CIOs on applications/service deliveries. CIOs will contribute to revenue generation when they are part of the senior executives' team responsible for the strategy making and revenue targets. Make sure the executive team first understands what IT can drive future business growth and revenue generation. There should also be a strong interaction between different functional management and their teams with feedback mechanisms and willingness to work on IT-enabled revenue- enhancement initiatives and enable IT-driven digital flow. Companies are recognizing that IT is roughly coupled to the business strategy, and it is a very good sign about how the companies will deliver value.

Transform - Forward-looking organizations across the industries empower IT to lead the digitalization of the business: With the exponential growth of information and emerging digital technologies as the force behind continuous disruption, forward-looking organizations across industrial sectors claim they are in the information management business, and there is a high expectation of IT to drive changes and lead the digital transformation. IT should explore the furthest horizon because digital transformation is an evolutionary and long journey. IT management has to work both in IT and on IT, the true value is created at the intersection of many disciplines. IT leaders need to shift the old thinking (leads to a burden of support for operations) to digital thinking whereas the true potential is in liberating new products, services, and business models. A comprehensive digital ready IT roadmap with a clear vision helps the business navigate through uncharted water and blurred digital territories. Information Management has shifted its focus from capturing business hindsight to improve operational excellence to capture business foresight for capturing business opportunities, fostering innovation, and speed up the journey of digitalization effortlessly.

Running, growth and transformation are all important stages of the business’s survival and thriving. Transaction and transformation are the two sides of IT coin. It means you have to keep the business running forward with steadfast speed, and you also have to rock the boat for making a leap of digital transformation. The high mature IT organizations are at an inflection point to lead organizational level changes and make a leap of digital transformation. A well-run IT organization has a healthy portfolio of “running, growth, and transformation,” focus on both short-term gain and long-term win, and manage a seamless business transaction and transformation continuum.


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