Saturday, April 14, 2018

CIOs as “Chief Improvement officer”: Three Alignments to Advance IT

Those organizations that have a more mature strategic alignment (integration, collaboration, harmony, etc.) outperform their competitors and tend to be more responsive to the business dynamic.

There are very few businesses today can state that IT does not play a significant role in the day to day operations or even long-term strategic positioning. But many IT organizations are still suffering from overloaded work and perceived as an isolated support function to “keep the lights on’ only. Thus, alignment is always important; most dictionaries divide alignment into two categories: Arrangement and alliance. Those organizations that have better alignment maturity outperform their competitors and tend to be more responsive to increasing pace of changes and develop long-term business competency.

Budget/resource alignment: IT is one of the most expensive investments in modern organizations. Thus, budget and resource management is critical to run a highly effective IT. Do CIOs have the budget? Many IT organizations were overloaded and understaffed, took a big bite of resource to keep the lights on, only left very little for doing innovation. No wonder those organizations still get stuck at the lower level of business maturity. In fact, resource management becomes a bottleneck for improving business competency and maturity. IT leaders shouldn’t just spend all resources on gaining some short-term performance results. Though it’s easy to say, and hard to do. Senior IT leaders have to weigh the risk/reward/ongoing maintenance (labor) equation all the time whether conscious or not. An effective resource allocation scenario helps to take advantage of resources effectively, optimize cost, set priority, etc, to ensure most of the budget are allocated to cost/value proven business initiatives. It takes commitment and discipline to stay focused on the real priorities of the business instead of being distracted by what seems to be more urgent at any given moment.

Process/capability alignment: IT integrates all important business elements into a differentiated set of business capabilities. The capability-based strategy has a much higher success rate of execution. Thus, IT-business alignment is more about IT-business integration to ensure the company as a whole is superior to the sum of pieces. Whatever term you prefer, it is a persistent and pervasive problem that demands an ongoing process/capability alignment to ensure that IT and business strategies adapt effectively and efficiently together. The business needs for IT are rooted in the business processes and where the IT services and systems touch these processes. However, most IT organizations have not mapped their IT services and systems, or the set of business capabilities to their business processes yet. IT credibility is not just based on the business alignment of the CIO, it's based on the business alignment of all the key players in the IT organization...or lack thereof. It means about business working as a whole to improve communication, harness partnership, demonstrate business value and engage employees. Only through cohesive IT-business collaboration and process integration, the business strategy can be executed and IT can deliver the high-performance results seamlessly.

IT-customer alignment: IT mission is to serve customers. Digital is the age of people. Many suggest making a shift from IT-business alignment to IT-customer alignment for reflecting the customer-centric trend. IT has both internal customers and external customers. Only by aligning the outside view with the inside view, can you understand the needs of people but also the channels needed to support them. IT oversees the underlying organizational structure and functions, integrating customer experience with business design should be a critical aspect of planning and architecting future businesses. Digital is the age of people and options, it provides the opportunity to think the new way to do things, run in a very entrepreneur fashion to solve business problems and delight customers. Customer satisfaction and customer reputation should be tracked diligently and managed continuously in this very interconnected world. The level of customer satisfaction will naturally increase the CIO’s power and influence.

Alignment is fundamental and multidimensional. Do not underestimate the perfect wave of combined IT-business integration of all of the exponential growth curves. Those organizations that have a more mature strategic alignment (integration, collaboration, harmony, etc.) outperform their competitors and tend to be more responsive to the business dynamic.


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