Saturday, July 7, 2018

How Should IT Cross-Examine Business Opportunities and Risks by Measurement

 IT should cross-examine business opportunities and risks, and IT must contribute to or facilitate and accelerate organizational performance.

The digital society we live in is so technology-driven and information-intensive, organizations rely more and more on information and technology nowadays. Due to the faster pace of changes, there are stresses in business leadership because organizations must respond to continuous digital disruptions proactively. How should IT cross-examine business opportunities and risks to help the business become more adaptive, innovative and resilient? Can CIOs figure out those big “HOWs” in order to lead business changes systematically?

How can CIOs provide information about varying aspects of the business’s success and failure; opportunities and risks: To run IT as the strategic business partner, IT leaders should encourage their teams to spend more time with leaders on the business side as well as directly with customers. The IT-business engagement builds the trustful relationship, makes IT much more proactive in proposing ideas and providing information about varying aspects of the business’s success and failure, opportunities, and risks. Businesses are counting on IT to offer innovative solutions to the variety of problems. IT measurement and management need to evolve into something that matters to the business audience. Every new technology adopted or information refined should facilitate the business’s need but also bring down the incremental cost of business growth and time to market. Return On Investment shouldn’t just focus on the financial aspect only. Look only at cost, schedule, and quality, will not fully address value and only lead to conflict in what value is as it doesn't address the portion of value that is not measured in these indexes. ROI is expanding into other less measurable, but not less tangible areas that need to be focused on, such as collaboration, creativity, and overall business synergy and competency.

How can IT leaders avoid drowning into too much information, which only adds another layer of complication and creates management bureaucracy: Although by nature, IT management is complex, one of the important goals of running digital IT is to simplify and optimize business, break down silos, to keep information flow and catalyze change. When IT acts only as a controller; or it's inundated with the sea of information and overloaded; it often adds another layer of business bureaucracy. Bureaucracy is criticized by its inflexibility, inefficiency, silo, stagnation, unresponsiveness, lack of creativity, etc. It is correlated with a mechanistic view of the organization and reductionistic management discipline. To dismantle bureaucratization, IT should get deeply immersed in the new apps, devices, and solutions and make the business more productive, collaborative, and smart. IT needs to both qualitatively and quantitatively measure value delivery to business and achieve a high-performance result. Bureaucracy = Process Inefficiency. Digital management requires a different kind of 'control,' for example, the control on desired outcomes, keep the end in mind, not overly control the process of HOW. Do know why you are collecting the metrics. Establish a good root question. Identify the purpose of the information and the stakeholders who will use it. Ask whether the metrics can reveal anything meaningful for the identified purpose.

How should IT management develop tools and techniques that convert the measurement data to business-critical information and actionable metrics to improve business performance: Metrics can help you get some objective perspectives on what you are trying to manage, but they need to be crafted and interpreted well. Assuming an organization believes that metrics can lead to continuous improvement, it won’t be just a matter of explicit communicating the intention behind metrics, but a matter of coaching and leadership to guide the team to understand the purpose of doing that and engaging on that. The right metric is requested in the right context but without any explanation of why it is requested, without concern for whether the gathering is onerous, or without concern for whether there is a better or easier way to gather metric that achieves the same goal, the measurement can easily go wrong. To develop tools and techniques to convert measurable data to actionable business-critical information. The "SMART" framework is helpful, but be cautious about setting goals which are really valid, and make the continuous adjustment for improving performance and unlocking business potential.

The hyper-connective nature of digitalization provides the new level of transparency to run a digital business today. IT should cross-examine business opportunities and risks, and IT must contribute to or facilitate and accelerate organizational performance. Your measures should cover all areas that contribute to business value creation including products/services quality, employee engagement, customer satisfaction and financial outcomes. IT is the business.


Consultants Factory (CF) specializes in model based approach. We help your IT Organization establish industry best practices & standards like ITIL, COBIT, ISO 9001, ISO 20000, ISO 27001, ISO 22301, Six Sigma etc.
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