Tuesday, February 19, 2019

Running Indispensable IT: How to Scrutinize IT Effort via the Business Lens?

It has become more obvious that information is the real source of business innovation. IT will continue to be a critical department. 

IT is one of the most invaluable assets of the business besides people, IT is also perhaps one of the most expensive investments in modern organizations today. Many IT organizations are at the cross-road, either keep providing commodity IT service as a business support center - becoming irrelevant, or contribute to the top line business growth by leveraging technology as a means to an end. How can contemporary CIOs put “Chief Investment Officer,” hat on, scrutinize IT effort from the business lens and make the IT organization indispensable?

IT investment in the business can often become the decisive factor to run a high-performance organization with a long-term perspective: IT investment is usually costly. Considering many companies across sectors making a huge investment in sophisticated information & technology tools are greatly wasted because the appropriate processes to leverage those tools are not implemented or adopted smoothly. More often than not, IT can lift or break the business in a shorter time spectrum. Thus, to invest IT aggressively but with a cautious attitude, it’s important to show the clear business goals of the investment with three critical elements: Financial returns, return timeline, and risk assessment. Once IT leaders start prattling on IT-centric metrics from inside-out lens, they would lose their audience. It's important to present IT as a value generator rather than a cost center, and scrutinize IT effort via the business lens. The wise investment of advanced technologies can be truly helpful to drive business demands such as improving business efficiency, increasing employee productivity, enforcing collaboration, and harnessing innovation. Thus, make the IT indispensable.

IT and business should work closely to assess performance and potential benefit from IT investment portfolio: IT investment and management is not just the work of IT, but the responsibility of the entire company. IT and business should work closely to assess performance benefit from IT investment portfolio, and then determine what IT investment will accelerate the changes you want to see in your performance indicators. When board directors or senior leaders have sufficient knowledge and understanding of IT, they can make a sound judgment about IT investment and know how to assess IT performance objectively. When the top management doesn’t evolve critical IT issues proactively and CIOs do not get invited at the big table, IT leaders need to ask: Why is IT not part of the inner cycle, could it be that IT is still perceived as a cost center, and not a strategic investment? Before the investment is made, it’s important to identify and predict specific measurable results from their investment. After the investment is made, it’s also critical to keep track of and review upon the financial results of IT investment and manage resource, equipment, facility, or cost in an efficient way. Beside financial result, it’s also important to evaluate the overall business value from IT investment, such as quality, performance, customer satisfaction, and the varying matters that stakeholders consider important to them.

The business potential is realized via wise IT investments: IT potential is an investment, for improving revenue and catalyzing business growth. IT investment is not just about keeping the business running today, it needs to invest in the future by maximizing the full business potential. With the fast pace of changes, there is a danger of not having a proper management process to "develop and nurture" business potential. IT needs to be understood and harnessed by all stakeholders to fulfill the business potential. The challenge should be met comfortably by identifying important business areas that need investment for bringing growth opportunities, looking for new avenues of revenue, or enforcing better practices etc. IT can select the measurement for assessing the potential for any business improvement opportunities, feature enhancement or taking business initiatives to offer a competitive business advantage. When the organization invests in information technology, it entrusts the IT organization with the stewardship of that considerable investment and the responsibility of providing good governance and operation of that investment, to ensure the high return on investment.

It has become more obvious that information is the real source of business innovation. IT will continue to be a critical department. To run indispensable IT, it’s critical to invest in and leverage appropriate technologies and solutions to generate invaluable insights, scrutinize IT effort from the business lens, and help their businesses open up new channels of revenue and monetization within the enterprise, their ecosystem, and the industry.


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