An effective IT organization should focus more on vendor/customer relationship management, process optimization, portfolio management, and make an influence on business innovation profitability and maturity.
These engagements are leading IT to be much more proactive in proposing, instead of responding to ideas for new ways to generate value and improve business profitability. The performance driven IT management can align its business activities that have a three-way impact - revenue, cost and investments at the same time by choosing an environment to compete, collaborate accordingly.
Strong IT management can improve business profitability: The digital evolution means that channels to customers. Without customers, an organization cannot survive. To keep relevant, IT needs to transform from a back office function to a strategic business partner that not only impacts the bottom line business survival, but also the top line business growth. In specific, IT makes an influence on everything from how pricing is affecting close times and support calls to referral business activity triggered by high customer satisfaction, etc. Without profitability, an organization cannot grow and thrive. The challenge for IT management is getting out from the daily burden, spending more resources and time on innovation-related activities. In the end, it is not about technology, but what technology can do when it is enabling and integrating with change management and business processes to deliver strategic differentiation.
Information Technology can drive the business but it should be in conjunction with the business strategy. Otherwise, IT will be seen as in competition with the business. In practice, how does IT become strategic? How does IT deliver maximum value? If you understand that upfront by doing the right strategic questioning, you can later go back and ask if you achieved the value that had been set out to attain. When IT becomes only the mechanism for realizing a vision described by other C-level executives, it becomes a commodity. As always, IT needs to work closely with internal customers to improve business operations. But more crucially, IT can digitize the touch point of end customers' experience. IT is the key ingredient of any competitive business capabilities. IT value is measured by optimization and consumption of IT assets in support of the business functioning and growth with tangible revenue generation.
Inherently generates more revenue per unit cost compared to competition across every demand pattern: IT can help business improve net by reducing cost of doing business with various means such as right sourcing & sizing, keeping IT cost flat while at the same time maximizing its output so when the business revenue increases. The business evolution means that channels to customers. Without customers, an organization cannot survive or create value and profitability. It is all about understanding the essential customer requirements, why they're needed and what the benefits are. Only then, should the technological aspects come into play for implementing the tailored business solutions to either delight customers or build differentiated business competency cost-effectively.
There are no rules for how you deliver business benefits, a good suggestion is to ensure that IT enabled innovation efforts are focused in the strategic direction of the company, to deliver some combination of the benefits of affordability, convenience, and ease-of-use compared to higher-performance existing solutions. Improving revenue alone without improving net will become meaningless as stakeholders will be more interested to see how much net profit generated from the business rather than revenue. Achieving visibility of costs as a key IT strategic initiative today provides a pathway into technology optimization and justification of IT value contribution to the organization's bottom line performance within each revenue stream.
Create and sense new markets before competition, thus, making it much more sustainable than the competition: Rapid change and fierce competition are the new normal. Customers become more demanding and selective. Customer-facing applications/solutions are critical as at the end of the day, they generate revenue for the business. Trending business growth opportunities and creating new markets are important to keep business evolving and increase customer-centricity by asking: What new opportunities could you capture that you can’t address with your current business model? Who are your target customers, and what do they want next based on their current needs? There are frequently “fundamental differences” between the organization's view of value and that of customers. Build customer-centricity consistently in a way that delivers the right experiences to the right customers at the right times.
Nowadays, customer-centric innovation is in strong demand because digital is the age of people, choice, and empathy. When IT can really understand or attempt to capture the insight about what customers actually want, it is when IT can reach the “long-tail” customers by introducing new products or new methods of production, opening new markets or utilizing new resources. Otherwise, you might produce the most-sophisticated-in-the-market product, but no one needs and buys it. That will waste the talent, time and resources of the business, without making profit for the company.
The business transformation shift comes with an information shift, a shift that organizations will take advantage of emerging technology to optimize business processes and capabilities; use abundant information to gain knowledge and insight; a shift to drive culture and transformation towards a more intelligent enterprise. IT becomes more critical strategically, tactically, economically, metaphorically. There will be no magical solutions for IT generating revenue, though when rationalized and optimized IT investments are restricted to meet a short time goal, in the long run business will be on its course to generate minus revenue. An effective IT organization should focus more on vendor/customer relationship management, process optimization, portfolio management, and make an influence on business innovation profitability and maturity.
Strong IT management can improve business profitability: The digital evolution means that channels to customers. Without customers, an organization cannot survive. To keep relevant, IT needs to transform from a back office function to a strategic business partner that not only impacts the bottom line business survival, but also the top line business growth. In specific, IT makes an influence on everything from how pricing is affecting close times and support calls to referral business activity triggered by high customer satisfaction, etc. Without profitability, an organization cannot grow and thrive. The challenge for IT management is getting out from the daily burden, spending more resources and time on innovation-related activities. In the end, it is not about technology, but what technology can do when it is enabling and integrating with change management and business processes to deliver strategic differentiation.
Information Technology can drive the business but it should be in conjunction with the business strategy. Otherwise, IT will be seen as in competition with the business. In practice, how does IT become strategic? How does IT deliver maximum value? If you understand that upfront by doing the right strategic questioning, you can later go back and ask if you achieved the value that had been set out to attain. When IT becomes only the mechanism for realizing a vision described by other C-level executives, it becomes a commodity. As always, IT needs to work closely with internal customers to improve business operations. But more crucially, IT can digitize the touch point of end customers' experience. IT is the key ingredient of any competitive business capabilities. IT value is measured by optimization and consumption of IT assets in support of the business functioning and growth with tangible revenue generation.
Inherently generates more revenue per unit cost compared to competition across every demand pattern: IT can help business improve net by reducing cost of doing business with various means such as right sourcing & sizing, keeping IT cost flat while at the same time maximizing its output so when the business revenue increases. The business evolution means that channels to customers. Without customers, an organization cannot survive or create value and profitability. It is all about understanding the essential customer requirements, why they're needed and what the benefits are. Only then, should the technological aspects come into play for implementing the tailored business solutions to either delight customers or build differentiated business competency cost-effectively.
There are no rules for how you deliver business benefits, a good suggestion is to ensure that IT enabled innovation efforts are focused in the strategic direction of the company, to deliver some combination of the benefits of affordability, convenience, and ease-of-use compared to higher-performance existing solutions. Improving revenue alone without improving net will become meaningless as stakeholders will be more interested to see how much net profit generated from the business rather than revenue. Achieving visibility of costs as a key IT strategic initiative today provides a pathway into technology optimization and justification of IT value contribution to the organization's bottom line performance within each revenue stream.
Nowadays, customer-centric innovation is in strong demand because digital is the age of people, choice, and empathy. When IT can really understand or attempt to capture the insight about what customers actually want, it is when IT can reach the “long-tail” customers by introducing new products or new methods of production, opening new markets or utilizing new resources. Otherwise, you might produce the most-sophisticated-in-the-market product, but no one needs and buys it. That will waste the talent, time and resources of the business, without making profit for the company.
The business transformation shift comes with an information shift, a shift that organizations will take advantage of emerging technology to optimize business processes and capabilities; use abundant information to gain knowledge and insight; a shift to drive culture and transformation towards a more intelligent enterprise. IT becomes more critical strategically, tactically, economically, metaphorically. There will be no magical solutions for IT generating revenue, though when rationalized and optimized IT investments are restricted to meet a short time goal, in the long run business will be on its course to generate minus revenue. An effective IT organization should focus more on vendor/customer relationship management, process optimization, portfolio management, and make an influence on business innovation profitability and maturity.
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