IT Matters is a blog for IT professionals interested in improving corporate IT performance and making IT needs evolve to support the business in a flattening world.

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March 20, 2007

And don't forget the basics

IT and Business alignment has become even more in focus in the past few years as cost cutting moved to the forefront of the technology mandate.  Perhaps marketplace confusion, so much in the press after the many failed promises of the dot-com era, is a contributor as well.  There are companies that insist that IT is a necessary evil, and others that insist that IT provides competitive advantage.  In either case, and for the variants in between, the questions that are asked can be boiled down simply to "What have you done for me lately?"

Alignment, and hence survival, is a matter of focus on two basic themes -- enable the business to achieve value and communication about what you're doing.  Oh, and don't forget the basics.

Enabling business to achieve value is really an outcome of execution.  By getting close to the customer, in big and small ways, IT can help with the value proposition.  Annual IT strategy sessions, quarterly budget and project reviews, monthly financial and operational reviews, all performed with a committee of high-level business owners, are examples of the big things.  Smaller things, but just as important, include named resources and co-location -- people that the every-day business person can converse with regarding business issues.

Another key component of achieving value is an unabated focus on business process.  Using or evaluating technology because it's the latest thing might be fun and look cool, but if it doesn't improve the business then you've just spent money doing something for IT alone.  If, on the other hand, you completely understand what the business is trying to do and can provide solutions that streamline or enhance business processes, you enable the business to achieve value through innovation.  The difference may be subtle, but the focus on what rather than how is the real value creator.

The other basic theme in enhancing IT and Business alignment is communication.  It's not self-serving to tell people how well (or not) IT is adding value, and, in fact, may be a survival tactic as well as an alignment tactic.  Make sure the metrics you're using in the communication really point out value as well -- does a CEO really care as much about system up-time as he would about sales increases brought about by customers who are driven to a new web-based sales channel?  Tell your story, tell it often, but do it in a way that business leaders can understand.

Oh, and don't forget the basics.  You have to keep the phones working, you have to keep the PC's up, you have to get the checks out, you have to keep the systems operating.  Poor or sloppy execution can undo all the alignment that has been achieved.  Consistency in performance and financial excellence is one of the fastest ways to instill confidence in business, and is the cornerstone of alignment improvement.

March 7, 2007

The Evolving Role of the CIO

Few leadership roles in business have been transformed as extensively as that of the CIO over the years.  The explosion of new technology and its business impact necessitated that those piloting the IT helm continue to develop new and enhance existing skills simply to keep pace with technology’s potential and the ever-growing opportunities. 

The role of the CIO has evolved through three broad eras of computing. 

 

The Automation Era launched technology into the business world and somebody had to manage it.  The “DP / IS Manager” was an operational manager focused on on-time delivery, reliability and effectively responding to the business’ need for information.  IS leaders began to develop deep functional knowledge of certain business operation from a support and execution perspective that would serve them well in the future.

 

The Integration Era leveraged technology to implement enterprise resource planning systems and re-engineer business process, giving CIOs a long sought seat at the table.   CIOs engaged in persistent efforts to educate business management about the opportunities presented by IT.  Over time, business recognized that IT could be a competitive differentiator (e.g. American Airlines Sabre system)

 

Most recently, the Ubiquitous Computing Era arrived, and with it new technologies emerging from every direction, creating an environment where the CIO is personally responsible for determining whether the organization positions IT as liability or strategic asset.  CIOs are increasingly challenged to align technology opportunities with business strategies better, faster and cheaper than their competitors. 

 

The CIO today has become a central figure in the management of business transformation.  In upcoming posts we’ll discuss in more detail the dimensions along which the CIO has evolved.

March 3, 2007

Open kimono

I first heard about Don Tapscott in 2000 when his book - Digital Capital - was made mandatory reading at my previous company. This was the time when the hype around web services was accelerating and the mantra of the day was 'business webs'. His new book - Wikinomics - is (again) a fairly accurate snapshot of the current business milieu (the Web 2.0 era) and how it affects companies.

If you're already familiar with collaborative software development (e.g. Linux), collaborative editing (e.g. Wikipedia), tagging (e.g. del.icio.us, flickr) and the general Web 2.0 buzz, a lot of this book will be feel like old material. What's was new (and interesting) to me was the application of the principles of openness and collaboration by established companies (e.g. P&G). In fact, the first chapter describes how a struggling mining company (you can't get more old economy than that) turned the tide by using the intellectual power of people outside the company. Don's premise is simple: use the power of your customers, partners, suppliers to co-design, create, market etc. In short, he urges companies to follow an open kimono policy.

His argument is compelling when he talks about success stories such as Amazon and eBay.  It's easy to see how Amazon, for example, adds value to its platform by allowing its customers to review books, maintain wishlists etc. It's in fact one of the main reasons I prefer Amazon to other online stores when searching for my next read ("Customers who bought this item also bought..").

What this book doesn't do however is provide a compelling playbook for companies looking to follow an open kimono policy. Take an example of a mortgage company. How would customers add value in processing a loan? Can one see customers co-creating financial products? The answers are not so clear. What's lacking is a methodology for judging what activities truly add value and what activities don't in an expanded value chain. Companies simply cannot open up their secrets to their competitors willy nilly without a strategy for how the value chain would work. Although I don't buy all of Don's hype, I do agree that companies need to start thinking about how they would operate in the Web 2.0 era. Innovative companies are emerging (witness the rise of social lending companies such as Zopa and Prosper in the lending space for example) that potentially threathen existing business models.

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