How to bring world-class IT to your organization

Everyone I know would like to be part of a world-class IT organization—and chances are (if you’re not already in one), so would you. But what are world-class IT organizations doing differently than their run-of-the-mill counterparts? I believe they have integrated themselves directly into their company’s success formula. In their book, “The Real Business of IT: How CIOs Create and Communicate Value,” authors Richard Hunter and George Westerman explain that world-class IT shops know how to “discuss their contributions to the organization.” Today’s CIOs, in particular, must be able to move from “discussing budgets to discussing their contributions to their organization.”

 

But how do you make this change a reality? Start by looking at your corporate business strategy. It tells you what your business organization is trying to achieve. Is it to grow business? Is it to contain costs? Is it to improve connections with customers by establishing a social media channel?

 

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With your firm’s business strategy in hand, IT needs to understand its firm’s business capabilities. According to Booz and Company, companies that have earned the “right to win” in their businesses do so through three to six mutually reinforcing business capabilities. A capability is the “ability to reliably and consistently deliver distinctive outcomes” relevant to the company’s success. Typically, a business capability is a process, tool, knowledge, skill or organization. Examples of business capabilities range from the ability to secure space at relevant retail stores, to the ability to use customer data to develop new and unique products. Most of these capabilities are automated in some way by IT. Your question should be: What are your business’s three to six mutually reinforcing capabilities that enable your business to win within its markets? How do they need to evolve over time? And most importantly, what role can IT play in growing the business’s ability to differentiate these capabilities and strategies?

 

Armed with this information, IT can now set its own goals for the year. Every goal that IT has for a particular year should tie back explicitly to improving business capabilities and the business strategy as a whole. Is it to add a social media marketing system? Or is it to increase the ranking of the Internet banking system by decreasing network latency as a whole? All IT goals should map back to the business strategy and capabilities.

 

In turn, I want to suggest that IT needs to improve its own capabilities and processes just like its business customers. As well, IT has three to six mutually reinforcing capabilities and processes that are linked to the business and sometimes core to businesses capabilities. These, too, need to be improved over time based on business strategy. By establishing a key performance indicator (KPI)-based management system, it is possible to measure and improve these capabilities over time, ultimately improving the quality of business capabilities.

 

Here’s an example: Several years ago, a customer of mine was noticing that in-mall sales of its cell phones fluctuated tremendously. After buying a business availability application, the customer noticed the fluctuations occurred when the point-of-sale (POS) sales system’s response times lengthened. By improving application performance and reducing network latency, business performance improved.

 

If we improve IT’s closeness to business strategy by following the above model, then business results will improve automatically. In IT, our people, process and technology drive the improvement that is needed to drive superior business results. To do this, we need to move closer to business customers and to move from establishing IT processes to actively managing our capabilities and processes—then communicating how they deliver value to our business customers. This way, we finally get our place at the table!

 

Solution page: IT Performance Management

Twitter: @MylesSuer

Labels: IT management
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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...


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