Ten Things Businesses Need to Get Right About IT
In 2023, creating a list of the Ten Things Businesses Need to Get Right About IT may seem dated to some. But for many organizations, IT still plays a supporting role, much more than it should. All organizations need to recognize these ten realities or suffer the consequences of being unattractive to talent, maintaining inefficient processes, watching their value proposition erode, and finding themselves ill-prepared to implement innovations even when they come up with them. Ten Things Businesses Need to Get Right About IT is essential reading for business leaders who have not yet embraced IT as a strategic part of their organization.
Ten Things Businesses Need to Get Right About IT
- Technology is strategic. Technology deserves its own heading in the strategic plan, not as a footnote or aside, but as a core component. On integrated diagrams of the business, IT needs to find its place as an enabler, profit potential, and transformation agent. Unlike the next bullet, which suggests IT be involved in strategic planning, this bullet focuses on the assertion that IT is a strategic asset and potentially a strategic capability for differentiation and competitive advantage—regardless of IT’s direct role in the planning process. IT should be seen as a way to create new capabilities, not just make existing ones more efficient.
- IT should be a primary player in strategic planning. In the simplest terms, the strategy requires an understanding of an organization’s current state, including its capacity for movement and change plus its market intent, both informed by a vision. A vision devoid of IT components and an agility assessment that doesn’t understand current IT capabilities and the available tools that can be brought to bear to enhance capabilities will be incomplete and, perhaps, nonexecutable. As I watch Succession, HBO’s drama about business, amid lawyers and financial people, I’m always asking, where’s the IT guy?
- Technology doesn’t need to be led by a technologist. The CIO can be a business unit leader. One of my CIO leaders actually started his career in the proverbial mail room. He knew the business. He learned how to manage smart, weird, technically savvy people, how to keep them close—and how to leverage their collaborative nature to build consensus for areas where he did not have expertise. He was a staunch political advocate for IT and ensured it wasn’t seen as a second-tier function in an organization where all the products were more technologically advanced than what IT was deploying. It was under this leader that I created the company’s first IT Customer Relationship role, which grew into an entire department that learned how to listen to internal customers and advocate for them back into IT.
- IT should report directly to the president or CEO. I don’t think this needs much commentary. If IT is strategic and all the other owners of strategic roles report to the most powerful person in the organization, IT should report to them too. Critical information about IT shouldn’t be filtered through the lens of finance or marketing—the leadership team needs to hear directly from the CIO or other titled IT leaders about their challenges, their goals, and their successes.
- IT’s agenda should be a business agenda, not a technology roadmap. A technology roadmap reflects an implementation of strategy. It is not a strategy. IT’s strategy should be written in business language and then translated into a roadmap to support the business strategy.
- IT can be a revenue center and leader in customer experience. Between the monetization of data and turning almost anything into a service, IT can play a crucial role in revenue generation and the creation of new business opportunities. If IT is seen only as a cost center, it becomes a place to save money, not make money. Organizations that did not see themselves as technology companies in the past have reconsidered their data and reclassified it as an asset, and others have determined that their logistics or another functional capability could become a revenue-generating business. An early example was Northrup Grumman which transformed its IT capability into an outsourced IT business, which was purchased in 2021 by Peraton, an affiliate of Veritas, for $3.4 billion in cash (see Peraton closes on $3.4B cash purchase of Northrop Grumman biz).
Even if IT doesn’t become a cash generator, it can be a growth engine for other parts of the business by empowering new customer experiences.
- Lines of business need to own IT system functionality. Even organizations that get IT often get it wrong. They seek efficiencies of scale by imposing corporate-wide systems on organizations. What they should be doing is imposing system-wide data-sharing requirements that allow business units to share data and central functions to aggregate it. The functionality required to execute a business unit’s goals should be negotiated between business units based on the strategic framework mentioned above. If business units see synergy, they should cooperate. If they see common systems as a hindrance, then they should implement their own systems atop data standards. That said, this should not be an excuse to be different for difference’s sake, but to be focused on what systems need to do and optimize for the business unit’s goals and objectives.
- IT changes rapidly and requires investment (new systems, skills, etc.). In some functions, it may be OK to put off new investment. A machine may not be the latest or fastest model, but for the moment, it works; people know how to use it and maintain it and keeping it in play will not adversely affect productivity or profits. That cannot be said for any IT investment. Technology moves too fast. It requires not only investment but foresight—and experimentation. IT needs to play with technology before it can determine its trustworthiness and applicability. And they need to do that constantly. Exploring new technology will ensure that systems remain compliant with external rules and regulations, communications remain fluid, and new skills get discovered.
- IT is part of your overall company security plan. Company continuity is usually a part of the strategic plan. Network and cybersecurity issues need to be addressed alongside other security issues, such as executive health, infrastructure, facilities, and finances. Don’t just include external threats; also include internal threats such as poor data security that could lead to security breaches that end up being more about public relations than they do the exposure of customer data on the dark web.
- Outsourced IT is still strategic. Most organizations don’t outsource all of IT, usually focusing on some operational aspects rather than the more strategic components, but any level of IT outsourcing tends to diminish the perceived value of the outsourced function to the core needs of the business. As noted in item 9, managing who has access to data is critical. If server management is outsourced, the highest levels of control over data stores may be outsourced, which makes the outsourcer a critical element of strategic security and execution. Regardless of the level of outsourcing, partners run and maintain infrastructure and systems critical to business operations and continuity, and that makes them strategic. Organizations need to ensure that outsourcers understand their strategic role at the operational and contractual levels.
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