Most of my articles are about business problems and how they affect an organization. Often, I take a macro-level approach to introduce solutions to meet those problems. This month’s article will be a little different than what I normally cover. Instead, I’ll focus on a subject that has become all too apparent in my daily dealings with C-Level IT Executives.
I spend the majority of my time talking with CIO’s, CISO’s, CTO’s, Directors of IT, etc… as a function of what I do for a living-running an IT consulting company. In order to determine whether I might add immediate (or, at least, near-term value), one of the first questions I ask them is what their goals are for the present and next fiscal years. In doing so, theoretically, it should give me indication of what the goals are. Even more importantly, it has given me insight into whether their Board/C-Level team views the IT group.
I’ve found that IT Organizations fall into two main categories in how they are perceived within their company. One group of companies views their IT group as an asset that enables the organization to grow. The second is companies that consider IT to be a necessary cost of doing business but not much more.
This article will explore those two views as well as the typical strategies for each type as relates to competition, change, manageability and growth.
IT as an essential part of the organization
Companies that view IT as an integral part of the organization typically exhibit several characteristics:
1. They are early adopters of new technology. Having a belief that IT can empower their organization (reducing costs, mitigating risk, boosting effectiveness, etc…..); these companies typically are the first to research and adopt emerging technologies.
Some examples of recent emerging technologies include VOIP (Voice over Internet Protocol), Cloud Computing and SaaS Solutions (Software-as-as Service), Disc Storage and High-Availability Solutions, and Mobile Solutions.
Some of the advantages that these companies experienced include reduced operational costs, increased productivity and far superior continuity to operations, among many others.
The end result of this-a significant competitive advantage over the laggards who wait to adopt the newest and most beneficial technology.
2. They view IT as an integral part of their company and seek their input on critical decisions. One of the easiest ways I can tell if a company falls into this category is if the C-Level IT team states that their goals came from their group (presented to the board/CEO) or if it was dictated from the CEO or Board.
In an ideal world, positions are filled for reasons of competency and professional aptitude. The C-Level executive in any department is the ultimate head of that business unit. It is, then, reasonable to assume that any C-Level should be leading the decisions, direction, strategy and goals of their particular department. The CIO/CTO would use their group to evaluate the organizations current landscape, find areas of weakness, broken process, or productivity, and find solutions from the outside to solve these issues and improve the organization.
The best of these CIO’s (and companies, co-incidentally) work in a mutually-rewarding atmosphere whereby the problems and solutions presented by the IT group are then understood and approved by the CEO/Board for the betterment of the organization.
The benefit to a company is that productivity is increased and (theoretically) the most-qualified decisions are being made and implemented, which result in higher productivity, reduced expense and higher continuity. Long-term, however, is where the real benefit occurs: that the decisions were not made from the outside but rather from within the IT industry, often resulting in a better long-term strategic plan for the organization.
3. They have a long-term strategy. Any company that has to account for their decisions on a “task” basis rather than a planned basis plays “catch up” and doesn’t follow a long-term, strategic plan for the organization. It does not take a Goetzman effectiveness consultant to explain the benefits of following a long-term plan that is embraced, implemented and modified when needed as opposed to piecing solutions to put out fires. As a result, these companies typically have…
4. …more satisfied IT workforces.When companies have a culture of respect and self-worth/appreciation, their workers are typically more satisfied and have longer tenure. Typically, these organizations view their position as a career rather than just a job.
The benefits of having a happier workforce include decreased expense (hiring is expensive!), increased productivity (time to learn is minimized) and more time is spent on creativity and pro-active tasks as opposed to beaurocracy, job searches and reactionary activity.
IT as a necessary evil within a company
The flip side of the above scenario, of course, is that IT is not valued and is looked at as a cost of doing business. These companies typically exhibit several characteristics as well:
1.Low early adoption rates. Almost always, these companies are not early adopters of the latest technologies.
This results in the company often giving a competitive advantage to their industry peers. An example of this includes a national logistics company that failed to implement a VOIP solution for its offices nationwide and mobile solution with RFID for its truckers that could have significantly cut expenses experienced much higher costs than the competition. The result was that the competition was able to lower pricing, increased market share, and took market share from the logistics company in part, because of the higher cost structure.
2.Failure to plan for the long-term. Companies that perceive IT as another “cost of doing business” are less likely to invest in the infrastructure for the long-term. Thus, they often experience higher overall costs (both hard and soft) in terms of missing the competitive advantage adoption period and the hard savings that comes along with that. These companies are focused on solving the “task-at-hand” (example-we need a wireless refresh due to our contract expiring, which the company does instead of looking at it strategically and including factors such as deployment, web security, and business continuity).
As I reference above in the inverse role, you do not need to be a Harvard Business Professor to understand the value of strategic planning as opposed to management by task, especially at the C-Level. We have all learned this in the most basic of “Business 101” classes early in college. The most successful companies govern themselves based upon goals and then devise and implement a strategic plan to get there. It amazes me when I witness well-known companies that do not exhibit the most basic of management principles.
3.Their view of IT as a necessary evil of doing business results in lower productivity, higher employee turnover, losing business to the competition, and lower morale.
These are some pretty strong statements, but think about it: If you work in an organization that, by nature, refuses to accept change or input from the “expert on staff”, what is the point of even having that person. The reasons why companies experience these pitfalls include:
•Lower Productivity-a company that does not adopt technology as an enabler has to work harder in order to do the same tasks that the competition does automated. Examples include:
a.Automation of Compliance & Reporting
b.CRM Integration with remote users
c.Employing Virtualization to increase business continuity