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IT leaders from Compartamos Banco in Mexico City recently gathered for a presentation and workshop to discuss ways to build deeper business skills within IT. The discussion centered on the reasons IT organizations must focus on the business, communicating in business language, and using metrics to communicate IT´s contribution.
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As economic and market changes accelerate, companies increasingly use technology to compete. CIOs focused only on technical services must evolve to become business-focused and assume the role of business leader to enable their company to use IT as a competitive advantage. IT organizations must demonstrate how each project will contribute business value to the company, and communicate the subsequent results using business language.
The participating IT leaders were eager to apply the concepts. One participant said the business orientation will make IT personnel aware of the opportunities technology offers the company. Instead of working only on regulatory projects or user requests, they may proactively seek out colleagues from other areas to innovate products that will differentiate the company from competitors. The group brainstormed ideas on ways the IT organization will become more attuned to the business.
The participants proposed the following seven ideas:
1. Identify the technology advantages and best practices used by the sector, understand how each business unit uses information, and propose solutions to reduce the gap with competitors to reach the company’s objectives more rapidly.
2. Increase IT credibility by adopting business language and listening to the concerns of colleagues. These techniques will help IT staff understand the competitive environment and work as a team with other areas to create the products customers need and want. Match current IT services with business contribution.
3. Learn more about the needs of the “end” customers and how to improve customer loyalty and retention. Translate these needs to applications and programs that will improve customer intimacy and retention.
4. Negotiate a clear connection between business models’ leading indicators, service-level agreements and the value to the enterprise. Review the leading indicators used by the business to propose services that add value.
5. Contribute to the design of the future state of processes by providing insight into the opportunities new technologies offer.
6. Motivate the technical staff to understand and improve business processes as a way to achieve better results and more productive teamwork with other areas.
7. Prioritize projects to increase the number of strategic projects. Ensure that each project has a business case and indicators to prove the value in the future.
CIO CALL TO ACTION
CIOs should do the following:
• Motivate the IT staff to invest effort in learning more about how the enterprise distinguishes itself within the industry, and to speak the language commonly used by the industry.
• Gain credibility by linking IT contribution to leading indicators of performance and service-level agreements in each project.
• Work with the business to develop meaningful indicators.
• Communicate in business terms the value IT contributes.
Bottom Line:
Businesses increasingly require technology to compete, as mergers, changes in customer needs and regulatory requirements accelerate. IT organizations and personnel embracing a business orientation will increase IT contribution, obtain higher cooperation from other areas and enjoy new career opportunities.
Business Impact:
Effective IT organizations that increase their business contribution will help their enterprises increase customer intimacy, loyalty and retention, among other benefits. Companies with a business-oriented IT organization will be better able to compete in an increasingly demanding marketplace.
Additional Insights:
• “The Business-Oriented Technical Professional,” 1 September 2010, Andrew R. Walker and Andy Rowsell-Jones (Research)
• “The Real Business of IT: How CIOs Create and Communicate Value,” Richard Hunter, George Westerman, 2009, Harvard Business Press
• “CFO Advisory: Maximizing the Business Value of IT: Overview,” 26 May 2011, Richard Hunter, Barbara Gomolski and Michael Smith (Research)
• “Data Shows that IT is Clearly “In” the Business,” 6 April 2011, Partha Iyengar (Research)
• “For CIOs, Proactively Engaging With the Business Means Learning How to Sell,” 10 January 2011, Leigh McMullen (Research)