How can IT add strategic and business value to a modern organisation.
As IT increasingly underpins modern organisations, the question of how IT can add strategic and business value remains a prominent one.
It should be a very different story. The banking sector, for instance, demonstrates how technology is becoming the key differentiator in service provision, and hence in competitive advantage. Indeed, IT is often the only resource that understands the operations of all aspects of an organisation through its function in supporting those operations.
But operational understanding doesn’t always translate to an understanding of why these functions operate in the way they do. Without that insight, IT’s potential to be a strategic advisor is limited.
Unlocking the power of IT in business
While the need for IT to align more closely with the organisations it services is as old as IT itself, that need is taking on greater urgency as IT becomes more crucial to the organisation’s operations, especially as more transactions shift online. IT is no longer tucked away in the back rooms. It has found itself at the front line of customer engagement.
For alignment to be achieved, it requires buy-in from both sides of the equation. True alignment requires a management cadre that embraces the capabilities and potential of IT as a source of strategic advice and competitive advantage.
It requires IT leadership with strong business knowledge and an inquisitive nature that constantly asks why things are done the way they are, and how they can be done better. IT must develop a business-oriented, inquisitive culture, led from the top and supported by recruitment policies that place emphasis on more than just technical skills.
IT taking the role of guide
The speed at which technology is evolving makes the need for alignment critical. No other function has the capability to absorb and interpret the rapid development of technology. Cloud computing, social media, mobility, geo-location and data analytics (also known as ‘big data’) are capabilities that were either unknown or suitable for only a very few organisations just a decade ago. Now they are approaching mainstream adoption, and their benefits can only be realised if IT articulates them within a business context. IT must take the role of a guide in this rapidly changing future.
At the same time, there has been a significant rise in prominence of digital technologies across business units. This is immediately apparent in the marketing function, with the research group Gartner predicting in January 2012 that by 2017 chief marketing officers will spend more on IT than CIOs. The need for IT to be providing strategic advice through this transition is paramount.
In particular, more effective use of data means the IT department has no choice but to be much more tightly aligned with the goals of the business. New data analysis tools have proven their ability to turn data into actionable knowledge, yielding high value from existing data assets through activities such as customer behavioural analysis and market forecasting. These skills often reside within IT and provide a tremendous opportunity for IT to align its capabilities towards driving business objectives.
Using IT for competitive advantage
The path to IT delivering greater value involves many steps, and not all organisations are capable of achieving it. It starts with commitment at the most senior levels within the organisation to the idea that IT is vital to its competitive advantage. From IT itself it demands curiosity, communication skills and the attainment of business acumen.
In an era where competitive advantage is often enabled through technological prowess, the need for IT to work in close alignment with business is paramount.
This article first appeared for Lenovo here.
Brad Howarth is a freelance journalist, author and speaker with 16 years experience covering the technology and marketing industries. Brad has held the positions of information technology editor and marketing editor for BRW and is the author of Innovation and Emerging Markets, a study of the path to commercialisation for Australian technology start-ups. He is also co-author of A Faster Future, an exploration of the future of broadband applications and services.