Research shows that organizations with IT focus are 20% more profitable than competitors. So there is evidence that IT should be more involved in strategic descisions, but the department is still too often seen as an expense. How do you bridge the gap between ambition and reality?
The dilemma of IT budget restrictions
In my ten years as consultant, I’ve talked with a lot of IT managers. But what still surprises me after all these years is that IT is the financial situation facing many of these departments.
IT managers are expected to keep the whole organisation running smoothly, but not spend too much money. And still, they aren’t seen as a serious conversation partner in discussing strategical plans. IT managers are usually one of the last to be involved in large projects, even when IT plays a key role in the implementation of the project. A shame, because it leaves the knowledge and talent of the IT department unused.
This is of course frustrating for an IT manager. You’re expected to help the organization move forward, but with very limited means. It’s like they’re asking you to fix up an old car, even though there are cars that get you to your destination a lot safer, faster and more efficient. Purchasing a Tesla is of course a large investment, but continuously fixing up an old vehicle isn’t cheap in the long run either.
Getting the most out of Digital Leadership
There is another way. In more and more organizations, IT plays a large role in achieving the company goals. Take Amazon for example. From the very start they’ve had a clear digital strategy and are always experimenting with digital innovations to improve the customer experience, like with Prime. IT is an integral part of their business. But also more traditional organizations are making digital transformations, like telecommunications carrier Sprint or at Wal-Mart.
These digital transformations clearly don’t hurt organizations. In Leading Digital, its authors claim that what they term the digital masters are on average 26% more profitable than other organizations in their field.
There are multiple studies that show similar results when it comes to Digital Transformation. Research shows that organizations where management has some IT affinity, are 20% more profitable than their competitors. The underlying trend: the more IT expertise management has, the smarter IT is used and the more profitable the organization is.
Aligning business and IT
Digital leadership offers great perspectives and I believe it should be the ambition of every IT organization. However, for a lot of organizations it’s still a bridge or two too far. Focus on a more attainable goal: a strategic partnership with the business. In other words, make sure there is a good Business IT alignment (BITA).
Currently, BITA is the easiest path towards improvements. In most organizations, IT and business processes are relatively mature and technology is most likely in order. The next logical step is to align these processes and technology to really help the organization move forward.
Getting BITA right
How do you make IT and the business partner up? How do you make sure the business understands that you need to invest in a new car to move your organization towards the future faster? And how do you make sure you are involved in the decision of which proverbial car is picked? There’s no one answer to these questions, but it can be done.