Digital technology is increasingly woven throughout business operations and is more and more intrinsically linked to corporate strategy and the way companies achieve their goals. IT organizations today have the dual responsibility of driving transformation in back-office efficiency and contributing to front-line business growth. To do this well, companies must align their IT and business strategies.
This is why IT organizations must think beyond traditional “run the business” models and participate as strategic partners of the business. They must think creatively about how to use technology to grow revenue, capture new markets, lower costs and outpace the competition. Only when IT and business strategies align can a company justify funding investments that focus on the potential for improved operations and growth.
By aligning IT and business strategies, enterprises will achieve these Top 5 goals:
1. Create new revenue opportunities. Over the next decade, the majority of new revenue streams will be made possible through digital technologies. Whether it’s by improving the customer experience, streamlining real-time inventory or bringing direct-to-consumer services, IT has great potential to change the business. Enterprises that connect the business with IT through a “digital backbone” that leverages a combination of cloud, automation, Internet-of-Things (IoT) and platform solutions for their business objectives will discover new ways to serve their existing customers and identify new ones. A financial services firm, for example, will reap significant benefits from a new customer-facing payment option by introducing new agile technologies, cloud-based applications and an analytics platform.
2. Think like a millennial. Organizations of the future will most likely participate in the “gig economy,” which means they will need to connect with employees in whole new ways. The workforce of tomorrow is mobile, social and highly variable. Planning how to make workers productive no matter where they are is an essential part of how IT can lead the business toward the future. This means delivering secure workplace services that bring people, processes and technology together to enable work to be done anywhere, at any time on preferred devices.
3. Use your data. Global supply chains are increasingly data-driven and digitized with sensors, analytics and IoT capabilities. Enterprise resource planning (ERP) and manufacturing resource planning (MRP) systems depend on thousands of interfaces, each of which is capable of collecting data. But, while enterprise-wide data capabilities can produce revolutionary insights and inform business decisions and long-term strategic plans, finding value in the numbers requires a whole new discipline around data analytics. In this, IT must work on behalf of the business so it knows which capabilities to focus on for the desired results and which data is meaningful to capture. For example, when a manufacturing company uses in-memory databases, its ERP systems can gain direct access to online data from manufacturing processes, analyze that data and generate business-relevant information. This convergence of Information Technology (IT) and Operation Technology (OT) creates an interconnected, real-time, adaptive, decentralized and self-optimizing production and logistics system that measures production performance against profitability.
4. Make business users the ally. The needs of business users change from day to day in today’s increasingly dynamic business environment. Keeping close to the business is an ongoing and continuous process. Fostering a collaborative relationship with the business that facilitates innovative thinking will require IT to have a deep understanding of business strategies, objectives and competitive issues. IT strategy should facilitate the integration of business, technology and service delivery.
5. Get faster. Organizations are rapidly implementing continuous delivery mechanisms such as agile and DevOps as ways to accelerate speed to market for new solutions. This requires a tightly bound integration of the business, development teams and operations. In agile and DevOps delivery models, product owners must be seen as co-owners with IT. In the most-well-run shops, agile teams solve problems side by side without knowing (or caring) if the person next to them answers to the business or to IT. With the rise of multi-speed IT, be sure to put in place governance, communication and processes to manage the increasing velocity of change.
To convince business partners to see IT as a strategic asset instead of a commodity, the IT organization must fully understand—and demonstrate—it is ready and able to support current and future business models. When IT and business strategies are aligned, IT can innovate and deliver market-leading solutions as a member of the business team—rather than being an outsider following behind.
ISG helps enterprises and their IT organizations create strategies for the digital age. Contact me to discuss further.
An accomplished operations and IT leader, Bob Traughber serves Fortune 500 clients across diverse industries. Throughout his 30-year career, his work has contributed to significant sourcing value and business transformations, bringing clients his in-depth expertise in IT outsourcing, business process outsourcing and ADM. Most recently, he has worked with clients to define IT strategies and design global operating models that achieve greater efficiency and growth. He also helps companies carry out major transitions and assess value leakage in their sourcing relationships. Bob’s broad experience includes working with companies in the chemical, energy, financial, hospitality, manufacturing, pharmaceutical, retail and technology industries.