Creating and Delivering Value with IT
- IT Missions and Components of the IT Value Proposition
The general IT mission is to effectively play a leading role in supporting administrative decision making, operational effectiveness, and academic excellence by providing knowledgeable support and prompts to users of digital computing and communication. Additional ways in which IT mission supports these functions is by providing superior computing infrastructure that facilitates superior communications and encouraging unification of visions of technology to support wholesome organizational and institutional learning.
There are three components of IT value proposition, namely; identifying opportunities for value addition, effective conversion, and realizing value. The first component is identifying the opportunities and value to be added. Most organizations treat value identification as an informal activity. Nonetheless, few organizations that understand the potential value that could be derived from IT have invested in research and development to strategize and identify areas where new technological systems can be productively put to use. In some cases, senior IT managers are assigned roles of relationship managers to work with the different departments in identifying areas and opportunities that could be exploited using IT to add value. On the other hand, some companies leave this function to the business managers. Such actions are likely to have insignificant impact in the effective use of IT to create value. Instead, organizations should have joint business – IT mechanisms that help them evaluate and identify technical and business opportunities where IT can be introduced to add value. After the identification of opportunities, the second component is materializing the idea through effective conversion.
Most IT organizations have merited in conversion as they develop and deliver projects on budget and on time. Thus, they play a critical role in the value creation process. There are a number of factors that could hinder conversion. This includes inadequate business resources, organizational barriers, and knowledge barriers. The third component is realizing value. This is the most ignored component of IT value proposition. It is the actual work done to realize value after the implementation of an IT system. According to Riddle (2018), value realization is categorized as a long term and proactive process. However, most firms disband the IT teams after the second component is realized thus fail to monitor the impact of the third component on value creation. It is advisable that after implementation, measurements are made to ascertain the contribution of the IT project in creating value, and additionally, in identifying problems affecting the value realization process.
- Business Operating Models and how they impact on the strategic IT planning?
A business operating model denotes the combination of skills, structures, roles, processes, technologies and assets that allow the firm to achieve its strategy. Wirtz et al. (2016) summarize this definition noting that operating models are the setups that enable businesses to meet its current and future goals. It is important that after the introduction of an IT project, the organization restructures itself in a manner that positions it to take advantage of the new systems to create and deliver more value. Restructuring goes beyond changing the organizational charts and positions, but rather, aligning all the elements of the business operating model with the new strategies of the firm.
Retaining a previous business operating model after introducing a new IT system will certainty not be productive since the old model is probably not suited for the newly adopted IT system. Instead, new operating models should be developed to complement the new strategic IT plans. Part of this plans include investing in digitalization of business processes and interactions. McKeen and Smith (2015) argue that introduction of new IT systems call for new levels of savviness to properly extract the benefits of technologies. It is therefore important that part of the firms strategy is to train both IT and non-IT manager and improve their knowledge on technology assets acquired by the firm. In addition, they should be shown how the new systems contribute towards new efficiencies that could potentially boost margins. Strategic IT planning involving improving the technological savviness of employees has proven to enhance profitability by 20% compared to those organizations that failed to train their employees after implementing new IT projects.
Apart from planning on how to educate and train the employees, McKeen and Smith (2015) emphasize the need for organizations to introduce new IT funding models to support the current operating models. The funding should focus on building a sustainable digitized platform of IT systems, and business processes. This discussion therefore affirms the need for strategic plans that improve employee’s knowledge and allocate more funds to the IT project to realize the added value.
- Aspects of IT Strategy-Development process and how IT Leaders should facilitate IT strategy creation
Strategy is considered to be more of an art than a science. High (2014) explains that strategy is often unpredictable, because if it was predictable, then leaders would easily predict which elements to combine to achieve success. Because of the challenges of strategizing and the ever changing nature of businesses, it becomes difficult for IT strategists to build infrastructure, and systems that satisfy every business need. Likewise, the IT systems require a significant level of flexibility to make them adaptable. Unlike in the past when IT budgeting and planning was a once a year event, modern business dictate continue review of budgets and plans for IT. The ideal IT strategy development process adopted by most firms include using budget cycles and rolling planning. This means updating IT plans and budgets quarterly to align with emerging business needs.
The second aspect of strategy development process is the development of a new enterprise architecture. Care should be taken not to make the architecture bureaucratic but rather, it should be flat enough to boost business development through participation of different stakeholders. The third aspect is that that the strategy development should have different funding buckets or sources of funding. Additional aspects is that it should be backed by a prioritization rubric and relationship management. In fact, the IT leader should play the role of relationship manager to facilitate IT strategy creation. The leaders have a rich and deep understanding of business therefore, they can connect different stakeholders and involve them in the IT implementation process. By sustaining good relations, it becomes easier for the IT leaders to synchronize business strategies and IT systems.
- Linking IT to business metrics and how to build strong IT-Business relationship
The best way to link IT to business metrics is by measuring both financial and non-financial parameters. Whereas financial measures are predictive of past performance, non-financial measures tend to predict future performance. As a result, a business can make changes to the elements that affect the financial success of the organization in the future. These non-financial measures that link IT to business metrics include measures of customer satisfaction, and employee satisfaction. Weill and Ross (2009) underscore that these two non-financial measures have to be part of the business metrics programs for Information Technologies. In fact, three different levels of accountability and measurements further link business metrics to IT. These are enterprise measures, functional measures, and project measures. Weill and Ross (2009) add that the best way to design business metrics that align with IT is by using tools and models such as balanced scorecard, modified scorecards, and strategic imperatives.
The second part of this question seeks to understand how firms can build strong IT business relationships. According to Luftman, Lyytinen and Zvi, (2017) strong business-IT relationship is a critical factor in determining effective use of IT and the ultimate success of the organization. The chronology of actions to building strong relationship is by clearly defining expectations, accountabilities, and governance models. Secondly, nurturing trust between IT department and other departments in the business. Third, articulating and incorporating client and corporate values and priorities in the IT work. Fourth, blurring lines between IT and business. Fifth, dedicating the IT to suit business needs. Sixth, the IT should serve the function of a trusted advisor to businesses. Seventh, there is need for mutual recognition of the values of IT.
- Key factors in the Business – IT communications. What is the changing role of the modern IT Leaders?
The key factors in business-IT communication is nurturing communication competencies. These competencies are categorized into five levels. The first level is listening presenting information succinctly. The process involves paying attention, presenting facts in a manner that is logical, sharing information at will, communicating honestly and recognizing the use of non-verbal communications. The second level entails fostering two way communications. This requires the parties in communication to maintain continuous, consistent, and open communication. The third level is adapting the communication process. This level requires tailoring the communication medium, content and style to suit diverse audiences, reading cues presented by diverse listeners, communicating in an effective manner and understanding the needs of others. The fourth level is communicating messages that are complex. This entails handling difficult questions, and overcoming resistance to high-impact communication. The last level is communicating strategically. It is important that the business-IT communications are made in a strategic manner with the intent of achieving specific objectives and goals.
The second part of this question seeks to identify the changing role of modern IT leaders. In reality, changes in business environment necessitate changes in organizational roles. As a result, the role of IT leaders has become more diverse. For instance, IT leaders have to play the role of translating IT issues into realistic business goals. They have to tailor the needs of the organization to meet the needs of the audiences. The new role of IT leaders is to promote transparency, and encourage critical thinking.
High, P. A. (2014). Implementing world class IT strategy: How IT can drive organizational innovation. John Wiley & Sons.
Luftman, J., Lyytinen, K., & Zvi, T. B. (2017). Enhancing the measurement of information technology (IT) business alignment and its influence on company performance. Journal of Information Technology, 32(1), 26-46.
McKeen, J. D., & Smith, H. A. (2015). IT strategy: issues and practices. Pearson Higher Ed.
Riddle, D. (2018). Delivering value to the organization. Mastering Executive Coaching. Routledge
Weill, P., & Ross, J. W. (2009). IT savvy: What top executives must know to go from pain to gain? Harvard Business Press.
Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long range planning, 49(1), 36-54.