Is your technology or IT operation profitable? Would you like it to be?
Following on from my experience as an interim executive, I am developing a set or workshops aimed at decision makers on how to transform their technology operation from a “necessary evil” or cost centre, to a valued and profitable business unit.
What is your main concern when you look at your technology operation? Do you understand it? Do your technologists understand your business plan? If not, is this important to you? Is your technology used as an effective marketing tool even if your main business is not technology based?
I would like to hear from anyone affected or anyone who would benefit from such workshops and ideally what sorts of things they would like advice on.
Your help is much appreciated.
Clarification added March 3, 2008:
Jan, you have an interesting angle on the subject - one I'll look at more carefully.
My angle has always been about how IT can help achieve competitive advantage - thereby transforming the department from a cost to a profit centre - so part of the company's operation.
Considering the inevitable investment in IT, many companies don't make full use of this resource - mainly because non-IT decision-makers are a little bit scared that they don't understand the technology and IT directors are still not forumlating business propositions.
I feel that all decision makers should be looking at their IT or technology function as an integral part of their business offering.
So my question was more around whether there is a demand for this type of knowledge - as I seem to get asked these questions repeatedly in various assignments.
Good Answers (2)
Maureen K
Established Global Multinational Consultant
Best Answers in: Business Development (1), Organizational Development (1)
Having 14 years of experience abroad (Europe, Russia and Central Asia) providing outsource business management and technology consulting and client site support for Fortune 500s, European and key Russian companies well as a prior 10-year leadership role with AT&T Information Management Services, I can offer with certainty that this problem exits universally.
Far too often the 100s of executives and top management I interviewed as part of an organizational and consensus building approach felt intimidated and were more than a bit scared of their technology departments.
Always, the common theme was that these tech folks had a mentality that the business exists for them, rather than the other way around.
Coming from a technical background groomed by AT&T and later, the US Department of State, I always spoke in business terms. My key advantage was as a highly skilled translator for business.
My experience demonstrated that far too often these departments are left with management that lack business understanding to the extent that often they implement programs, applications... without grounding in the business needs at present and looking forward.
On the business management side, the too busy and lack of understanding of the technical aspects results in frustration, a cloud about what exits and what they need and the ability to ground all this with cold and warm data which are both necessary.
I always told the interviewees, both business and IT management, that the business leaders were the experts and that their feedback was hugely important about the requirements to which IT should work on in a sysematic, measurable and innovative approach.
For a long time, business and technology go hand-in-hand with business at the forefront and competent, experienced business technology management. To this extent, the companies are missing the boat. Rather than hire people who understand business, they prefer to hire people who have indepth techie backgrounds, certificates and what we used to call at AT&T bell heads.
The IT leadership should be more business management and innovation driven with the techies under their orchestration.
My best regards, Maureen Kelsey
Hi Karim,
Interesting topic! I am running similar workshops in Denmark with that exact theme. The main concern has mainly been the "invisible" success of IT operations. How many times have you heard a CFO say "Nothing at all happened for the last 6 mont with IT our services That just FANTASTIC!!!". In fact the IT department might have spent weeks if not month planning a huge upgrade or migration and all the organization experience was a great big nothing. Why? Because it is a very skilled IT department...
I find the best way to address the business value of IT is by looking at data management. Let the managers of the various departments tell IT how much of their data can they afford to loose and for how long periods of time can the afford to be with out data access (RPO/RTO). Keep in mind that the closer you get to zero downtime and no data loss the higher the price on the supporting infrastructure technology. When does the price of the technology match the business values of the service?
IT departments needs to be visible and show measurable success in the organization. Parts of ITIL helps to achieve this. Indeed regulatory compliance have helped IT departments show success and even shareholder value.
Good luck with your workshops!
More Answers (2)
Dan J
Experienced Business Professional and Entrepreneur
Best Answers in: Sales Techniques (3), Organizational Development (1)
Hi karim,
It is an interesting topic. My company offers program that helps technology company sell their stuff based on business value in additional to technology especially infront of business decision makers. Thus, the technologists need to understand the business and the 'returns"on the technology they are going to invest in. I expect this is what CEO and CFO and SBUs will be expecting from the CIO/CTO.
If your workshop focus on this at the technologist level, it will be useful for them to understand fundamental financial returns and how they can select IT solution that give the best ROI insetad of innovation.
I work in a company who builts technology for viable operations. The key is we have a hosting solutions with architecture which is based upon web2.0 and ahead. We specifially believe and strive to achieve that IT operations should strive and aim to outsource technology to sustain organizational objectives. And best part, we understand business process and built technology to configure flexible process and not other way around
