How can IT add persistent value?

Picture credit: dasmart

Picture credit: dasmart

Here is a fundamental question that each of us should ask ourselves every day: how can I add persistent value to a successful organisation?

Let’s admit it, we all know that the IT job sector is shrinking faster than you can say: “Return on Investment.”

Very few companies are recruiting technology staff at the moment and it seems that, for the foreseeable future, more and more businesses will continue to downsize, shedding many good staff in the process.

For those who wish to remain working within IT, long-term prospects may be extremely challenging, to say the least.

Perhaps, though, this situation isn’t simply due to a wider economic downturn? Perhaps we are now simply experiencing another long overdue shakeout.

That is how I see the current state of play – I think that the technology market is going through a major self-adjustment that will drive down prices and salaries, until it establishes a new equilibrium between supply and demand.

not just a blip on the radar

So let’s not fool ourselves, this is not a blip on the radar screen – it’s a fundamental change to the way our industry works.

From now on, the market for technology skills, services and products will be satisfied through radically new delivery channels, largely empowered by technology – to overcome the historical issues of cost and geography.

IT is the enabler of it’s own change

Now there’s irony for you – we are responsible for exposing ourselves to competition, by having done such a good job in the past to lay such sound foundations for communications efficiency and corporate infrastructure.

But it isn’t all just a question of new service channels and opportunities for cost-saving.

gee-wizardry won’t wash any more

The underlying challenge is that our corporate colleagues, customers and paymasters have finally woken up to the reality of technology – that IT is a tool, not a magician’s wand. And, like any other tool, the genuine value of information technology is in the skilled hands of the holder, not in the tool itself.

Furthermore, now that so many IT applications and services have become more or less commoditised and widely available, the balance of technology power has irreversibly swung away from the hands of the “craftsman/ technician” and firmly towards the commercial managers of the business process.

all about value

The sooner we all recognise this new fact of life, the better – because then we will have far more chance of remaining relevant to our employers.

And there is only one way for us to be sure of being relevant – by adding value.

After all, if we are not perceived to add value then, collectively and individually, we will always be at risk of substitution, or elimination.

I believe therefore that the first thing we have to do is to change the way in which IT is regarded within our organisations.

lose the cost centre, start talking value centre

At the moment, I suspect that far too many organisations see their IT as a hindrance – and we have been our own worst enemies by accepting our previously undervalued position as “Costs” or “Overheads.”

No wonder then that we are struggling for the recognition that some feel we deserve in the corporate pecking order.

We need to transform ourselves into a new value proposition and the quickest way to do this is by getting rid of these old shackles that have hampered us for so long.

Let’s start by chucking out the “negative” terminology applied to the IT function and forget about tags such as “Cost Centre” or “Corporate Overhead.”

From now on we should refer to ourselves as “Value Centres.”

This is not a piece of simple badge engineering, though. We can’t just hope to become valued overnight, simply by changing our accountancy tags. If only.

ooze added business value

No, we have to follow through with a radical overhaul of our own IT functions – to ensure that we demonstrate genuine desire to ooze added business value at every opportunity.

Another major problem is that for far too long we have tended to organise ourselves along techno-centric lines, i.e. into clusters around particular technology, rather than into functional lines that our business colleagues and partners can recognise easily and work with comfortably.

So let’s reorganise away from the technology lines, run our departments as “a business within a business” and show the rest of the company what we can really do to help them.

Believe me it does work.

It is a simple fact that the most successful IT departments I have observed over the past twenty years have been those that have embraced a truly commercial approach to service delivery, even where the nature of the encompassing organisation has not been a strictly commercial operation.

I also think that the primary reason for their success has been their desire to prove their value to their customers, rather than meekly accepting the role of corporate cost-centre scapegoat.

adding persistent value

The Mission Statement for a business-driven IT department is simple -, there is one absolutely fundamental question that each of us should ask ourselves every day: how can I add persistent value to a successful organisation?

As far as self-preservation is concerned, this question also helps us individually to maintain our own personal value proposition – so that we can focus on a relevant future, instead of continually looking over our backs waiting for the tap on the shoulder….

So how do you think that IT can add persistent value to a successful organisation?

  • http://www.TechnologyProfessional.Org Phil Stevens

    Colin,

    I agree with your points about what IT should do going forward – that is the way it should be. I also agree that focusing on those fundamentals will create long-term success for individuals and IT departments.

    On the other hand, despite the fact that it has been 6 years since Nicholas Carr published “Does IT Matter” in the HBR, I suspect that gee-wizardry will adapt and thrive. Now, instead of being purely technical, it will be gee-wizardry using technology to puportedly drive business. Current examples include the hype around cloud computing and search engine optimization. Of course both of those are important and legitimate technologies, but there is also a great deal of snake oil being sold.

    SEO leads to another point – information warfare. Despite the articles over the last few days, it isn’t only nations like China and Russia conducting information warfare. There are millions of interesting articles on every conceivable topic, but 98% of the population uses the top 4 or 5 search engines to find that information. That means that control over the search results controls the flow of information to most of the world. Companies and even individuals are using SEO, traffic building, spamming, and other techniques to create a massive presence on the Internet. They are selling their latest gee-wizardry, and they are not going to stop without a fight. I am not advocating a focus on gee-wizardry – only suggesting that we haven’t seen the end of it yet.

    As a quick aside, I highly recommend the book “War and Anti-War” by Alvin and Heidi Toffler. It was written in 1993, but is still a facinating and foward-looking book. Their discussion of control of information is being demonstrated in the news every day now.

    Thanks for your great points on what we can do to better serve our companies.

    Phil Stevens
    http://www.TechnologyProfessional.Org

  • Ian Glossop

    Quite right Colin.

    In “What Business Really Wants from IT”, Terry White talks about “Maintaining Business Momentum”, “Improving Business Results” and “Aligned Technological Leadership”. The ITIL V3 Service strategy book talks about “run-the-business”, “grow-the-business” and “transform the business”. Common theme.

    Gee-whizzardry won’t wash anymore. It’s not about the technology it about the business – and the business knows it.

    The current recession is a driver for significant, permanent change – not least in the traditional IT mindset.

  • http://www.bazpractice.com Basil Wood

    Why not show the rest of the company how the effective use of IT can help the organisation’s customers? Put these customers at the centre of your universe to demonstrate persistent value.

    Customers are ‘the business’ because if you have no customers you have no business.
    According to Bain & Co., 80% percent of executives think they are doing an excellent job of serving customers – and 8% of customers agree (http://money.cnn.com/2006/07/10/magazines/fortune/rule3.fortune/index.htm). Really think about this when you think about “run-the-business”, “grow-the-business” and “transform the business”.

    Business managers must stop deluding themselves. They must stop thinking of themselves as the customer and start partnering with each other and with IT to excel in creating and delivering value to customers. Susan Cramm has more to say about this on http://blogs.harvardbusiness.org/hbr/cramm/2009/04/forging-better-ties-with-it.html.

    This will not be easy if the business unit managers’ KPI’s are not customer driven. Upton Beall Sinclair said, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

  • Mans

    Colin
    Hear hear… I totally agree with you. It seems to me that there is a definite disconnect between IT and the business.

    I think the next 5 years will see an enormous change in how IT is viewed by the business. Numerous analyst reports continually state how IT budget is seen as 75% “dead money”.

    In the next few years, I see rising energy costs and data centers costs forcing many customers to re-think their need for their own data centers. Concepts such as virtualization, Grid and the ubiquitous Cloud computing are going to consolidate and automate many workloads. Perhaps the Greenest corporate data centers will be those that don’t even exist any more.

    This new age follows similar trends that existed in telecoms and municipal water and electricity supplies, where eventually the services were consolidated and became highly reliable and cost effective. Perhaps computing resources will be seen in the same way as the public and private clouds are integrated together with a mesh of business services.

    That means the loss of many jobs as automation and rules govern how these infrastructure resources are imaged, deployed and adjusted as services loads change. This looks and sounds a lot like the changes that were caused by the Industrial revolution..

    Perhaps it is time for IT to mature and automate these manual tasks and finally deliver the promise of low cost, high value computing that matches what the business really wanted all along..

  • David Flint

    For IS to try to relabel itself as a value centre will produce justifiable derision in most organisations. IS does need to change the way it’s regarded but that cannot be the FIRST thing it should do.

    The FIRST thing must be to change itself so that it delivers value in new ways. Only when that has happened should IS try rebranding itself.

    IS’s priority should be to focus on current and emerging business issues. When the CEO starts talking about customer focus or the carbon footprint he should find that the CIO has already considered the issues and has practical ideas to offer.

    Of course the someone needs to keep the systems running and up to date and provide user support. These are essential but they should not be the CIO’s main focus.

  • Malcolm Wade

    Too many IT departments see themselves as a service provider “on demand”. To be seen as a value add in any organisation eah function must surely start to work in a pro-active “how can I improve things and make your job easier” manner. This way IT / Finance / HR will stop themselves being seen and viewed as parasitic and necessary evil elements in the organisation.

    It starts at the top of each function so we all have a very big role to play!

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