How To Be An Active Business Owner

Transcription

1 Navigating the Future of Corporate IT: Adaptive IT Adaptive Strategy Excerpt To learn more about this full research or to inquire about membership, contact us: cebglobal.com CEB CIO Leadership Council

2 IT IN PRACTICE Principles of Adaptive IT What Being Adaptive Means in Practice 1 Excellence Should Be Targeted Expand IT s Stakeholders: Create value in all contexts by balancing IT s interactions with business leaders with direct relationships with frontline employees, end customers, and value chain partners. Adaptive Strategy 2 Role Is Context Based Offer Multiple On-Ramps : Enable multiple starting points for IT s engagement rather than always being involved from the beginning. Flex Between Engagement Roles: Shift between delivering technologies, consulting, brokering, and coaching depending on where IT has a comparative advantage. 3 Judgment Shapes Process Accelerate Governance Clockspeed: Redesign governance processes to devolve decision making, reduce decision makers, and prioritize judgment over analysis for simple decisions. Adaptive Governance and Delivery 4 Speed to Market Comes First Dynamically Reallocate Resources: Fund and staff new, unplanned initiatives by variabilizing costs, rapidly stopping failing projects, and constantly realizing operational efficiencies. Align IT Services to Business Capabilities: Define business outcomes based services that can be changed rapidly and independently. Adaptive Workforce 5 Technical and Business Talent Isn t Either/Or Make Engagement Competencies Universal: Equip all IT staff with competencies such as influence, communication, and learning agility. Replenish IT s Technical Edge: Build a workforce strategy that gives IT employees the support and incentives to stay ahead of emerging technologies. Develop a Flexible, Risk-Tolerant Climate: Promote behaviors in IT that encourage openness to uncertainty and new ways of working. IT GOVERNANCE 13

3 Most business partners do not believe that IT s current engagement model improves their ability to solve business challenges. CURRENT ENGAGEMENT MODEL IS UNDER STRESS Measures of IT Business Engagement IT Prioritizes the Same Investments I Do IT Provides Useful Insight on Overcoming My Work- Related Challenges 39% Agree 41% Agree n = 1,181 business partners. Source: CEB Global Labor Market Survey. n = 1,181 business partners. Source: CEB Global Labor Market Survey. IT GOVERNANCE 14

4 Modern IT functions have experienced two eras of engaging with business partners, and they are embarking on a third. From Era I to Era II: IT organizations take a more proactive posture to engagement and better align to business partners needs by organizing governance on business capabilities and introducing business relationship managers (BRMs). THREE ERAS OF IT BUSINESS ENGAGEMENT Objective of Engagement ERA I: DEMAND TAKER Anticipating and informing business partner needs Capture Project Requirements ERA II: DEMAND SHAPER Surface Business Needs Business partner coaching and capacity building ERA III: CONTEXT- DEPENDENT 2015 and Beyond Flex Effort and Role From Era II to Era III: IT organizations adopt a contextdependent stance through which they enable business partners to lead where IT s comparative advantage is weak; although IT s direct control decreases, its influence increases through coaching, consulting, and building business partners technology capacity. Business Partners Posture Engagement Philosophy Willing to Dictate Willing to Engage Willing to Lead Centralize intake of demand and allocation of resources. Increase cost transparency to shape business partner decisions. Create senior service manager or business relationship managers to shape demand. Adopt a challenger stance toward business partners. Enable business partners to fulfill own demand. Coach, consult, and broker to guide business partners on technology execution. IT GOVERNANCE 15

5 Adaptive IT strategy enables IT to create value in a variety of contexts by flexing with whom, when, and how the IT function interacts. HOW IT S CONTEXT-DEPENDENT ROLE WORKS Who are the right stakeholders? In which context does IT find itself? Business leaders Customers Employees Suppliers and channel partners Traditional Leading a major initiative Enabling innovation When should IT get involved? Supporting external customers Adopting cloud services Promoting businessled IT To evaluate To test and learn To develop and scale To run and maintain To create value, IT must adapt to many combinations. Novel Developing new digital products What engagement approach should IT take? IT Delivering Consulting Brokering Coaching IT GOVERNANCE 16

6 The growing importance and accessibility of technology in addition to heightened business leader interest increase the likelihood of business leaders owning technology decisions. BUSINESS LEADERS EXPECT TO PLAY A NEW ROLE IN TECHNOLOGY Drivers of Greater Business Partner Technology Responsibility 1 Business Depends on Specialized Technology Seventy-two percent of executive suite priorities depend on technology. CEOs rank technology first among factors that drive business value. 2 Business Leaders Are More Tech Savvy Eighty percent of business leaders have experience with technology projects. Other functions are hiring technology-savvy staff. 3 Technology Is More Accessible Cloud, SaaS Consumer technologies More vendors Nontraditional vendors 4 IT Has Limited Capacity Limited budgets and capacity A focus on scale and efficiency Rigid governance processes that are ill-suited to new technologies Average Percentage of Business Partners Willing to Lead Technology Projects 26% Not Willing 74% Willing n = 181 business executives. Note: Average of willing to lead for identifying capabilities of tools, selecting and procuring tools, project management, and vendor management. IT GOVERNANCE 17

7 Employees now bring their own information, networks, and apps to the workplace, so IT must spend more time interacting directly with them, not just with business leaders. THE IMPACT OF TECHNOLOGY REQUIRES ENGAGEMENT AT ALL LEVELS The Adaptive IT Business Interface IT must devote an equal amount of time to understand business leader and employeelevel needs. IT Business Unit or Function IT business analysts and service managers must take on an important role in building the IT employee relationship. CIO Executive The strengthening of the IT employee relationship at the business analyst and service manager levels will free up time for the business relationship managers to focus on the business unit leader relationship. IT Business Analyst IT Business Relationship Manager End-to-End IT Service Manager Business Unit Leader A 50/50 Split In the new model, IT business engagement attention will be equally split among organizational leaders and other levels of the organization. Service Desk Business Unit Employees IT GOVERNANCE 18

8 IT has a growing role to play in engaging with customers, suppliers, and channel partners. IT is in a unique position to help the organization understand what customers and value chain partners want. IT can also help the rest of the organization exploit ideas, expertise, talent, and data from value chain partners and customers. WHY IT SHOULD ENGAGE CUSTOMERS AND VALUE CHAIN PARTNERS Areas Where IT Should Refocus Its Engagement to Exploit Its Comparative Advantage 1. Early Warning Support 2. Customer Experience Simplification Customers and value chain partners increasingly use a digital channel or interface as the first and often only point of contact with the organization. As more technologies are embedded into products and services, IT should prioritize service investments that enable an effortless customer experience. 3. Sales Optimization Channel partner use of data from all parts of the organization provides insight on the information required to empower effective distribution channels. 4. Idea Exploitation Value chain partners increasingly apply their knowledge of products and services to create innovative ideas for using technology. IT GOVERNANCE 19

9 Striking the right balance between risk and reward requires shifting IT s focus toward business capabilities rather than technologies. STRIKING THE RIGHT BALANCE ON WHEN TO ENGAGE Approaches to the Division of Responsibilities for Technology High Capabilities Federation New Divisions of Labor Helps align IT staff and business leaders expectations Shifts conversation to business capabilities and away from technologies Value Realization Potential Permissive Enterprise Posture Toward Business-Led IT Restrictive Low Technology Anarchy Technology Dictatorship Anything Goes Corporate IT Control Sub-scale solutions Duplication of effort Missed business opportunities Policy breaches Data silos Avoidable risks Narrow focus on IT risk misses broader competitive risks IT GOVERNANCE 20

10 Help the organization understand how much leeway business partners have in each category. CLARIFY IT RESPONSIBILITIES Level of Business-Led IT for Each Capability Segment In Shallow IT, business partners can take the lead with technology without help or input from IT. In Deep IT, IT staff should provide architectural and information risk expertise, while bringing integration and consistency to business-led IT. 1 2 SHALLOW IT (Business Partners Take the Lead) Capabilities of Record Core to business operations but not differentiating (e.g., general ledger) Capabilities of Insight (High Risk) Related to analysis and reporting (e.g., weekly sales reports) DEEP IT (IT Ownership) 3 Capabilities of Productivity Mediating how employees work (e.g., instant messaging) Scale 4 Capabilities of Insight (Low Risk) Related to analysis and reporting (e.g., web analytics) It s the business s job to identify the capabilities it needs. And it s IT s job to understand why and to provide the architectural expertise to help marketers get more from their investments. Ralph Loura Former CIO Clorox Company 5 Capabilities of Engagement Support of customer and employee engagement (e.g., direct mail management) Source: The Clorox Company; CEB analysis. Degree of Concern About Risk and Compliance IT GOVERNANCE 21

11 Thank You for Your Interest in CEB Research! If you re a member, please log into your account to access the full study. If you would like access to this full study, please contact CEB to learn more. Member Login Contact CEB 2014 CEB. All rights reserved. CIO SYN