Information Technology (IT) Redesign
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Disruptive change has put a tremendous strain on organizations and their IT departments. The capabilities of the IT talent is declining due to inadequate technical education and aging workforce. Legacy systems and diverse IT applications are frequent across most organizations. Mergers and Acquisitions have become a norm, pushing vendors to form alliances. Mobile devices, tablets, and social media have been quite common across employees of almost all organizations. Cloud Computing and software-as-a-service (SAAS) have further complicated IT strategies, facilitation of Information Security, and keeping costs under control.
Systems to capture real-time data and using it to make informed decisions and provide personalized responses to customers (predictive analysis) will become a necessity in future. Organizations that will not equip themselves with these systems quickly will simply end up outsourcing to companies able to provide such services inexpensively and efficiently.
Due to these factors, leadership of the IT units is under immense pressure to revamp their IT function, to deliver advanced functionalities, stay abreast of Innovation, curtail costs, provide superior customer experiences, and gain distinct Competitive Advantage.
IT Redesign does not work merely by following generic recommendations of pundits from leading IT companies. It necessitates following a systematic process of clearly directing the unit’s focus on the value propositions of the company. To accomplish this, IT leadership needs to first analyze their existing service or product offerings and evaluate the value they generate.
The IT function of an organization can generate value in 6 ways—the key Value Drivers—by using efficient deployment of technology. These Value Drivers assist the technology leadership in their role to facilitate in providing capabilities the business needs most:
A dedicated commitment to the delivery of these 6 value drivers enhances the impact of the IT unit tremendously. Let’s discuss these value drivers in a bit detail.
Managing IT related costs is the foremost driver of value for the IT function. This value driver demands commitment from the leadership to:
- Keep IT related costs lower than those of rivals.
- Reliably enhance the cost indicators.
- Finance initiatives to build distinctive capabilities.
- Curtail spending in activities not adding value for the enterprise.
For example, a renowned retail supermarket has in place a sole straightforward yet reliable IT system to track and manage all functions. The system monitors all expenditures and allows investing only in initiatives that positively impact its critical capabilities (e.g. superior customer service).
This driver of value for the IT function warrants maintaining high standards of quality of service / products. The driver warrants commitment from the leaders to:
- Consistently achieve or exceed the agreed upon—or standard—service or product quality levels.
- Conform to security, confidentiality, and regulatory standards, risk management protocols, and operational guidelines.
For instance, a large global industrial corporation employs customized Robotics and Supply Chain Management applications to develop and manage outstanding Operational Excellence capabilities of their people.
This value driver demands consistently high levels of engagement across the different departments of the company. The driver warrants commitment from the leaders to:
- Maintain efficient service delivery, candid communication, and high-degree of engagement with internal stakeholders.
- Collaborate and partner with all other units of the organization to prepare realistic estimates and interpret changing internal demand patterns.
- Stay informed of the organizational-level requirements, objectives, and priorities.
For example, in order for financial institutions to serve their consumers better and thrive in this age, it is imperative to transform their Strategy and operations. This entails enabling rigorous cooperation and harmony between the business and IT departments to ensure that the back office operations fully facilitate front office functions.
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About Mark BridgesMark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.
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