Ending banishment to build a more responsive and strategic IT organization.
Dimensions of Isolation
In the Gartner blog post on IT strategy, Dr. Mark P. McDonald highlights 10 telltale signs that IT has become isolated in the eyes of the business, and is at risk of becoming irrelevant and commoditized:
- Isolation by Irrelevance / IT strategy is not aligned to the business context and what the business must do to succeed.
- Isolation by the Ordinary / Goals and outcomes are vague, or simply seek to do the current job of IT better.
- Isolated by Monetization / IT strategy is presented only in financial terms thus risking commoditization.
- Isolated by a Lack of Prioritization / If everything is important, then nothing is important.
- Isolation by Time / Last year’s initiatives mysteriously disappear from the strategy, and this year’s initiatives are set to launch many months later with no clear relationship to the business calendar.
- Isolation by Generalization / IT strategy is so vague it could apply to any organization in any industry.
- Isolation by Repetition / Goals are the same year over year with only minor differences.
- Isolation by Ability / Investment is not being made to grow talent capabilities needed to meet market demands, and address new technologies.
- Isolation by Organization / Governance processes focused on engaging the business only help to magnify the current separation.
- Isolation by Stability / The rate of change in IT is slower than the rate of change in other parts of the business.
McDonald (2011) points out that simply delivering on service quality, or doing your job and only your job, is a hinderance to IT capability, adaptability and perception as a technology solutions provider of choice.
Consumers and business partners alike now have access to choices as well as comparative information to judge whether what IT offers is valuable, and where they can go to access alternatives if this is not the case.
Below we discuss solutions to address three of these warning signs:
- Isolation by irrelevance;
- Isolation by prioritization, and;
- Isolation by repetition.
Isolation by Irrelevance
This scenario of irrelevance speaks to poor business alignment where IT efforts are not aligned to important aspects of the business, such as new product launches, or trends in the wider market, like the rise in mobile web usage. As Bhatt et. al. (2010) explains, IT in itself does not confer direct competitive advantage to the firm. However, the level of IT flexibility can impact the firm’s ability to respond to opportunities, changing market conditions and resource allocation demands.
One such business driver is the growing mobile and sensor network of devices which is impacting many domains including analytics, consumer engagement and mobile commerce. In an article from Forbes (2012), they note that over 15 billion things are connected on the Web, and these generate more than 50 billion intermittent connections. By 2020, there will be over 30 billion connected things, with over 200 billion intermittent connections (Forbes, 2012). This heralds a shift away from a client-server model to a model where devices, like sensors and RFIDs, behave autonomously and are becoming “a world of intercommunicating devices serving as the new web” (Hoffman, 2012). The existence of a direct user endpoint is no longer required, or necessarily a given (Hoffman, 2012). If IT has not accounted for fundamental paradigm shifts such as these, they risk working on technologies that optimize, or maintain, old standards that are
already becoming outdated.
Additionally, the billions of devices online will contribute to the big data trend. Combining sales information from POS systems with RFID in warehouses, and sensors measuring traffic in-store can provide retailers and suppliers with realtime information of customer behavior that drives agile decisions about product offerings, pricing and customizations with
high revenue potential.
Big data requires IT organizations to focus their efforts on becoming effective at IT delivery as well as being highly aligned to avoid an alignment trap of increasing complexity, and diminishing returns on IT investment (Shpilberg, 2007). In the interest of being responsive, IT leaders must stay aware of market solutions that can address challenges business leaders
care about including social media analytics, customer relationship management and rapid responsive design. Since changes in market trends can move quickly, keeping IT strategy relevant means making tradeoffs
between speed, accuracy and quality to ensure technology is an enabler for quality decision making and strategy execution (Davenport et. al., 2011). Business leaders have access to a wealth of information that allows them to determine what is possible, how much it should cost and how to get around IT if IT lacks the capabilities, desire or processes to deliver for the business.
Isolation by Prioritization
Failure to deliver business alignment from technology is often a symptom
of inadequate processes for planning what assets should be developed;
implementing that plan against good best practices; evaluating effectiveness of planning and implementation efforts; and, institutionalizing the payoffs (Kholi et. al., 2004). If everything is important,
then nothing is important. Kholi et. al. (2004) recommend a framework that can drive better alignment and prioritization by implementing governance activities across four phases: alignment, involvement, analysis and communication (AIAC).
A phased and deliberate approach, like AIAC, is essential for the long-term success of technology delivery for the organization. Project selection, analysis, prioritization, good business communication and business-IT alignment revenues are instrumental in driving valuable conversations about the percent of project spend as a factor of revenue generation.
Governance and prioritization can further help to align IT metrics as a whole to business drivers, strategies and KPIs (Mitra et. al., 2011).
Isolation by Repetition
Applegate (2009) defines the business model as “how an organization interacts with its environment, to define a unique strategy, attract the resources and build the capabilities, required to execute the strategy, and create value for all stakeholders.” Likewise, Drucker (2005) speaks about the importance of accurately defining the theory of the business, which are “the assumptions on which the organization has been built and is
being run” including markets, customers, competitors, technology, dynamics, strengths and weaknesses.
However, if the IT strategy changes little from year to year, IT risks becoming a seondary player as their business peers evolve to pursue a changing theory of the business. How an organization defines its business theory will drive other key decisions. Business leaders will develop
new goals and performance indicators, and IT should align to these new goals in order to deliver higher efficiency for the business.
The theory of the business, in tandem with the vision, colors how a firm interprets and responds to market trends. IT leaders should be monitoring trends in the consumer products landscape for all device types, from game consoles to feature phones. Are there potential partnerships they can leverage with device manufacturers? What peripheral consequences could arise from a new tablet or mobile device that is multimedia focused (Ofek et. al., 2010), or targeted towards a highly engaged mobile demographic (Brenner, 2013)? How could the leapfrogging trend for technology adoption in emerging markets and younger audiences impact content consumption,
server load, analytics demands, network security and new systems implementations required to manage growth?
Competition, customers and choice demand the ability to change and too often IT organizations — the generators of business change — are the slowest ones to change.
Dr. Mark P. McDonald
As trends accelerate, business leaders find that development times for products and campaigns shorten, and content must be more personalized to get consumers’ attention. Managing shorter windows or even simultaneous product releases means IT leaders must increase their capabilities in agile project management, responsive design and process governance to enhance their reputation as an enabler of strategic advantage.
Looking Forward
With the growth of smartphone ownership and mobile device usage, data networks must rapidly evolve to meet the growing information needs of a highly connected world. By 2015, Gartner (2013) predicts that over 80 percent of mobile devices sold in mature markets, like the United States,
will be smartphones, and that 50 percent of laptop shipments will be media tablets. In-house IT departments will no longer be able to comfortably pursue the same operating system tech stack, or simply look for ways to delivery SLAs in less time.
IT leaders will be challenged in this new digital landscape to ensure that technology is supporting a theory of the business that aligns with market forces as the ways in which revenue is captured, and content is consumed, continue to evolve (Drucker, 2005). By focusing on alignment, governance, capabilities enablement, real-time analytics and flexible infrastructure,
CIOs can enable the firm to be more nimble and responsive, while also fostering a technology culture of innovation.
Process, governance and workforce capability maturity can increase a firm’s ability to seize opportunities in a measured way, and position IT as a strategic partner. Speaking the language of business through well aligned IT metrics, strong communication skills and less technical jargon drives better collaboration, understanding and risk-reward decision making for business and technical leaders.
Article References
Applegate, L. M., Austin, R., & Soule, D. (2009). Corporate Information Strategy and Management: Text and Cases.
Becerra-Fernandez, I., & Sabherwal, R. (2010). Knowledge Management: Systems & Processes. Armonk: M. E. Sharpe.
Bhatt, G., Emdad, A., Roberts, N., & Grover, V. (2010). Building and leveraging information in dynamic environments: The role of IT infrastructure flexibility as enabler of organizational responsiveness and
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Brenner, J. (2013). Pew Internet: Mobile. Pew Internet & American Life Project. Retrieved from http://pewinternet.org/Commentary/2012/February/Pew-
Internet-Mobile.aspx
Davenport, T. H., & Snabe, J. H. (2011). How fast and flexible do you want your information, really? MIT Sloan Management Review, 52(3), 57-62.
Drucker, P. with Maciariello, J. (2005). Management, Revised Edition. Collins, Part II – Chapter 8 (The Theory of the Business).
Forbes. (2012). Gartner: Top 10 Strategic Technology Trends For 2013. Retrieved from http://www.forbes. com/sites/ericsavitz/2012/10/23/gartner-top-10-strategic-technology-trends-for-2013/
Gartner. (2012). Gartner Identifies the Top 10 Strategic Technology Trends for 2013. Retrieved from http://www.gartner.com/newsroom/id/2209615
Hoffman, J. (2013). Building for the Internet of things (and the demise of the client-server model). Retrieved from http://venturebeat.com/2013/01/31/
building-for-the-internet-of-things-and-the-demiseof-the-client-server-model/#iaUKcqVaertx95FH.99
Kholi, R., & Devaraj, S. (2004). Realizing the business value of information technology: An organizational process. MIS Quarterly Executive, 3(1), 53-68.
McDonald, M. P. (2013). Is IT isolated in your organization? Here are ten telltale signs in your IT strategy. Retrieved from http://blogs.gartner.com/
mark_mcdonald/2013/01/25/is-it-isolated-in-yourorganization-here-are-ten-telltale-signs-in-your-itstrategy/
McDonald, M. P. (2011). In the near future, doing your job may just be the way to lose your job, particularly for IT. Retrieved from http://blogs.gartner.com/mark_mcdonald/2011/05/25/in-thenear-future-doing-your-job-may-just-be-the-way-tolose-your-job-particularly-for-it/
Mitra, S., Sambamurthy, V., & Westerman, G. (2011). Measuring IT performance and communicating value. MIS Quarterly Executive, 10(1), 47-59. Ofek, E., & Wathieu, L. (2010). Are you ignoring rends that could shake up your business? Harvard Business Review: July-August 2010, 125-131.
Rettig,C. (2007). The trouble with enterprise software. MIT Sloan Management Review: 49(1), 20-27.
Shpilberg et. al. (2007). Avoiding the alignment trap in information technology. MIT Sloan Management Review.
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