In our first digital transformation post, we talked about the basics of digital transformation…what it means, how you prepare for it and the importance of a strong and secure infrastructure. If you missed that article, click here to read it.
In this post, we’ll talk about how the role of IT in business has changed over time and how your business approach can change along with it.
The IT Management Pyramid
The pyramid below describes the efficacy of your IT strategy as it improves and develops on the way to Digital Transformation. The goal is to move up the pyramid! The idea is to be continually thinking about how you use IT, the role of IT in business strategy, and where your IT is focused. Each tier of the pyramid is explained more fully below, along with the limitations and benefits of each stage as your business develops its IT strategy.
This is where we all started, waiting for a problem to occur and calling the IT person or team to fix it. In this stage, technology management is focused internally and is a part of day to day operations but provides no business advancement or strategic value. Thankfully, the majority of companies have moved past the Reactive ‘break-fix’ model. However, some organizations still handle their IT in this way, which is dangerous to the health of their business. Anyone still in this stage should be concerned about their data security, integrity, recoverability, as well as their ability to scale upward as their business develops. By the very nature of the reactive model, it’s simply not possible to look to the future.
System Reliability and IT Cost Effectiveness
In this second tier, IT is still mostly focused on its own internal function as opposed to the business, but operationally there is an effort to be proactive. Reaching this level is characterized by some system and network monitoring ability which allows IT to be alerted to problems and, hopefully, receive advance warning to avoid issues. Most companies see IT strategy as focused on these two segments of the pyramid and have done so for the past 20 years. The challenge with this way of thinking is that technology has evolved to be an integral part of business, and successful companies need to evolve to take advantage of these changes or they can be left behind. Reliability and effectiveness are just the baseline for business IT. Once this baseline is satisfied we must move onward and upward!
This is where organizations begin seeing IT in a tactical and strategic role. The focus of IT becomes less about individuals and more about the business. As we move into the Business Enablement tier, we can begin asking and addressing questions like, ‘is IT increasing the efficiency and productivity of my business?’ Affirmatively answering this question can take some time, and it won’t happen overnight. It requires a thorough look at the business, the various roles in the organization, the IT team’s capabilities, and how to utilize technology to drive the business forward. The IT department, whether internal or an outside partner, is an integral part of this conversation, but they cannot be the only one answering these questions. Management at all levels will need to be part of the conversation, and once those groups are communicating effectively, Business Enablement can begin in earnest.
Once we have gone through a close look at the business initiatives and systems to ensure technology is enabling the business to be better, then we are ready to take the last step…change the marketplace! The role of IT can have far-reaching strategic implications when we can turn the focus toward making changes in your industry and aim to deliver what customers are looking for in a unique and better way. Consider these examples: AirBnB is the largest accommodation company in the world, but owns no hotels; Uber is the largest taxi company in the world, but owns no vehicles. IT can, indeed, enable significant and substantial competitive advantages once we start thinking of it as a great enabler.
One step at a time
Don’t be afraid…the changes don’t need to be as massive as the things Airbnb and Uber have done. So many new technologies are available now …competitive differentiation can be as simple as collecting and using data in a way that has not previously been possible, leveraging artificial (AI) and business (BI) intelligence in new ways. A business may be able to connect its disparate data sources to drive better decision making and make faster, more accurate decisions that drive bottom line results; it could connect systems to the Internet to monitor, manage, or track new data points to improve outcomes. The bottom line is that there are many opportunities available to make huge improvements to business using IT and the leading companies are taking advantage of them.
Our next digital transformation blog post will focus on artificial and business intelligence: what they are, and how they can lead you into the future of IT!
If you would like to learn more about how to adapt your IT strategy to take advantage of Digital Transformation, please reach out to us using the form below.