CIOs strive to communicate IT’s Business Value to their Business peers, but they still misunderstand what communication is important in the IT-Business Relationships.

Most measure and communicate operational excellence, not business value.

Some drive business value themselves but don’t hold direct reports accountable and fail to connect directly about IT’s business value with their business peers.

Leading IT execs make business value communications integral to IT. And the CIOs self-identify as the leaders in this communication process:

IT-Business Communication Process

1.- Personally position IT’s value.

These CIO’s act as a linchpin for IT’s overall value communications effort, leading by example and making IT marketing an explicit, targeted effort.

2.- Link IT’s internal activities to business value.

Beginning with IT metrics that fit within business-recognized frameworks, these CIOs drive business value as the basis of IT activities, like representing transformation projects in terms of competitive advantage and tying shared services to irrefutable numbers.

3.- Add business value to IT’s work with other organizations.

Business value becomes a primary focus for these IT organizations’ interactions with internal customers and external suppliers.

This includes actions like embedding IT staff in business teams, enabling business governance of IT spendings, and strengthening value from business partners.

Leading CIO Comm Map

Business Value Communications Help IT to Mature Demand Management Capabilities.

Demand management becomes the model for IT-Business relationship management.

IT marketing takes on the role of coordinating and targeting IT communications.

As technology becomes pervasive, IT governance matures and drives IT-based investments founded on business terms.

Not all IT organizations can approach IT’s business value communication the same way.

a.- More mature IT shops concentrate on driving growth in terms of total value delivered.

These CIOs should embed business focused IT roles in business organizations to help make this happen — roles like relationship managers, business analysts, and program managers.

These CIOs should take a leadership role in the definition of strategic business efforts, through personal influence and by example.

To do this, they should structure the IT-business conversation based on business capabilities, linking business architecture to technology efforts through business capability maps.

b.- Less mature IT shops focus on the basics, putting value into core IT processes.

CIOs in these firms are in the early stages of establishing the basic IT processes that enable effective

value communication, IT demand management, IT marketing, IT finance and IT governance.

These CIOs should drive IT strategy based on the business strategy — not IT’s road map — creating transparency through portfolio management.

In these organizations, CIOs should focus investment prioritization and governance on business results, not projects, and should add business results to IT’s performance management scorecard.

And, as this value focus takes root, these CIOs should market IT’s results.

THE BT CEO MUST PUT THE MONEY AND AUTHORITY IN THE RIGHT PLACE.

To synchronize any technology activities with business demand, just follow the money. Whoever has the ability to spend it will decide how much goes towards enabling the business with technology.

So the CEO, who has the broadest responsibility for deciding where the money goes, is the key to BT Synchronization. In order to make BT Synchronization work, CEOs must grasp that:

1.- If a critical process needs fixing, it must be funded at the top.

Just as an organizational matrix makes sense for BT Synchronization, CEOs may need to explicitly remove funds from business units to invest in enterprise-wide processes like data standards, billing, logistics, or product development. Firms cannot both empower the business units to make all of their own funding decisions and at the same time expect a technology management organization to fix cross-unit problems, like customers getting invoices from six divisions when they only want one.

2.- Spending more on technology may be required to spend less.

Thanks God, some CEOs know that IT spending should not shrink every year. Perhaps this is the year to gain competitive parity, fix broken processes, or lay groundwork for future mergers, driving IT spend up as a percentage of revenue.

Whoever runs a BT organization must be invited to recommend business change. CEOs should expect more of their technology executive. They need a chief business technologist who loves the role of change agent.

This person should not only fix poor-performing IT or recommend fixes to dysfunctional processes today, but he/she should also be the advocate for continuous improvement of all aspects of business. Even in slower-moving industries and government agencies, failing to change how technology is used means losing ground to those who do.

THE BOARDS OF DIRECTORS WILL CARE ABOUT BT SYNCHRONIZATION.

Even though too often today they let IT slip off their agenda, warning! As technology becomes even more pervasive and critical, boards of directors will:

1.- Ignore technology at the peril of shareholder wrath.

A business disaster may have serious IT issues at its core.

2.- Underestimate scale based on personal technology experience.

A Blackberry, PC, and home network are not tiny versions of enterprise-class systems. Board members must acknowledge and respect that a mission-critical system must have the same degree of robustness, integration, security, and thorough testing as a well-engineered building or airplane.

3.- Expect transformations to fit neatly within quarterly fiscal boundaries.

In the world of BT, board members will be mindful of business history and permit their expectations of miracles to be tempered by timeframe realism. Although experiments and small improvements from technology may see daylight in a few weeks or months, history proves that great logistics or supply chain systems did not deliver full benefits within a single quarter.

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One Response to IT MUST ADOPT VALUE-BASED COMMUNICATION

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