IT Must Understand Business PrioritiesBy Scott Archibald | Posted 2010-10-15 Email Print
Businesses are focusing on two key priorities: Cutting costs and growing revenue. Are you with the program?
It’s been said that the only certainty in life is change, and that statement has never been truer than it is today. The global recession has changed the way companies think about business. In fact, this recession had a 400 percent greater impact on our economy in terms of the gross domestic product than the Great Depression of the 1930s did.
Businesses globally are focusing on two priorities at the moment: Cutting costs and growing revenue.
Executives are looking to mitigate risk by converting as many fixed costs as possible to variable costs. Fixed costs can include facilities, employees and IT infrastructure. We can see this trend on the hiring front, with unemployment numbers remaining at around 9.7 percent. Companies are not hiring employees en masse, and many are turning to consultants and contractors to fill their needs.
From a growth perspective, many businesses are simply trying to get back to pre-2008 revenue levels. Emerging markets represent a huge growth opportunity for many companies, and continue to be an untapped resource for others.
So what does this business reality have to do with IT? In truth, everything. It’s crucial for IT departments to understand the larger business challenges that their leaders are facing and to emerge as a strategic partner rather than a cost center or support function.
Smart IT executives will spend time with business leaders and decision-makers to develop projects and initiatives that help the company achieve the aforementioned priorities. This will accomplish three important objectives:
• Develop relationships: Engage in face time with the business people who hold the purse strings to foster dialogues about projects and initiatives. And encourage your management staff to form relationships with their counterparts in the business.
• Learn the business: For IT personnel to take on a truly strategic role within an organization, they need to understand business goals and objectives, comprehend the challenges the company is facing, and identify the role IT can play in resolving business problems.
IT shops engaged with the business are constantly assessing technologies and solutions that will ultimately help the company achieve its objectives. For example, if your company is moving into an emerging market in South America, you should at least consider outsourcing some IT services in the local market to bring critical infrastructure into play more quickly.
• Think Strategically: Internalizing the business goals and objectives of an enterprise will cause a shift in mindset for IT shops that are not currently engaged with the business.
To run a successful business, it’s critical to think like a successful business. One of the first questions that most IT executives should ask is: Can I change from being a cost center to being a profit center? Short of that, any IT initiative should be considered in light of how it helps the business grow and achieve its goals.
Taking a strategic, business approach moves IT from being a support function to being a critical voice at the C-suite table.
Learn to Communicate
As simple as that may sound, most individuals—whether in IT or not—don’t understand the value of communication in business. In many instances, those who succeed do so because they know how to speak to their audience in a language the audience understands. In other words, a conversation with a business executive in very technical terms and IT jargon will likely cause that person to tune out.
A logical extension of learning the business is to communicate in business terms. By learning the enterprise’s objectives and challenges, it makes it easier for IT executives to communicate possibilities and opportunities in terms the business can understand. In other words, “Speak the local language.” Understanding the big business picture will lead to more strategic thinking.
However, talk is cheap, so it’s imperative to show results. Be able to demonstrate tangible results from three-to-six-month projects—or phases of larger projects—that illustrate how IT is helping move the business needle in the right direction.
Additionally, from a communications point of view, it might be worth considering a branding program for the internal IT department. Creating a brand—even something as simple as a logo or a motto—can create a sense of identity and camaraderie that has a beneficial impact.
From a business perspective, executives are used to talking about branding, messages and marketplace perception. A strong brand stands for something that touches us and helps us quickly form an opinion or perspective. Creating a brand for the IT department can help accomplish two goals: create a sense of internal pride, identity and camaraderie; and communicate value in simple, effective ways to the executives in terms they understand.
Exposure to different parts of the organization creates a holistic view of the challenges and opportunities it faces. Look for opportunities to spend time in other departments; if your organization has a cross-training program, take advantage of it. Even if it’s simply sitting in on sales, finance or other department meetings from time to time, do it.
Cross-training creates the opportunity to hear the objections customers have to buying product x, y or z, or the financial challenges involved with implementing product a, b or c. Whatever the case, it provides broader and deeper insight into the organization and positions IT in a more strategic role that helps the technology group address and solve the problems different departments might be facing. I’d also encourage those other groups to attend some internal IT meetings.
Of course, you need to be realistic. Not every department will want you to attend meetings, and not every person in IT will have the ability to attend meetings for a variety of reasons. But if you don’t ask, you don’t know, and sometimes knowing is half the battle. In the long run, it creates potential for IT personnel to move into other parts of the business and begin to play that strategic role.
Keep in mind that companies have multiple options available to them in terms of temporary workforce and outsourcing options, so it’s critical to prove value to the business by thinking strategically and showing innovation and creativity to accomplish the organization’s goals and objectives.
The need for IT to understand business is not just “nice to have”; it’s a necessity. Therefore, IT should play a strategic role in accomplishing business goals and objectives by engaging in conversation, learning the challenges and opportunities, and thinking beyond being simply a support function.
Scott Archibald is a managing director at Bender Consulting, a management consulting firm based in San Francisco.