This is my second consecutive blog post that discusses George Westerman's ideas. I heard himn speak at MIT Sloan on "Digital Leadership for Non-IT People." I'm also looking forward to George's talk at next month's KMA-sponsored event on "Communicating the Real Business Value of IT" at Microsoft in Waltham on April 26th.
The discussion focused on three areas that a line or senior manager should know about IT to provide digital leadership to their organization. They are:
- Digital platform--the manager needs to understand how well the organization's key transaction systems are integrated. If systems are poorly integrated, it's very difficult to innovate and grow. Adding a new service or product might require changes to multiple systems and making these changes might break other things. It's also difficult to get information that spans multiple systems if your systems are poorly integrated, making it harder to make strategic decisions. Unfortunately, integrating systems into a digital platform is costly both in budget and in management effort. As your organization grows, you'll need to revisit the structure of its digital platform. You might want to read some of Peter Weill and Jeanne Ross' work on Enterprise Architecture to get more background on digital platforms.
- Value-based investment--as you evaluate IT investments, consider their value to the business. Computing ROI is one way to measure this. Sometimes this is difficult because the benefits of the invesment are hard to quantify. As an alternative, Westerman suggested "Value Dials." Will the It invesment affect key drivers of profit such as, days inventory, headcount or turnover? Once you make the investment, it's critical that you do a post-implementation review to see if the business received the value.
- Provoke innovation--IT is constantly changing. There are always new ways that new technology can change the way your business is run or even the way you go to market. As a business manager, you need to be educated in these technology trends and you need to encourage your organization to innovate. How can social media tools support collaboration within your organization? How can they be used to strengthen relationships with your customers or partners? Can I achieve significant cost savings through cloud computing? Be an intelligent consumer of IT trends and be willing to support experimentation and take risks.
I hope the above thoughts will provoke some innovation in the way you view the IT function if you're a line manager and the way you view line functions if you're in IT. In either case, I hope to see you at George Westerman's talk on April 26th.
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