Power of partnership between IT and Business teams.

One would expect that the pervasive Internet in the business world will make IT departments more critical than ever. IT Organizations would help deploy Internet not only as an equalizer, but also to provide competitive advantage in the marketplace. The Internet and Collaboration technology deployments today would provide the same boost to corporations that Enterprise Resource Planning (ERP) implementations did in late 90’s.

For an enterprise, Internet today enable collaboration amongst globally dispersed product R&D and development teams, automations in Supply Chain, new cost effective opportunities for Marketing, dialog between customers and Sales teams, shortening of sales cycle and enhanced quality of customer support to name a few.

While corporations have greatly benefited from these investments, the CIO influence at the corporate executive staff has waned in the last decade. An Information Week survey found that the percentage of CIOs reporting directly to CEOs dropped from 45% to 31%.

Functional organization executive still see technology as a key business enabler, but are increasingly circumventing the corporate IT organization. Some business functions set up shadow IT organizations. Emergence of SAS applications, cloud computing, lower cost of turnkey offshore development and pay per use model have allowed functional teams to hire outside vendors for services traditionally provided by IT, minimizing the need for large capital investment and reducing long lead time.

Executives look to the CIO as the advisor on new and fast evolving technology trends, and their impact to such areas as compliance, governance, data protection, privacy and security. Successful CIOs have seized the opportunity and re-defined the charter of IT organizations. The new organization design forces the technical staff out of their comfort zone. For some traditional IT teams that took direction from their business clients, this may be uncomfortable. But it is necessary for them to build the new skills for next decade to enhance the role of IT.

Many of the IT services are now commoditized, but several new areas have emerged for IT staff to offer their business users better technology value proposition. IT staff is outsourcing non-value add commoditized areas of IT operation. They are spending more time on peer networking with their business users and positioning themselves as strategic business partners. They are contributing to the business decision making, and jointly owning the responsibility and the consequences. In the overall strategy, they include SAS vendors, cost competitive offshore development teams and shadow IT organizations and use cost effective outside IT services and new technologies to their advantage by highlighting the case for cost savings and time to market.

Ability to partner well is the essential IT skill for the next decade

In late 90’s, one of the highly desired skills was SAP or Oracle implementations knowledge. That was then. The new hot skill that CIOs want to have on their staff is the ability to forge relationships. Today, influence of an IT leader is enhanced through their ability to accomplish results and not by the authority to add procedural roadblocks. An IT organizations’ credibility is enhanced by helping find the right solution to a business problem, and not by creating the fear of compliance.

Partnership does miracles where the traditional model of requirements -> develop->test -> release does not work. Traditional model has several limitations. First it assumes that the business clearly understands what their needs are. There is a long time lag between receiving requirements and delivering a solution. Even if the requirements were perfect (which we all know they never are) by the time the solution is deployed, the needs have changed. So the implemented solution turns out to be for the wrong problem. In the process, significant resources are wasted and opportunity cost incurred.

A more collaborative approach will work better in today’s world where the business and IT teams are collectively setting the strategic goals and measurable success criteria. IT teams are embracing a culture of innovation and swiftness to contribute to the success of their company. During program execution phase, they are applying their collective wisdom to make tradeoff between time- to-market and scope to include new information.

As a successful business partner, IT has learnt to operate in a world that is not completely data driven. They, collectively as a virtual team, share the risk of making decisions with imperfect information. Effective IT teams do not wait until the perfect information is obtained – they are willing to begin under ambiguity, but proceed with a learning mind, and optimize the solution as new information is assimilated. This is the true partnership, and is the key to achieving higher order goals.

Key impediments to achieving engagement

Many world economies, including US, faced two major recessions in the last decade. Most IT budgets got slashed. Many of the projects were shelved mid-way without delivering the expected benefits.

As a result, a perception was created that IT is slow to respond and deliver. IT organizations started being associated with too much IT-legalese, technology centric view of the world and pedantic approach to business problem solving. Then government got involved and IT ended up becoming the gatekeeper of corporate misconduct to respond to new laws such as SOX, HIPPA, PCI. This made some IT Organizations risk averse and cautious in their response to business problem solving.

Some IT organizations took refuse in the “process worship”. I do not mean the core business processes that streamline the functioning of a large company and bring predictability and reliability to the routine functions. I am referring to hundreds of other non-value add bureaucratic hurdles which came into existence in response to every mistake, howsoever minor, in the enterprise. These processes, in their final form, had no bearing to the business results it was intended to achieve. Often IT members even forgot why the process existed – they just practiced it. IT teams got burdened by these complex processes at the cost of creativity and agility. Processes segregated IT from functional teams and hindered agility, partnership and nimbleness. IT organizations restricted their engagements only to comfortable IT issue with focus on solving trivial business problems.

Foster a culture of forging partnership

Great partnership with the business is the new critical success factor for IT organizations. IT management team would make concerted effort to enforce the importance of developing collaborative partnerships with the key members of the functional areas they support. IT Management would also reward individuals who demonstrate such characteristics.

So what are the key qualities needed to create a culture of collaboration and partnership?

First, trust and transparency are the fundamental building block for the partnership. The IT and the business teams should be able to communicate honestly and be comfortable sharing bad news as easily as good news. The teams do not have to agree on everything, but they should do so for the key important areas and be willing to “disagree and commit” to others.

Second, shared vision and alignment of goals are essential. Teams that fail to establish this early in the process run into conflicts later in the process. A test of alignment will be that the IT and the business teams will come up with the same answer if asked to rank a list of business priorities.

Third, IT and business team should have respect for each other’s insights, ideas and opinions. Every team member on the team should feel that his contribution is valued and know that she will be heard. They would know their role in a meeting and expected outcome.

Fourth, the teams must have joint ownership. Whole is more than sum of its parts. A team shines due to collaboration of its individual parts. As much as possible, the end state solution should be optimized for the company as a whole and not for an individual department. Management should reward the combined project teams for their success instead of rewarding only one team. While to the outside world it is one team, members within the team should set clear roles and responsibilities.

Fifth, team should be open-minded and flexible to make necessary adjustment as external factors require change in direction or priorities. True IT leaders would spend more time with business partner then their internal teams to see the issue from various perspectives and often provide insights into areas that may have nothing to do with IT. Effective IT staff is open to and understanding of the macro level perspective on the business problem at hand. They would not hesitate to reach out and set up a meeting with a customer even if they do not enjoy doing it.

Sixth, credibility and consistency are essential qualities. Success breeds success. No follow up or reminders would be necessary, and any slippage in the prior commitments will be communicated as soon as it is known. Instead of shielding behind their roles and responsibilities, or blaming each other when things go wrong, the teams are able to craft a combined corrective response. Any gap that resulted in sub-standard performance would be reviewed by the team jointly, responsibilities owned up and appropriate course correction initiated to minimize the impact to the larger enterprise goals.

Conclusion

The next decade will open tremendous opportunities for IT organizations to enable enterprise success. In the last two decade, IT impacted the bottom line through cost savings. For the next decade, IT will be positioned to impact the top line through their participation in new areas such as customer engagement, sales enablement, web and social media marketing and collaborative sales. To be well positioned to ride the success, IT teams will require several new skills - partnership will be the high up on the top of the list.