As the economy slowly steers out of a recession, it’s prime time for CIOs to get prepared to handle an almost certain increase in demand for IT products and services. Most IT departments aren’t near ready to accelerate plans efficiently—for a slew of reasons, many of which tie directly into day-to-day operating processes.
To respond to market demands on cue, CIOs first need to transform relationships within the enterprise. While it isn’t easy—as it requires planning and specific strategies—the payoffs can be substantial. In this article, I’ll examine the obstacles that enterprises face in their efforts to become reactive and responsive, and I'll explain how one company boosted its agility.
Obstacles to agility
In order to respond to the market demands, today’s IT unit has to be agile; it can’t be mired down by antiquated processes and procedures. To become agile, enterprises must streamline processes, plug in efficient methodologies, and basically get a grip on all relationships inside, and outside, of the enterprise. According to organizational experts, CIOs must overcome several obstacles to forge ahead when the economy makes a turn for the better. The following IT unit characteristics prevent agility:
- A monolithic IT organization that’s separate from, and often at odds with, in-house business leaders over IT direction and focus
- An IT organization that has a poor handle on ongoing projects and how they relate to business needs
- An inability to effectively prioritize new projects
- Poor organization of current staff competencies and skill gaps
- A lack of established scenarios with other departments for how the IT unit responds to technology needs
Although it may be relatively easy to recognize such dysfunctional traits, changing processes and erecting new pathways of communication and efficiency to correct these problems within the IT unit are often challenging.
A big part of the problem, says Steven Brown, Senior VP and CIO at Carlson Companies Inc., is that many IT departments are insulated from internal corporate business units. This disconnect prevents IT units from realizing the efficiencies of adapting existing technology for new business needs.
“I have gone out in my community and I have checked,” says Brown. “They keep piling more and more tech on top of the legacy environment.”
Organizations such as Minneapolis-based Carlson, which has implemented a series of processes and procedures to foster such communication throughout the enterprise, are primed to adapt to an economic upswing. Yet, as Brown points out, it wasn’t a simple accomplishment.
Reconstruct the IT organization
If your IT organization is not yet integrated with internal business groups, it’s time to shake things up on a broad scale, says Forrester Research senior analyst Tom Pohlmann, an expert in organizational strategy and effectiveness.
Pohlmann suggests a modest first step. Prepare for decentralization by beginning to allocate small groups of IT staff to particular business strategies. If your company needs to set up standards to control system architecture, for instance, you might select particular members of your IT team to participate in an architecture group that would be in charge of meeting that business need.
The ultimate goal, say experts, is to make IT more strategic. One way to accomplish this is to assign staff along several areas:
- An architecture group to identify and police best practices
- A procurement group to evaluate incoming technologies and vendors
- A legacy system management group
- An IT operations group to keep networks up and security tight
- A new technology development group to compete with outside vendors and service providers for internal business
At Carlson Companies, the Technology Development Group is fairly decentralized, explains Brown. There’s also a Shared Services Group that can serve as a resource to any division wanting to share or adapt technology that has already been developed, he explains.
Additionally, each business unit has its own CIO. In some cases, the CIOs have specific technology that fits within their particular business vertical—such as marketing, hospitality, or travel. The staff assignment approach helps IT better grasp and respond to the business needs of the business unit it is assigned to, says the CIO.
To ensure that internal resources remain economically competitive with outside vendors, Brown maintains a catalog of 90 services that the Shared Services Group provides. These are benchmarked against the costs and SLAs of 30 external consulting companies who have the ability to provide similar IT services.
“I can tell where I stack up for every service, SLA, and every cost,” says Brown. “If I can’t compete, we will source [the project].”
Align your projects with business objectives
Along with restructuring the IT organization and making it competitive with external providers, companies need to align projects with business strategies. Unfortunately, not many organizations are using this approach, says Pohlmann.
For example, a staggering 42 percent of projects at one large healthcare provider are not sponsored by a single business unit, explains Pohlmann.
“The question should have been 'Why are we doing them?'” says the analyst, adding that many IT departments undertake maverick development that has little to do with supporting real business priorities.
On the other hand, “some firms go too far in doing justification and signoff to get things approved,” he adds. In this scenario, enterprises lose many opportunities as initiatives get mired in bureaucracy.
One way to avoid a lengthy approval process is to never establish one at the start. At Carlson Companies, the Shared Services Group often sees requests for projects that can benefit from the group’s ability to take technologies intended for one business use and retool them for another. This is often the first and last stop for many new project initiatives.
“If [the business unit] needs something different, then a case gets presented to the top executives in the company, including the CEO,” says Brown.
Project tracking is vital
Once projects are in the pipeline, Carlson Companies keeps a process docket to measure what’s been promised, to whom, and how the project is progressing. The IT staff conducts quarterly and annual project reviews to reveal current project budgets, delivery dates, and status.
Not all companies have a steady read on how projects progress, notes Pohlmann. One reason is economics—last year’s layoffs caused many IT departments to understaff existing projects, and rather than being cancelled, these projects remain on life support. While these projects aren’t really living at full capacity, they’re not really dead. A big decision that often needs to be made is whether to pull the plug, says Pohlmann.
Get ready for spikes in demand
Being prepared for a technology spike means working ahead. Running predictive scenarios, which can be as simple as brainstorming with other corporate executives, can be valuable. The scenarios should focus on the "what ifs" and establish an appropriate response and related business objective.
Carlson Companies has found predictive scenarios very useful. The company researches technologies and trends and maps these to strategic objectives. “We’re constantly six months out,” says Brown.
Combine evaluations to save time
Along with anticipating potential IT and business scenarios, CIOs need to inventory the capabilities and strengths of the IT staff. With more than 190,000 employees in 140 countries, Carlson Companies realized it needed to develop a way of tracking employee skill level in a specific tech area.
Extensive job data, including job titles, full-blown benchmarked job descriptions, critical skill sets, and costing data exist for every position at Carlson Companies. In conducting staff performance reviews, supervisors compare employee performance and knowledge to the requirements of the position. This way, at any given time, Brown knows what expertise is available for projects. This mechanism helps him avoid putting the wrong staffer on a project—something many IT leaders unwittingly do when they’re trying to respond to sudden project demands.
Start learning from your peers
For CIOs that don’t have all or any of the recommended systems and strategies in place, revamping the IT organization to make it more responsive is a daunting task, admits Brown. But as with every great effort, it all starts with just taking small steps in the right direction.
The best way to remake IT is to start learning how others are handling the same challenges, says Brown. “Get involved in your community of interest,” he advises, “because you’ll learn something.”