In I joined ITC after passing out of IIMAhmedabad in 1987. This was when PCs were still 386 machines with Lotus 123, and expensive to boot. I will always remember J Narayan, one of the most progressive directors at ITC, who in 1987 ordered that every ITC manager should have a PC at his desk. We have clearly come a long way since, into the era of Web 2.0 and cloud computing.
To borrow from football parlance does IT keep score or does it score goals? In todays IT-enabled world, the IT function scoring goals all the time. However, the questions around the right IT strategy and appropriate investments continue to be fundamental to most of the companies.
Given that most of you will be in the middle of the budget process, this may be a good time to talk about positioning and approach of IT spends in your oraganisation.
What I believe is central to the problem is a lack of alignment on what the IT strategy should be like. For most of us, understanding the business strategy and dovetailing IT strategy as a key enabler proves to be extremely critical, once we decide on a project. According to me there are two broad buckets of IT strategy those that impact the operating model and those that define business strategy.
The operating model is the relatively easier part, even though 90 per cent of organisations struggle to get it right. Its impact is seen through enhanced efficiencies and lower costs. For example: A simple payroll outsourcing process does away with internal payroll are changing every day. And hence, customer feedback forms have given way to data mining social networks on social platforms like Twitter and Facebook to understand what they want to say and do.
The role of IT in being the innovator within the organisation to help the business stay close to the consumer is a whole new ball game. In this space, the IT manager is not someone at HQ designing a system, but is required to work in the trenches, and be a part of the buzz, so that innovative solutions emerge. Getting closer to suppliers is another challenge where EDI is getting transformed.
The challenges of measuring the cost-benefits of IT can be quite different In the operating model, improvement and productivity-driven IT, the key to selling good IT budgets, is to have great metrics and less chunky investments. The more variable and milestone-driven, the better.In business strategy, where innovation is required, this is harder to measure. The role entails managing information (being the organisations Google) and managing interactions with the outside world (customers for instance). For a retail company, its about getting the consumer to spend more at its stores. Data mining customer spends to tailor-make offerings to customers is an example. These applications usually sit on top of the underlying transactional systems in enterprises and therefore are relatively less expensive. These innovations also help maximise revenues hence IT managers need to work with business managers to help quantify the additional revenues that these innovations bring in.
In a growing complex world, it is extremely imperative to recognise that your IT guy is a business partner, rather than just an employee. I am quite sure that with this mind-set, selling an IT budget to even the most hard-nosed CFO shouldnt be a problem!
It is the team that brings in best practices and lowers costs through an outsourcer. Cloud computing, with all its newness, is an example of making the operating model more efficient.
The business strategy part is the difficult one. Getting closer to the consumer what his changing needs are, the feedback, and the interactions.
The author is Chief Financial Officer , Spandana
Add new comment