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Creating Value Through IT Strategy in the Digital World

Identity/Strategy / 09 Dec 2016 / By Ed Novak, Mike Bowden

The Digital Age is upon us.  Do you have the skills and knowledge to succeed?

Changing world

The world is changing rapidly driven by business demands for innovation, agility, globalization, and productivity.  We are witnessing an unprecedented explosion of new business models and capabilities enabled by new technology – especially the growth of cost-effective cloud infrastructure platforms and software solutions, social media platforms, and huge repositories of data.  Just look at any industry, and you will find hundreds of start-ups developing both new industry solutions and disruptive new business models.  This has tremendous implications for IT.

IT strategy in the Digital Age

In the Digital Age, how we help drive tangible business value is changing.  It’s still very important to establish linkages between the business strategy, business operating model, and the technology strategy.  It’s also important to use collaborative processes to drive out the critical business changes and the ways IT can help in areas such as supply chain, finance, HR, operations and other key business processes. 

But Digital Business Leadership requires a far more expansive and customer-centric, outside-in look at the business – completely reengineering the business model, creating a seamless multi-channel route to market, adding technology to products and services, using analytics to gain insights, and even forming partnerships in your industry with potential industry disruptors.  Often these opportunities are more difficult to define with more risk but also much greater reward.  IT must play a leadership role. 

Key challenges

This is exciting for those in the technology business, but comes with the challenge of building much deeper relationships with partners in the business areas.  IT Relationship Managers must position themselves as influential business leaders -- able to draw direct connections between business strategy and value creation across both traditional and emerging digital business areas.  Digital Business Leaders must operate as a ‘Partner’ and ‘Peer’ of the business in bringing radically new value propositions forward as noted below.

Inside-out:  Provider/Promoter

Outside-in:  Partner/Peer

Internal focus

External focus

Technologists

Powerful, influential business leaders

Architecture

Strategy

Controller

Facilitator/Advisor

Service integration

Relationships

Unit cost of IT, service level

Increased revenue, reduced delivered cost

Total cost of ownership

Net Present Value


As the stakes and complexity grow, keeping the focus on creating real, tangible business value is perhaps the most important element of success.  As always, initiatives must help companies create shareholder value by increasing gross profit (increase revenues, decrease manufacturing costs), decreasing operating expense, and improving capital and asset utilization.  However, in the Digital Age, there are a myriad of new ways to achieve this value which will require new approaches – management education, greater experimentation, partnerships with customers, and new analytical techniques. 

Get smart tactics – are you ‘getting out’?

  1. Involve yourself in the ‘front of the firm’ by volunteering for business or IT projects that are trying to increase revenue or improve customer service.
  2. Understand how the business works and how the company makes money. 
  3. Read the annual report and industry analyst reports; listen to quarterly earnings calls. 
  4. Understand management processes – what, where and when decisions get made.
  5. Get out of the office, talk to customers and sales people, visit partners, and develop an external focus. 

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CATEGORIES

21st Century
Adaptive Execution
Assets/Capabilities
Identity/Strategy
Proactive, Haptic Sensing
Reimagining the Portfolio
Value Centric Leadership

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