People outside of the IT organization often protest that they wish their IT folks were more business savvy. Rarely does this dialogue provide any insight into the short coming of their IT staff and how their skills gap can be overcome. This week, we (the QRS EA Team) decided to explore this subject. Hope this will stimulate conversation.
In most non-IT companies, the IT Organization has two distinct but connected roles:
- Run the Business of IT: Just like Marketing, Finance, HR; the IT management is required to budget, plan their resources and deliver critical and non-critical services to all divisions of the organization. These services often include – email, access to internet, enterprise resource planning, batch processing, real-time integration between systems, systems maintenance and other IT operations. Furthermore, IT management is often asked to come up with new cost reductions without impacting the business. Most of the time, IT management performs this function very well.
- Help Exploit IT Capabilities: Help the line of business (LOB) exploit the information technology capabilities to improve the LOB’s performance – consequently performance of the Organization . The focus for IT is not cost reduction but increase revenue. In this role, IT is seen differently by different groups and IT sees itself differently as well. It is in this role “the Tech Speak” and “ the Business Speak ” chasm becomes the widest. For example, consider the following scenario: A FedEx customer wants to know when their package will arrive at the desired destination at certain price points. If FedEx accomplishes this task, the client will do business with FedEX again and again and again. If FedEx promises the above and is frequently unable to deliver the package with the agreed upon service level, the client will look for alternatives. Given this scenario – both IT and LOB management see the FedEx ability to meet client expectations differently. It is this different viewpoint of FedEx capability that causes the communication chasm and cause for frustration.
Going back to our scenario above, IT sees the FedEx capabilities as integrated set of web based, mobile computing and tightly integrated back office applications that are sitting on different platforms, with different end-of-life schedules, risks, available skills, ability to change and support etc. Conversely, the LOB Management sees this as both the client and delivery staff’s need to know the location of the package at all times. Should there be an exception alert, the right people who can take the necessary corrective action and measure their performance. This needs to be done 100% of time at known costs and constraints. Having seen this scenario played out so many times in different organizations and industries, we believe that both IT and Business needs to learn – “the Customer Speak” Know the salient characteristic what customer value and then define, develop and use the right capabilities to meet customer needs.
“Know the salient characteristics of what customer values”
Capability Based Planning is one proven approach that has been used to close the “Business Speak ” and “Tech Speak” chasm and enforce “Customer Speak ” in other industries; we believe it can be applied here as well. The key to successful transition to Capability Based Planning is:
- Management needs to clearly understand and communicate to all what customers value,
- Determine what people, process and technology capabilities will be required ,
- Evaluate whether the cost of these capabilities are consistent with what the client is prepared to pay.
- Does the organization currently have base capabilities to build and run the new capabilities or are these new capabilities are just pipe dreams?
- Knowing that people, process and technologies capabilities are developed and managed by different LOB’s in the organization, do you have oversight of who is able to orchestrate these silo capabilities to produce the valuable final product that customer cares?
In addition, management must also determine the following:
We believe that it is not IT who needs to learn business speak, it is both IT and Business who needs to learn the “Customer Speak” and then work together towards a single goal. One good starting point is to learn how to do Capability Based Planning or what we at QRS call – Capability Based Value Delivery.