From the perspective of the COO and the CFO, IT is the group that enables organizations to understand and leverage technology – whether it’s newer technology or legacy technology, it doesn’t matter. Both newer and legacy technologies are important and have their place inside organizations – and it falls to the IT group to evaluate and provide support for these technologies. However, I think the value proposition for the IT group often breaks down when they become focused on the technology that they like. A truly talented CIO or technical executive is someone who can separate his or her bias for one particular technology, to focus instead on whatever technology brings real change to the organization: true transformation.
I’m going to detail the “two A’s” – analytics and automation – and demonstrate how they represent the best way forward for any IT executive and IT team that wants to add value and become a driver, rather than a passenger, in the success of the business. I’ll get to the two A’s shortly, but first, let’s cover the key outcomes produced by them.
Ultimately, it’s all about competitive advantage and the customer experience. If you’ve got an IT group that is truly adding value, then I think their value is reflected in their ability to introduce technology that improves the company’s competitive advantage or enhances the customer experience: and maybe it is both at the same time. If you can improve your customer experience, you almost always improve your competitive position in the market. Just look at Amazon: There is no better example.
Beyond that is the “context” of traditional back-office support, which is important to business operations, but does not help the business become competitively distinct.
Taking a COO/CFO Point of View
For nearly four decades, I have served in financial, operational or other leadership functions with companies in several different industries, including manufacturing, energy, engineering, consulting, telecommunications and entertainment – including senior positions with the storied Samuel Goldwyn Company and Sony Music. What I have learned in these many roles is that the COO and the CFO are in particularly good positions to assess the way that technology can impact the organizations they help run.
How the IT Organization Can Deliver Clear Value
This background, and the fact that I now hold both the COO and CFO roles inside a technology provider organization has offered me a unique perspective to assess and determine how the IT organization can and should deliver clear value.
Again, the truly valuable IT organization is one that can focus on the “two A’s” of analytics and automation. A great deal of data exists in every organization – market data, competitor data, personnel-related data, transaction information, sales data, financial data, enterprise resource planning (ERP) data, and operational intelligence. The IT organization that can use this data to create stories for the management team to leverage and improve the business is one that “changes the game” for their organizations. They are the IT team driving change, being proactive and not simply reacting to requests from the business units: a truly valuable component of the organization.
Now, let’s look at both analytics and automation. As an example of analytics, MTM Technologies is a 32-year-old company that has served thousands of customers. We’ve sold millions of devices and equipment and provided complimentary services over that period. While history may not repeat itself, it does tend to “show-up again” looking quite similar. Our history represents a treasure-trove of data to guide where the business is going based on trajectories and past experiences. For many companies, as with MTM, there is an opportunity to build analytical engines that leverage all their data to improve projections and drive the business in new directions, pivot to new products and solutions, and to transform its operations: to fundamentally re-invent itself.
The automation part sort of speaks for itself, but I think it can be a tougher journey than most executives think. While many understand the fundamental benefits, they often oversimplify the effort. Most automation is IT design, development, and implementation. That’s hard, and the path is littered with significant challenges. People tend to oversimplify automation because they believe all the advances in technology make it easy, but that is often not the case: The advances make it possible, not easy. So, it’s more complicated than most people realize. Whether it’s robotic process automation (RPA), or more cognitive artificial intelligence (AI) systems like IBM Watson, they can be very complicated automation systems to build and keep operating.
This is exactly where an IT organization can help drive material change in the business – through automation. On the operational side, it can help reduce or realign resources, which provides downstream positive financial impacts, which the CEO and CFO are very interested in achieving. Automation can also be somewhat disruptive in terms of changing the processes that you use to serve your customers, which the COO and the chief revenue officer (CRO) are looking to achieve.
If you are the head of the IT organization, the real question is: How can you focus your IT team on a greater number of projects delivering the “two A’s?” Projects that will result in new or larger business opportunities for the company to bring organizational change and showcase the many ways your IT organization can deliver clear value.
The answer is often found once you assess what is core versus context to your IT team’s mission. As the COO or CFO, I am often operating (and encouraging my teams to operate) under the philosophy of focusing on core, whether we are doing it inside our organization or assisting clients with transformational initiatives. Focusing on core means ruthlessly assessing what adds value, and should be retained in-house, and what might be a distraction (“non-core” or “context”) and a potential candidate for handing-over to a managed service provider (outsourcing).
For the IT organization, it is absolutely core for them to be strategic technical advisors, to apply their technical expertise to the business directly, to be solution finders and implementers of those solutions: stakeholders in the business operations and stakeholders in the customer experience. In my opinion, the best two areas of focus for IT are data analytics and automation.
It should be context for you to provide functions that you can easily outsource like data center management, device monitoring, and legacy system support. Much of what today is on-premises can often be moved to a SaaS, IaaS or PaaS model.
As an example, earlier in my career, I helped a large healthcare insurance provider (a payer organization) outsource 600 people, half in IT and half in claims processing. My initial reaction was one of confusion, as I believed claims processing must be absolutely core to an insurance company: As a “payer” organization, paying claims was a fundamental part of their business, or at least, so I thought. I remember meeting with the CEO, who said, “Our business going forward is going to be about health and wellness. Processing claims is not going to be core for us.” We were able to execute on his vision and help him develop the core company he envisioned.
This – outsourcing – is a great opportunity that most companies haven’t fully leveraged yet – and one that offers a material competitive advantage. Mid-market enterprises, in particular, have been slow to take advantage of this great opportunity to shed context work activities in their back-office functions – whether it’s IT, finance and accounting, marketing or HR. Professionals in these functions are best utilized when they leverage the underlying work being done to develop and implement strategic change: It’s not the processing that enables that. The best example I can offer, outside of IT, is related to financial reporting. Producing the financial reports is context; analyzing the results to help business unit leaders adjust their focus and direction is core.
In my next column, I will detail how the IT organization can to focus on its core mission by employing a managed services provider model for context.
MTM Technologies, Inc. is a Cisco Gold Certified Partner, meeting all requirements for attaining the broadest range of expertise across multiple Cisco technologies. We have achieved Cisco advanced specializations in the following areas: enterprise networks architecture, security architecture, collaboration architecture, and data center architecture. MTM Technologies has integrated Cisco Hybrid IT, Cloud and Managed Services, and ensures high customer satisfaction in its end-to-end Cisco solution offerings. As a Cisco Gold Certified Partner, MTM Technologies has access to Cisco’s comprehensive sales, technical and lifecycle services training and support.