Deliverables of Information Technology for business

Have you ever noticed, that most common definitions of information technology (IT) are artificial and misleading since they put the technology part in the foreground, instead of the information part?

Examples:

▶︎ „Information technology (IT) is the use of computers to store, retrieve, transmit, and manipulate data, or information, often in the context of a business or other enterprise.“

▶︎ „IT or information technology refers to the development, maintenance, and use of computer software, systems, and networks. It includes their use for the processing and distribution of data. Data means information, facts, statistics, etc., gathered together for reference, storage, or analysis.“

▶︎ „Information technology is the study, design, development, application, implementation, support or management of computer-based information systems.“

▶︎ „Information Technology is s set of tools, processes, and methodologies (such as coding/programming, data communications, data conversion, storage and retrieval, systems analysis and design, systems control) and associated equipment employed to collect, process, and present information. In broad terms, IT also includes office automation, multimedia, and telecommunications.“

▶︎ „Information Technology is the technology involving the development, maintenance, and use of computer systems, software, and networks for the processing and distribution of data.“

As a consequence of these artificial and misleading definitions IT departments are often perceived from the outside as little shop of horror, which primarily attract tekkies, one-track specialists and nerds with lacking communication skills and missing business understanding.

To my understanding IT is the application of technology to solve business or organizational problems. This happens in order to provide the following key deliverables for business:

1. Improve decision-making by applying statistical and mathematical methods to data
2. Process vast amounts of data rapidly
3. Automate workflows comprising standard tasks
4. Make outputs of processes predictable&repeatable
5. Reduce failure rates caused by manual data processing
6. Release capacity for more creative tasks
7. Reduce (personnel) cost
8. Shorten lead/cycle times
9. Make local data reusable company-wide
10. Connect people&locations
11. Provide access to data to anybody anywhere at any time with any device
12. Create data consistency (or make data inconsistencies visible)
13. Increase flexibility, usability&efficiency of working environments
14. Protect intellectual property
15. Enforce compliance of business processing
16. Create transparency on business (process) status
17. Increase ease of doing business for customers&suppliers (one-click-orders)
18. Create digital customer channels

Just as important as the business-oriented understanding of IT is its systematic operationalization. In order for an (IT) organization to succeed, employees&leaders need to be clear about their jobs and how to perform them well. As simple as this sounds, it is (too) often taken for granted.

One of the key ingredients to build a world class (IT) organization is to ensure that your employees&leaders have a clear understanding of their goals (which should ideally be derived to down from the company goals). These goals specify what the organization expects of them and how they can contribute to the success of the overall organization.

I have made excellent experiences with linking personal goals to so called „business roles“. A business role is a group of related skills with a level of authority to perform a given task. This includes all task types whether they are a manual or system enabled. Usually one job can comprise 3 to 5 different roles. The head of a department may apply for example the roles of a leader, a head of profit center, a change manager, a colleague (for his peers) and an employee (of his superior).

Goals should preferably be formulated in a „smart“ way, meaning „specific“, „measurable“, „attainable/achievable“, „relevant/realistic“ and „time-bound“ (see: https://www.mindtools.com/pages/article/smart-goals.htm).

The following chart provides a more popular illustration, of how „roles“ can look like in practice including private and business environments. The goals related to the various roles in this example are not formulated in a smart way, however, they show the importance of behavioral goals, which means goals can and should not only be linked to the fulfillment of budget, time and quality deadlines, but as well on the way how these deadlines have been achieved (e.g. in an cooperative style).

To set up „goals for roles“ allows you to establish a consistent and flexible goal hierarchy across the entire company, which is to my experience a useful and efficient approach. The following chart illustrating the „hierarchy of goals“ is taken from an article published at Startups.com on July 12, 2017: https://www.startups.com/library/expert-advice/startups-co-guide-business-goals-hierarchy-goals.

Important: Goals, business target agreements, rules, regulations and even incentives and bonuses always have side effects. Each organization optimizes itself within its own borderlines. If you set up for example a service department within a company as profit center, this service department will usually try to decrease its cost and maximize its revenues – sometimes even at the expenses of other departments. These kind of undesired and counter productive side effects have to be thought trough carefully before putting respective guidelines into effect.

More detailed information on this side-effect matter are provided in my blog „The unwritten rules of the game“ published on April 11, 2017: https://kubraconsult.blog/2017/04/11/the-unwritten-rules-of-the-game/ (German version: https://kubraconsult.blog/2018/05/16/die-heimlichen-spielregeln/).

Corporate Headquarters in general and Corporate IT departments in particular are often perceived by Business Units and Regional Units as escapist hydrocephalus only producing cost and useless bureaucratic regulations without any business value. And vice versa Business Units and Regional Units are often perceived by Corporate Headquarters as a bunch of mavericks who intentionally do not comply with rules&regulations and reinvent the wheel numerous times because they all suffer under the „not invented here“ syndrome.

Sounds familiar? Well, you never walk alone and the cost of non-conformance including the cost for the so called „shadow IT“ creating defragmented, inconsistent and redundant data silos set up by the decentralized mavericks are one of the most interesting indicators for the customer orientation, performance and communication skills of your Corporate IT department.

The cost of non conformance caused by IT are called as well „tech debt“. A comprehensible introduction of this matter is provided here: https://www.linkedin.com/posts/kurtbrand_are-you-familiar-with-the-concept-of-technological-activity-6572478326999404545-qpFo and illustrated by the following cartoon:

Citation: „Technical debt is a metaphor used to describe a situation in a software development, where a shortcut or workaround is used in a technical decision. In software development, a shortcut or workaround can give the company a benefit in the short term with quicker release to the customer and an advantage in time-to-market over the competition. However, if these shortcuts and workarounds are not repaid, technical debt can accumulate and hurt the overall quality of the software and the productivity of the development team in the long term.“

Often technical debt gets associated with workarounds or shortcuts happening in software development. However, a similar phenomenon of taking shortcuts or workarounds also happen in other areas of IT management.

Finally, an (IT) organization should have a vision, mission and recently also a „purpose“.

Vision is usually understood as a „mental picture of the future“, which should be formulated as short, crisp and inspiring or motivating as possible. The mission answers the question „Why does our (IT) organization exist at all? Vision and mission must be taken into account when developing corporate (IT) goals and the (IT) strategy for achieving them.

The Purpose, for which there is unfortunately no really good German translation, since both „Unternehmenszweck“ and „Unternehmensabsicht“ sound somewhat bureaucratic, forms a further framework for corporate goals and strategy.

Steve Denning’s valuable considerations, why corporations are looking for a purpose are provided in a Forbes article published in August 2019 – citation: „By 2019, maximizing shareholder value has come to be seen as leading to a toxic mix of soaring short-term corporate profits, astronomic executive pay, along with stagnant median incomes, growing inequality, periodic massive financial crashes, declining corporate life expectancy, slowing productivity, declining rates of return on assets and overall, a widening distrust in business. […] It’s good news that major corporations have recognized that a sole focus on shareholders is financially, socially and economically wrong. Even Jack Welch himself—the idea’s leading exponent—in 2009 had come to call it “the dumbest idea in the world.” Shareholder value is the result, not the goal of a corporation.“

Source of citation: https://www.forbes.com/sites/stevedenning/2019/08/19/why-maximizing-shareholder-value-is-finally-dying/#7353de9e6746

The purpose of a company could (if not even must) comprise the following elements, which all directly or indirectly intend to improve the customer experience.

Conclusion: Put the deliverables for business in the foreground when setting up your IT organization, define mission, vision and purpose and hire the following kind of people:

Complementary readings:

▶︎ „Business-oriented IT – trying to square the circle?“ published on August 24, 2018: https://kubraconsult.blog/2018/08/24/geschaeftsorientierte-it-die-quadratur-des-kreises/ (so far only available in German).

▶︎ „Thoughts on the basics of change“ published on August 28, 2018: https://kubraconsult.blog/2018/08/28/basic-prerequisites-for-effective-change/ (so far only available in English)

▶︎ „How to successfully change a corporate culture“ published on June 10, 2017: https://kubraconsult.blog/2017/06/10/how-to-successfully-change-a-corporate-culture/ (German version: https://kubraconsult.blog/2017/05/27/wie-kann-man-eine-unternehmenskultur-nachhaltig-veraendern/).

▶︎ „Why Enterprise Resource Planning (ERP) projects really fail“ published on February 9, 2018: https://kubraconsult.blog/2018/02/09/why-erp-projects-really-fail/ (German version: https://kubraconsult.blog/2018/02/08/woran-erp-projekte-wirklich-scheitern/).

▶︎ „The Chief Information Officer’s ultimate reading list“ published on May 18, 2018: https://kubraconsult.blog/2018/05/18/the-chief-information-officers-ultimate-reading-list/ (German version: https://kubraconsult.blog/2018/05/18/die-ultimative-leseliste-fuer-chief-information-officer/)