How CIOs Shape a Digital Transformation Strategy
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When IT takes the role of a partner to the business, the benefits are remarkable.
When IT takes the role of a partner to the business, rather than as a technology consultant or supplier of IT services, the benefits are remarkable.
According to a McKinsey survey on business technology, IT organizations that play a partner role by engaging the business to shape an overall business strategy that effectively leverages technology tend to perform better in many arenas, including the delivery of core services and the creation of a healthy organizational culture.
While most respondents believe IT should be a partner to the business, few say IT plays that role today.
As the CIO of Florida State College at Jacksonville, Christopher Markham has taken the lead in aligning technical and business value at the educational institution.
"I believe that in most organizations, there is already a seat at the table for CIOs," Markham said.
"The question is whether or not they take it. It's possible for any IT organization to transform into more than just the overseer of the IT infrastructure," he said.
How is this accomplished?
CIOs need to develop business analysts and process experts who can provide them with information needed to make impactful decisions. However, knowledge is not enough.
"We need to empower our people to create unique solutions for our most pressing business problems by synthesizing knowledge gained from many different places," he said.
CIOs can create significant competitive advantages through strategic use of cloud-based services and applications, be they public, private or hybrid. Along with big data and the internet of things, these technologies will help accomplish broad business goals such as driving revenue growth, targeting new markets and improving customer service. The CIO and IT department can be more strategic about making users more productive and relieving them of many of the mundane and time-wasting administrative tasks that can consume an entire workday.
"This is very different from the CIO's traditional role of focusing only on maintaining the IT infrastructure and operations," he said.
Aligning IT with business strategy
The McKinsey survey results also suggest that the pressure on IT to perform will increase with the growth of third-party services, such as cloud and infrastructure as a service, and of digitization. With digital initiatives, the companies where IT plays a partner role are further along in both implementation and achieving business impact.
Nearly all surveyed executives said finding talent is a challenge and a possible longer-term barrier to improving IT.
At organizations where IT is a partner, respondents are more than three times likelier than all others to say that the IT function is very or completely effective at implementing bottom-up innovation and at creating a healthy IT culture.
From bringing ideas to the business to delivering projects on time and digitizing business processes, the partner respondents are at least twice as likely as others to report that IT is effective. The survey also revealed that:
*49% said business treats and manages IT as more of a "supplier" of tech services, while 22% said the tech department acts as a "consultant" to provide input on plans for business as related to IT.
*72% of non-IT execs said the improvement of the effectiveness of IT business processes should be a priority, but just 57% of tech execs agree.
*69% of execs at companies in which IT is a business partner said the tech department collaborates with business on digital initiatives (and both groups are accountable)in contrast to 34% of execs at organizations in which IT is not a business partner who said this.
To reap the full benefits of a partnership, stakeholders across the board must adopt a partner mind-set toward the services (and value) that IT provides rather than thinking of their IT colleagues as consultants or suppliers."
More than 700 tech and C-level execs took part in the McKinsey research.
Taking a seat at the strategic table
Tyler Fisher is the CIO for Gordon Memorial Healthcare Services (GMHS), a public hospital district consisting of a 25-bed Critical Access Hospital, two rural health clinics and a long-term care facility. He has revolutionized the way GMHS approaches health care IT by successfully converting the organization from an entirely physical environment with only a single server to one that is 95 percent virtualized.
As a member of GMHS' top executive leadership and administration team, Fisher oversees all IT (including electronic health records) implementations, maintenance issues, concerns and projects throughout the entire organization.
Fisher helped the hospital transition from a primarily paper system to a digital one.
"While record keeping, keeping the lights on and reducing costs are all very important aspects of health care IT, they certainly aren't the only ones. As health care is becoming more electronic and more systems are being developed in this space, it has become critical for IT to be a part of the conversation," he said.
"At GMHS I serve as a member of our top executive team so that I have visibility of the strategy and where the organization is headed. I and other members of my team also attend weekly and monthly meetings that other departments hold as semi-silent observers. The reason we do this is to better understand the challenges and desires of our fellow employees, which I feel is a critical piece of information for IT to have," he said.
"We take this information, and we use it to inform our strategy moving forward, and adapt our technology and systems to meet everyone's needs. By listening to our clinicians and working to acquire and customize our systems based on their needs and desires, IT becomes an important part of not just patient care, but the patient experience as well."
D.P. Morrissey is a freelance writer based in New York City. He covers business, technology and how they intersect.