Tag Archives: Business-IT Alignment

What’s The ROI of Service Management?

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IT service management has typically been seen as yet another cost inside of what is perceived to be a cost center known as “IT”. Why? Because many IT organizations still view service management as operating overhead…and nothing else. The potential business value of good ITSM is ignored.

Many IT organizations could start becoming a strategic organizational partner if they understood the ROI of their work. ROI, or Return on Investment, is an important financial metric that most value centers use to measure success. Unfortunately,  90% of all technical support organizations fail to measure ROI. 

But, a simple shift in thinking about service management and ROI will create major opportunities for IT.

Why is ROI important to IT?

Why should IT leaders care about ROI? Simply put, ROI is the language of the business. Everyone in the C-Suite understands ROI and how important it is in making business decisions. When IT leaders start discussing ROI with peers, they are taking the “techno-speak” out of the discussion.  As a result, ROI makes IT more relatable and understandable to the rest of the business.

Relating IT in terms of ROI within the organization can lead to bigger budgets, better staffing, and improved service relationships. Data shows that top performing IT support organizations produce a ROI of 500% or greater on an annual basis!

Understanding the ROI of Service Management

Measuring the ROI of service management starts with quantifying work. But not in the ways that many typically think, like counting closed tickets or tracking time to resolution. Rather, quantify service management in terms that truly demonstrate business value—measures like savings (or “costs avoided” as an early CFO of mine schooled me about) through better processes, improved productivity, or investments in innovation.  These are the kinds of topics business colleagues care about – not IT operational measures. 

Here are three examples where you can illustrate a business-relevant ROI of good service management. 

ROI Area #1 — Time is Money

According to estimates, the global impact of unplanned downtime is 14.3 billion and employees lose an entire day of productivity due to unplanned downtime. 

Many ITSM leaders measure IT productivity in terms of number of incidents resolved and time to incident resolution. This is a flawed approach.  An incident is not a “value-add”. While there is (limited) value in resolving an incident, the real business value is not having incidents at all

So how might good service management practices produce an ROI?  Let’s take an example. Company XYZ implemented service management improvements during quarter two. These changes included improving change enablement practices and developing and publishing self-help knowledge articles regarding the most-frequently encountered issues. 

Q1 Q2 Q3 Q4
12,792 12,374 10,556 9,843

Because of these changes, XYZ saw over 4,700 fewer tickets in Q3 & Q4 than they had in Q1 & Q2. 

Now let’s apply money to the scenario.  Let’s say every ticket costs the company $10 in productivity loss (of course, it’s much more than this!).  By implementing these improvements, IT helped the organization avoid nearly $50,000 of lost productivity. That’s where the real value and the ROI of service management begins to show itself. 

ROI Area #2 — Avoid unnecessary cost with self service 

Another ROI-enhancing area for service management is the concept of “shift left.” Shift left means moving support and enablement activities closer to those doing the actual work.  For example, moving incident resolution or request fulfillment from a desktop support team to the service desk or from the service desk to Level 0 (self-help), can help an organization avoid unnecessary escalation-related costs. Unnecessary escalations result in support costs that are not directly reflected in performance measures.  Because these escalations appear to be just ‘business as usual’, the cost associated with those escalations go unnoticed. 

How many tickets are unnecessarily escalated that could have been solved by Level 1 or by self-help? According to TechBeacon, a typical service desk ticket can cost around $22. But escalating a ticket can cost an additional $69, making the total cost of the ticket $91. If you are handling tens of thousands of tickets, these costs add up quickly.

But when self service offerings are provided for those repeatable and predictable support and enablement activities, your organization avoids the costs associated with ticket escalation.   

ROI Area #3 — Spend on innovation, not support

This last area is perhaps the most important but often the most forgotten. It’s where poor IT service management practices drain resources from innovation.

To understand how good service management facilitates innovation, let’s start by understanding the basis of IT budgets. Generally speaking, IT budgets have three categories of costs:

  • Fixed costs, like salaries, support contracts, and other operating expenses. These costs typically do not change dramatically year over year. 
  • Innovation, in the form of new projects and improvement initiatives.  These costs represent outcomes that the organization would like to realize through investments in technology. 
  • Maintenance and support, which includes application and software updates, responding to incidents and requests, security monitoring and patching, and other day-to-day activities needed to maintain reliability and availability. 

Again, let’s use some easy numbers for illustration. If an IT budget is $1000, then typically fixed costs make up $500.  Innovation is budgeted at $300, and maintenance and support is budgeted at $200. The organization is optimistic about realizing new value through innovation.  Support costs are acknowledged and seem reasonable. 

Until the impact of poor IT service management practices become evident. Poor IT service management practices result in poor change implementations.  Lots of fire-fighting.  Too many meetings to discuss and decide what should be simple requests.  Automation that just doesn’t work well. Confusion regarding how technology enables current organizational outcomes.  Duplicative products and services. 

And suddenly, the IT organization is spending more time in maintenance and support, and less time innovating. And what part of the IT budget absorbs that additional cost?  The budget allocated for Innovation. Innovation is sacrificed to cover the (unnecessarily excessive) cost of simply keeping the lights on.

Good service management preserves that innovation budget, by doing the right things well when it comes to maintenance and support. 

What is the simple shift in thinking that enables service management ROI? 

How is it possible to realize ROI with service management, rather than looking at it as cost? 

The answer is simple.

It starts with a shift in thinking.  Rather than viewing service management as a means of control, begin viewing service management as a business enabler.  

While the IT operational aspects of service management are important, it is not why organizations need to practice good service management.  

Good service management enables organizations to achieve business outcomes.  Good service management enables organizations to realize value from its investments in and use of technology.  And one of the key ways to enable this shift in thinking is to talk about service management in terms of ROI.  

Tedder’s Takeaway – Why It Matters

Shifting how the organization views service management is a critical enabler for discussing the ROI of service management.  Moving the conversation from cost to results, then attaching ROI to those results.  Having the ability to discuss ROI with organizational peers not only makes IT more relatable, it also repositions IT as a strategic enabler, with a tangible way to understand the impact of good service management. 

Is it time to shift your thinking about service management?  Are you reporting operational measures instead of business outcomes?  What would be possible for your organization if you could illustrate the ROI of service management? Let Tedder Consulting help!  For more information, contact Tedder Consulting today.

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Are You Due for an IT Health Check?

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If I asked IT leaders what it was like the week the world went remote in 2020 due to the COVID-19 pandemic, I would guess 90% of them would have visceral reactions to the memory of that time. Many organizations were caught without any kind of technology contingency plan – and they felt the pain of that.

That hectic period should have taught every IT organization a valuable lesson – you can never predict when an IT emergency is going to hit.

Unfortunately, not every IT (or business) leader got the memo. They made it through COVID-19 disaster and went right back to the day-to-day grind, promising (hoping?) to get updated or new recovery plans in place when things slow down.

The problem is that the next disaster could be just around the corner. My apologies if this sounds fatalistic, but that is exactly what happened nearly 18 months ago. Organizations around the world were faced with a scenario that, while no one could have anticipated, very few had any kind of contingency. What will the next disaster look like? Could it be the moment that budgets are being reviewed and IT is suddenly on the chopping block? Or your supply chain breaks down and IT has to scramble to ensure customers receive their services?

IT disasters can be like heart attacks. There’s never a good time for one. But they can often be avoided – even prevented – by developing good healthy habits along with conducting regular health checks.

Three Healthy Habits of an IT Organization

How can you protect yourself and your IT organization from these IT “heart attacks”? Much like with your personal health, it all starts with developing healthy habits and regularly conducting IT health checks. Here are three of the top healthy habits you should develop in IT.

1. Regularly Discussing and Agreeing Business Value
IT has to understand the business value of their work. One of the healthiest things any CIO can do is to regularly connect with business peers to review value. Value is one of the hardest things to define within an organization, and may shift over time. The only way to confirm IT value is to review and discuss that value with other senior managers and leaders within the organization.

2. Regularly Review IT Service Definitions
Another healthy habit is clearly defining IT services in terms of business outcomes. Defining services demystifies what IT does and connects what IT does to business outcomes and value. Additionally, well defined IT services enable the organization to take advantage of its technology capabilities for competitive advantage. Regularly reviewing IT service definitions with other senior business managers not only positions the organization for taking advantage of current IT capability, but also to help identify and plan for future technology needs.

3. Regularly Map And Review Value Streams
Finally, having up-to-date value stream maps is a great health check for an IT organization. A value stream map illustrates how materials and information flow through an organization, and helps the entire organization clearly see how value flows in the organization. Value stream maps also provide a way for IT to identify where and how technology contributes to the value stream. Mapping and reviewing these value stream maps further enhances business relationships and also ensures alignment between IT and the business it serves.

Signs your IT organization needs a health check

  • Not sure if your organization needs a health check? Here are few signs that it’s time:
  • Your peers question the value and usefulness of IT products and services.
  • Your IT organization just can’t seem to get ‘caught up’.
  • You’re challenged to provide a clear ‘line of sight’ between investments in technology and business results.
  • IT is usually handed solutions, not opportunities, for solving business challenges.
  • Working in IT is chaotic and unrewarding. IT seems to spend more time “fire-fighting” and less time “innovating”.
  • No one asks questions about IT performance reporting.

IT Health Checks Don’t Have to Be Overwhelming

Much like eating a low-cholesterol diet and exercising more frequently, these IT health checks may initially feel like a pain that restricts your fun (or innovation, in an IT world). But the truth of the matter is if IT does these things on a regular and consistent basis, it stops feeling like a chore. You’ll have a shared understanding of business outcomes and the role that technology has in achieving those outcomes. You’ll have transparency between investments in technology and business value. And both the IT organization and the business overall end up with better outcomes, better investments, better relationships, and better businesses.

That’s why I strongly recommend scheduling regular periodic health checks for your IT organization. These healthy habits can’t be developed in a vacuum. They can – and should – be built into all your other initiatives.

At the end of the day, these “health checks” are service management activities. Service management shouldn’t be viewed as something that is done in addition to your work. Service management is how good IT organizations get work done in a manageable, reliable, and predictable way.

Need an IT Health Check?

Need help with your IT Health Check? We can help. With over 20 years of service management experience, Tedder Consulting can provide your organization with the objective assessment of the health of your IT-business relationship, and an actionable plan for instilling those healthy habits that will have a positive impact on your organization! Contact Tedder Consulting today!

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What Ever Happened to Critical Thinking?

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As businesses grow, so do the size and complexity of their problems and challenges. To solve those complex challenges and problems, leaders need to employ more critical thinking from themselves and their teams.

However, the world seems to be lacking critical thinking at a time when businesses need it most. And the lack of critical thinking isn’t just anecdotal tales told by frustrated leaders. There’s research to back it up. So, whatever happened to critical thinking and can we get it back?

Critical Thinking, Defined

First, let’s address the big question: what exactly is critical thinking? In the broadest terms, critical thinking is the ability to think reasonably, removing your own emotional attachment and personal bias.

Critical thinking requires individuals to rely on data and take the steps to analyze and evaluate data to make a decision. According to the Foundation for Critical Thinking, “critical thinking is self-directed, self-disciplined, self-monitored, and self-corrective thinking.”

It’s important to note that critical thinking helps you to avoid doing things simply because they’ve always been done a certain way or because a certain way seems easier or faster.

What has happened to critical thinking?

Has there really been a decline in critical thinking? There is research that shows this is a reality for many higher education institutions and businesses.

A Wall Street Journal analysis of standardized test scores given to freshmen and seniors found that the average graduate from prestigious institutions show little or no improvement in critical thinking over four years.

That trend extends into the business world. In May 2016, a survey by PayScale and Future Workplace found that 60% of employers believe new college graduates lack critical thinking skills, based on a survey of over 76,000 managers and executives. Additionally, about half of employers rate their employees’ critical thinking skills as average or worse.

There is no one main reason for this decline in critical thinking. Most experts attribute it to a combination of things.

To start off with, there is not a clear definition of critical thinking and therefore, many professors, instructors and employers lack a way to objectively assess critical thinking skills. And many teachers struggle to teach critical thinking so many simply don’t do it. The Education Post found that only 1 out of 10 educators teach critical thinking and that teacher usually teaches at a selective school or to a select group of students.

And some experts say technology is one of the reasons for this decline. According to research by Patricia Greenfield, UCLA distinguished professor of psychology and director of the Children’s Digital Media Center, Los Angeles, as technology plays a bigger role, our skills in critical thinking have declined and our visual skills have improved.

Anecdotally, I think it’s important to point out that a decline in critical thinking in business might not be the actual decline in critical thinking. Rather, the decline in critical thinking is due to a lack of opportunities (or ignoring opportunities) to encourage critical thinking.

Many businesses are only looking for the fastest (and sometimes cheapest) way to a solution. Such an approach is an anti-pattern for critical thinking. When you’re always looking for shortcuts, you’re cutting out the time to critically think. When you’re too quick to say something isn’t working and that you need to change directions completely, you’re sabotaging critical thinking.

All of this probably sounds like bad news for those looking to increase critical thinking in their organizations. The good news is that critical thinking can be taught and if it’s encouraged enough in an organization, it will be taught!

How to Improve Critical Thinking

Contrary to many opinions, critical thinking is not a soft skill. It can be learned and it must be practiced to be developed. Here are a few steps that will help you tap into critical thinking.

  1.  Gather more and better data
    Critical thinking is the ability to remove your own bias from problem-solving and the best way to do that is to look at the data. Many organizations are trying to make decisions with poor data. As an organization, you need to prioritize having as much high-quality data as possible. And as the IT organization, you must collect this data and ensure that the organization is using it to its fullest ability.

2. Question assumptions
This is the most important piece to critical thinking — and it’s often the most difficult part. Don’t just look at the “what” of the problem. Ask about why it’s happening. Be wary of the assumptions you may bring to the table and when you come to a conclusion, ask yourself if you’re basing the conclusion on the matter at hand or on previous experiences. Additionally, it’s important to separate data and facts from assumptions and inferences. Often, leaders will make an assumption and then treat it as fact. Dig into the why and use data to protect yourself from inferences.

3. Look for opportunities and potential
Critical thinking isn’t about shutting down opportunities or ideas. It’s about seeing possibility and potential based on data and without assumption. For example, failed initiatives and major service interruptions are opportunities to revamp processes or rethink strategies to create something better.

4. Look for new perspectives
To be a critical thinker, you have to get out of the echo chamber. Engage in active listening when discussing problems and solutions. Engage with and actively listen to colleagues with opposing views in your own organization. While most people dread having to speak to someone who simply does not understand their role, it can be an excellent exercise to obtain new perspectives that can give more context to problems, examine your own biases and spark more ideas. Additionally, as a leader, you may benefit from learning from other industries or experts from other organizations. Be open to new perspectives or ideas from unlikely avenues.

5. Manage ambiguity
Finally to improve your critical thinking skills, get comfortable with ambiguity. We are all operating in rapidly changing environments. The data we have will change. Your own perspectives will shift, as well the perspective of others. You have to be comfortable identifying that you are making the right decision today, but the way those decisions get made can change in the future. Getting comfortable with this type of ambiguity and being able to practice critical thinking despite this rapid pace of change will help you to make better decisions for your organization in the long run.

Critical thinking doesn’t have to be a lost art. It can and should be encouraged at all levels of the organization – but it must start from the top. If you’re wondering whatever happened to critical thinking in your organization, perhaps it’s time to take a step back to examine your own critical thinking approach.

Is your organization suffering from a lack of critical thinking? Has your organization found ways to nurture and encourage critical thinking? Please share your thoughts!

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You’re Talking About Value Wrong

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“Value” is one of the most overused and misunderstood terms in business today.

It is often thrown around in meetings and on company websites but while many organizations talk about value, very few get it right.

Why is that? What is the problem with value? For starters, value is a perception. What is valuable to one organization -or one person – may not be as valuable to another. And many organizations don’t define value at an enterprise level. As a result, company initiatives are fractured and less impactful because everyone within the organization is using their own value measuring stick.

The second problem with value is that too many organizations equate value only with cost savings. This is a misconception that can cost organizations a lot of money and time with little to show for it. Fact is that organizations, just like people, are happy to pay for things that they perceive as being valuable – cost is secondary.

If you’re talking about value wrong or worse, not talking about it at all, here are three points that will help you reframe the value conversation.

Value does not equal cost savings.

When thinking about value, it’s easy to just think in terms of dollars and cents. It’s straightforward and unlike value, everyone knows exactly how much dollars and cents are worth.

Now, cost is a factor in value but it should not be the leading factor of value. Because in addition to a price tag, there are intangible costs with any transaction. These intangible costs include things like time to make the purchase, the ease of making a purchase, the time to get set up with a product or service, etc. These intangible costs factor into the value and depending on the end-user, they could mean much more than a specific dollar amount.

When you’re discussing value — whether it’s the value of your product or service, a new technology, or your own IT services, don’t forget the intangibles and factor those into the value.

Outcomes by themselves don’t deliver value.

In an article for SysAid, I explained the difference between outcomes and outputs in reference to ordering a pizza. The outputs are the operational measures, like when you order a pizza and it arrives on time and at the agreed upon price. The outcomes are the results that show the value of that pizza delivery, such as did you get the pizza you ordered, was it hot and fresh, did it taste good and so on.

More IT professionals are beginning to focus on outcomes instead of outputs, which is very important! However, outcomes alone don’t get the job done when it comes to value. Competition is too intense these days and consumers have a lot of options, and high expectations.

So what combines with outcomes to create value? The experience of the transaction.

Part of value is experience.

If you don’t provide or enable a good experience, you’re not offering value. The experience is just as important today. In fact, Salesforce found in a survey that 80% of customers say the experience businesses provide is just as important as its products and services. And Gartner found that 81% of businesses compete primarily on customer experience.

Customer experience is more important than ever and if you want to deliver value through your products and services, you have to offer a seamless and personalized experience for your customers.

The Role of Service of Management in Value

By this point, it’s clear that value isn’t just about a price tag. It’s a combination of understanding what’s important to your consumers and consistently delivering those results – along with a great experience. In short, someone finds value when they can say “I got the outcome I needed and expected and I had a good experience while doing it – at the price I was willing to pay.”

The connection between the experience and outcomes lives in your service management foundations. Service management is how you can monitor the experience and ensure you deliver the outcomes that a customer wants so they can recognize the value of your products and services.

Is your service management approach strong enough to deliver value? Have you done these things in the last 12 months?

  • Met with your key stakeholders to review and agree on a shared definition of value
  • Mapped your value streams with all stakeholders, not just IT
  • Audited your workflows to identify and implement improvements
  • Implemented continual improvement strategies

Service management is an ongoing initiative but it can — and will — help to deliver value if it’s done properly with buy-in from the entire team.

If you’ve been struggling with showing how IT delivers value to the bottom line and you want to elevate your IT organization, you need to be sure you’re talking about value correctly. Review your service management approach. Examine the customer experience. You may just find the areas where IT can fill any gaps and deliver the value your customer needs.

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The Consequences of Undefined Services

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Delivering IT services is at the core of any modern IT organization. IT provides services to deliver or enable business outcomes and value. It seems straightforward.  So then, why do so many IT organizations struggle with undefined services?

As it turns out, what an IT service is actually is often misunderstood by IT professionals – and as a result, services do not get correctly defined.  Instead, many IT organizations identify things like laptop computers, password resets, and installing software as “services”.  And while these service actions (which is actually what these things are) are important for the end-user, none of those things indicate a business outcome.  The consequence of not formally defining services in terms that business colleagues can recognize as business outcomes and capabilities could be causing cracks in their organizations.  

Let’s break down what an IT service is – and isn’t – and examine just how impactful well-defined services can be for an organization.

What are IT Services?

As defined by ITIL4, a service is “a means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.

Add the phrase “through the use of IT” to the end of the above sentence, and you have the definition of an IT service. 

Specific IT services will differ from organization to organization depending on their industry and their business needs and requirements.  But any service definition always has its basis in creating value and delivering or enabling business outcomes.

Think about it.  A laptop computer – by itself – provides little value.  But when a laptop computer is used to securely access a corporate network, enabling use of a system that controls the manufacturing of widgets, which in turn, are sold to end-customers….now we have a different perspective.  It’s not about the laptop computer – it’s about having the capability to manufacture widgets. 

In other words, the laptop by itself does not deliver a business outcome.  But combined with all of the other things mentioned about (and more!), a business outcome (widgets to be sold to customers) is enabled.  And achieving that business outcome provides value. 

Why do IT services matter?

If we look back at our earlier definition of value, the important part of it is “delivering value to customers by facilitating outcomes customers want to achieve.

Harvard Business School marketing professor Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

The value is achieving the quarter-inch hole, not in the drill. 

To put it in IT terms, it isn’t about the network or the cloud or AI or the laptop or having a password reset.  It’s about the result. And if that result is considered valuable.

IT services deliver value to customers and enable customers to achieve business outcomes. It’s a vital capability, especially today when customer expectations are so high. 

But it’s more than that.

Having well-defined IT services demonstrates to the rest of the organization how well IT understands the business of the business. 

Well-defined IT services speak the language of the business.  Colleagues that work outside of IT can quickly recognize and understand the expected business value and business outcomes from the use of that service.

And well-defined IT services illustrate how IT contributes to the organization’s success.  

This all means that  IT must have a strong understanding of what outcomes the business needs to realize or enable, and how the people, processes, and technology delivered by IT contributes to those outcomes. Many IT pros struggle with this. It’s not enough for IT professionals to primarily focus on systems and technology anymore. They have to understand how what they do – and how they interact with others within (and outside of ) IT – contribute to the success of the organization.

It’s not about the drill.  It is about all of the things that work and are delivered together that results in the quarter-inch hole. 

But unfortunately, many IT organizations only talk about the drill. 

Why Do Organizations Resist Defining Services? 

Why do so many organizations struggle with defining their IT services? 

The first reason is that IT sometimes struggles to understand the customer’s perspective. Simply put, many IT professionals don’t understand the business of the business.  Therefore those IT pros are unable to articulate what they do in terms of defined services, and how those services provide a real business value to the customer. 

Another reason why many IT organizations don’t define services is that they have a resistance to governance. They look at governance as being overhead or something that gets in the way of getting work done. When you define an IT service, you’re creating a structure and setting good expectations for how IT enables business success.  And governance – done well and as appropriate – enables organizations to achieve their vision and objectives. 

But some IT organizations take governance too far.  Those organizations tend to stand up processes for process sake.  As a result, no one ends up following processes (much less understands the intent of the process to begin with) or using services as has been defined.

Defining IT services also helps the organization understand if its investments in technology are meeting the needs of the organization and helping the business achieve its vision and objectives. 

This has terrible consequences for the organization!

What happens when IT Services are not defined?

One of the biggest consequences of undefined services is that it causes tension between IT and the rest of the organization. Without defined services, there are no shared expectations – either within or outside of IT. The rest of the organization have no idea what IT is capable of doing for them. Services give IT the ability to set expectations and to create healthier relationships between IT and the rest of the organization. 

Undefined services also impact value and the way IT’s value is perceived. Without defined services, IT will have difficulty articulating the value they provide to the organization. This hurts IT’s ability to justify budgets and get buy-in for investments. If you can’t articulate the value of IT, you can’t show the ROI on any tool, piece of technology, or investments in IT. 

Finally, it’s difficult to prioritize work without defining services. When you don’t define your services, everything will seem like it’s the most important thing that needs to be done…until the next thing comes along.  IT will find itself responding to requests from users and working on projects that organizational leaders may not have any interest in doing.  

How to Start Defining Services

What is the best way to start defining services and showing true integration with the business? 

Begin by understanding business needs.  That means engaging your key stakeholders and decision-makers.

To define your services properly, ask these key stakeholders and decision-makers what outcomes they need to achieve to meet business goals and objectives.  Ask how they envision the use of or how they are using technology in achieving those goals and objectives.  Ask how they perceive value – and how they would measure that value.  

Then start identifying and defining your services based on what you heard from those stakeholders. Identify what it takes to deliver the outcomes and value that stakeholders need.  Identify the costs and risks involved in delivering those outcomes – and how IT will manage those costs and risks. 

Then write it down and publicize it using terms those stakeholders will recognize and understand. Any time you talk about technology, talk about it in terms of services.

And you’ll be on your way to much better business-IT alignment

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Business-IT Alignment isn’t a 50-50 Deal

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More and more companies are transforming via digital transformation and discovering new lines of business or radically changing their existing business models through the use of technology.  What does this mean?  It means that IT and the business have no choice but to become aligned if they want to succeed.

It’s no longer just “nice to have” alignment between business and IT. If the IT organization isn’t aligned with the business, the business will go around IT to make their initiatives happen — and that can have catastrophic consequences for everyone. 

It’s one thing to have a meeting with both the business and IT in the room and claim that you’re aligned.  But the realities of what alignment looks like and what it really means for IT and the business is more complex than simply adding IT to meeting agendas. 

What does it mean for the business and IT to be aligned? Who’s responsible for creating that alignment?

From Service Provider to Solution Provider 

According to Tim Winders, Vice-Chancellor of Information Services at Purdue University Northwest, “IT is aligned with the business when IT moves from being a service organization to delivering business solutions.”

The subtle difference between providing business solutions and being a service provider requires a proactive approach. As Tim explains it, “In the reactive model, IT fixes problems but is outside of the decision-making process.”  Being proactive as an IT organization means being “a collaborative business partner delivering solutions that solve specific business problems. IT collaborates with the business to identify business problems to provide proactive solutions, improving products, customer experience, and business reputation.”

The days of IT just implementing the right technology are long gone. IT has to be an engaged part of every business strategy discussion because technology touches every piece of the business.  IT must be engaged from the beginning if that technology is to work to enable value to the business and its end users. 

Mike Gill, CIO at Marian, Inc, explains it this way, “You need to ensure your solution delivery provides value. The value is not if you have the best technology or it runs the most efficiently, the value is if it solves a problem the business has.” 

Of course, it’s easy to say that the IT organization is driving value and is aligned with the business. But what does ‘alignment’ actually look like?  How do you know if you’re aligned? 

What Does Business-IT Alignment Look Like?

If business-IT alignment is connected to driving business value, then you have to start there. Of course, as I’ve pointed out before, the problem with “value” is that it’s a perception. What’s valuable to IT might not be valuable to the business – and vice-versa.  So it’s important that value is identified and agreed by every stakeholder in the organization — customers, partners, suppliers and internal stakeholders. Defining and agreeing on the definition of value as an organization is the first step to getting IT and the business aligned. 

Once value is defined, you can refine your workflows and processes to ensure they are actually delivering business value, including the appropriate measures within those workflows to check for value. For example, Mike shared a way that he can determine if IT is aligned with the business. 

“We have an internally developed ERP system and have the freedom to implement workflows that provide maximum business value – it is a custom system tailored to our company. One sign that we are aligned is looking at transactions in the system,” explained Mike. “Are users doing all the steps in real-time or are they catching up transactions at the end of the day? Looking at the logs you can see if a process that should occur over a longer period (days, not minutes) is mirrored by a similar timeline of transactions in the system. If I see those transactions happening by different people over the course of a day or two then I know the system is aligned to the business (both function and usability). If I see all those transactions happen within minutes of each other then I know they are just catching up work into the system because they must – [which indicates that IT is] not aligned.”

The key here is that Mike made sure the technology fit and supported the workflows of the business, instead of the other way around – a key to business-IT alignment. This enables the technology to be instrumented or monitored to confirm business value – and therefore, better aligned with the organization. 

Additionally, to ensure you’re aligned, look to see if IT is being invited to new projects and initiatives at the kickoff meeting. According to Mike, “It is easy to invite IT leadership to monthly and annual executive status meetings and feel like you are giving them importance or that you are aligning business and IT. That does matter, but it matters more when the regular business projects and initiatives are inviting IT representation in the first steps. It means the business and IT are given the chance to stay aligned from the beginning rather than create the feeling that IT just does what the business says – that never leads to good outcomes.”

IT leaders must regularly check in with other company leaders to ensure that IT is involved with all upcoming initiatives.  If you do that, you’re on your way to business-IT alignment. 

What To Do About Business-IT Alignment?

Once some signs of business-IT alignment begin to appear within an organization, you have to ask yourself one thing: “What am I going to do with this opportunity?”

I believe that IT organizations struggling with business-IT alignment fall into one of two camps. The first group doesn’t know how to achieve business-IT alignment. For that organization, they need to collaborate across the organization to define and agree on value, co-create workflows and solutions to achieve that value, and work together to monitor and continually optimize those solutions.

The other camp consists of organizations that believe that they have business-IT alignment – but they don’t. This is a much larger number of companies than the number of organizations that just can’t figure out alignment.  For these companies, the IT organization is in danger of losing its influence in the company – if it has any influence at all.

Business-IT alignment can often become performative in organizations. It’s easy to have meetings, to gain an agreement on a definition of value, and to create workflows that should enable the realization of value. It’s another thing to ensure that everyone in the organization – both from the business and from IT- is following through and living that definition of value. 

The important thing every IT leader must do is identify what happens after the big discussions, after the kickoff meetings,  and understand what is really going on in the day-to-day running of the organization. Is your team clear on the value it delivers and how it delivers it? Are you enabling your team to work across departments and proactively identify and promote the value you’re delivering? Are you enabling the rest of the organization to have input in how IT is operating and to provide feedback and suggestions for what needs to be done from a business perspective?

Business-IT alignment isn’t a 50-50 split. To achieve and maintain alignment, both IT and the business have to give 100 percent to make alignment work. But before they can both commit 100%, one team has to be the one to step up and put all the effort in first. I believe that team is the IT organization.  IT has to start giving 100% toward business-IT alignment,  even before the business commits to alignment. It’s work to get into alignment and the onus will fall on IT, especially in the beginning – but it’s work that pays off.. 

And remember, business-IT alignment isn’t a one-and-done activity. It’s a continual process that has to be monitored, mapped and measured on a regular basis. 

My challenge to you is to share: how are you staying aligned in your organization? What are your methods for checking and measuring business-IT alignment? Where are the gaps in business-IT alignment that you need to fill?

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Are You Inviting Trouble? 7 Signs You’re Attracting Chaos to IT

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CIOs are no strangers to chaos. Working in IT means you’ve dealt with your fair share of chaotic moments. Technology has an annoying habit of not working properly – even when everything seems to be set up correctly. IT pros have had to learn to keep their cool when the tech just isn’t working — and the end user is feeling the frustration.

Being able to handle chaos is a skill every leader must develop. But long-term success working in a continual state of chaos can cause problems. Chaos can cause a surge of adrenaline and some people begin to subconsciously crave that adrenaline rush they feel from chaotic moments. When that happens, they may start to create situations that result in chaos and can cause those adrenaline rushes. The best example of this would be a student who consistently procrastinates on their assignments because they feel they “work better under pressure”.

Is it really possible that accomplished professionals and industry leaders can repeat the same mistakes that a college student would make? Absolutely! Stress naturally spikes cortisol levels, which is the built-in alarm system in your body. That spike in cortisol is not necessarily a bad thing. It’s our “fight or flight” instinct and it plays a number of roles in our body. Specifically, it boosts energy so you can handle stress and then will restore the balance afterward.

Many driven and ambitious people love that energy boost and thrive on the tension that a challenge creates. After all, meeting and overcoming those challenges is how they found success!

But if you find your IT organization in a constant state of chaos, it might be time to check in to see if you’re causing it and making more trouble than IT needs. Here are 7 signs you’re attracting chaos to your IT organization.

You’re working in a vacuum

Siloed thinking and poor communication habits can cause many problems for an IT organization. Many technologists do not focus on their communication or collaboration skills. In many organizations, IT has been seen as unwelcoming and isolated. When you tune out other departments and their needs and don’t include them in solution designs, you end up with workflows that aren’t followed, products that aren’t used to their fullest capabilities, and too many “last minute” requests that cause stress.

You don’t communicate in business terms

Learning to speak the language of the business is one of the most important things a CIO can do. Without describing – in business, not technical terms – how IT solutions fit in to business objectives, you’ll spend a lot of time and effort defending your initiatives, shifting initiatives at the last minute, and potentially working on initiatives that don’t contribute to needed business outcomes. Once you start mastering how IT and technology contribute to business objectives, you can position your initiatives in a better light, and this will decrease resistance from the C-suite.

You have shiny object syndrome

Everyone needs the newest, fastest, shiniest technology, right?! No, they don’t. Non-technologists and leaders in the C-suite might always be pushing you to invest in new technologies, in the belief that those technologies will instantly solve every business challenge. But without proper analysis of the challenge that needs to be solved, this mistaken belief in bright and shiny new technologies will only keep IT and the rest of the organization spinning in circles. You will experience the tension and challenge of continually deploying and training on new technologies – and be blamed when those new technologies don’t address the problem that needed solving. And you’ll spend a lot of money on tools that “don’t work”.

IT success isn’t clearly defined

How is IT success being defined? Often IT success is defined only as delivering projects on-time and within budget. But that definition ignores IT’s contributions to business objectives and the organization’s bottom line. By defining IT success in terms of business results and bottom-line impact, the CIO becomes a strategic leader in the company, and IT becomes a valued partner within the organization, not perceived as a necessary, but expensive, cost center. By failing to establish IT success measures in terms of organizational success, you’ll spend time and energy on hitting metrics that don’t properly elevate the CIO or IT.

Pushing change at the wrong pace

Accelerated timelines can be common in IT organizations – but are they realistic? CIOs are often operating under unrealistic expectations (see above) and therefore trying to force innovation without laying the proper groundwork. This can sometimes feel like running straight on into a brick wall and expecting it to topple over on the first try. You will quickly burnout and exit out if you push change at an unreasonable pace. Instead, CIOs need to set realistic expectations with the C-suite regarding the pace of change and establish realistic and achievable milestones to show that digital transformation is on its way.

You spend all your time putting out fires

Are you constantly involved in every little fire that comes up within IT? If you can’t rely on your team to handle the day-to-day fires that will always exist in IT so you can free up your time to focus on the bigger picture and strategic initiatives, then you are contributing to that chaos. I’m not saying that you should ignore those fires, but as CIO, you have to trust your team to handle the day-to-day work and provide coaching and support to get IT out of fire-fighting and into leading business innovation. Your time is better spent focused on solving the bigger business challenges within the organization.

You ignore the foundations of your IT organization

Foundations can be boring. They do not cause stress or any excitement when (if?) you think about them but having a strong IT foundation is absolutely necessary. The foundations of your IT organization include your workflows, processes, and value streams, and are what keep the wheels of IT turning, even during the chaos. If you ignore the steps it takes to keep your foundations optimized, you will continually get stuck in day-to-day fires and siloed communications which waste your time and your team’s talent.

Having a little bit of chaos can be a good thing. It can inspire innovation and create motivation but it’s a little bit like rainstorms. You want enough of it to keep things growing but you don’t want to live in it 24 hours a day, 7 days a week. As the CIO, you have the responsibility to balance having that healthy level of chaos in your organization while at the same time, be the calm in the storm. That tension and those cortisol spikes will still come — only this time, it will be because you’re working on bigger challenges that will have a larger impact on the success of your organization.

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ESM is the Business Strategy Every CIO Needs

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As organizations continue to work through a pandemic, adapt to an ever-increasing digital world, and adjust to new customer and employee expectations, CIOs must continue to step up to the plate to help navigate these changes from a business perspective.

Perhaps with some organizations, CIOs have not been part of business decisions in the past. The pandemic has shown that organizations can have success when working with IT as a business partner. The reliance on technology and new remote work expectations have paved the path for CIOs into the role of business success partner. Smart CIOs are taking advantage of the opportunity by presenting a strategy that can help the business holistically — not just the technology aspects within the business.

And that strategy is Enterprise Service Management.

What is Enterprise Service Management?

Enterprise service management, also known as ESM, is an organizational capability for holistically delivering business value and outcomes-based upon shared processes, appropriate technology, increased collaboration, and better communication across the organization, not just within IT. ESM, done well, provides a strong foundation for a positive customer experience, positive employee experience, and digital transformation.

Before we dig further into what ESM is, let’s talk about what it is not. ESM is not just about extending ITSM into enterprise. This is not about IT barging in and forcing its workflows on the rest of the organization. It’s not just deploying instances of IT’s service desk tool across the organization. ESM is focused on leveraging the best practices of service management across the organization holistically to co-create business value for the enterprise.

What effective Enterprise Service Management does is get the entire organization on the same page. ESM processes reflect and support the entirety of value streams, not just the IT portions. This enables teams to have clarity around how work and value flows through the organization, and how technology underpins workflow and value. And in the digital age, knowing how work and value flows through an organization provides the ability to quickly shift and react to changes in market spaces and is critical for business success.

Why is ESM a business strategy?

The biggest misconception about service management is that it’s just something that is done only in IT. Service management has always been about delivering real business value and measurable outcomes for organizations. While service management is often associated with IT, many are often surprised to realize that service management is also being practiced in other parts of the organization, such as HR, customer service, and facilities. What effective ESM does is help organizations connect these often-disjointed pockets of service management together, creating a better working environment and improved results. That is especially important in our current world.

The way we do business now has drastically changed. Remote work has become more of the norm. We may have thought 2020 was the year of remote work but actually, it’s just the beginning. The percentage of workers permanently working from home is expected to double in 2021. Many organizations are creating hybrid models for working, allowing for both work from home and remote work opportunities. Forbes reports that by 2025, an estimated 70% of the workforce will be working remotely at least 5 days a month.

This divide in working conditions and how work is being completed will impact the efficiency of the enterprise. There are plenty of benefits to operating with remote and hybrid models, but enterprises also have a higher risk of creating silos. This isn’t a technology issue, it’s a business issue – and it’s one that ESM can solve.

When enterprises commit to and implement ESM, the result is enhanced visibility regarding how value flows through the organization. This makes it easier to identify problem areas, simplify workflows, and clarify expectations and roles. Over the long term, this will increase efficiency across the organization, which means decreased costs and possibly increased revenue.

As we said earlier ESM is not just extending ITSM across the enterprise. This should not be seen as a hostile takeover by IT. The goal is to leverage IT’s service management expertise to improve overall performance across the organization. In order for that to happen, the CIO and IT have to lead the way in establishing ESM as a must-have strategy in the organization.

ESM does incorporate principles of good ITSM, and the CIO and IT should know the best practices and mistakes to avoid when implementing service management. This is an opportunity for IT to demonstrate leadership based on their past experiences working with ITSM. By showing the rest of the organization real-world examples of how service management has improved collaboration and made work more effective and efficient in IT, IT can make the case for how ESM can improve the enterprise’s workflows as well.

The CIO and IT can make their case even stronger because IT are one of the few departments that interacts with every other department every day. IT understands the workflows of other departments because it helped design and implement solutions that support those workflows. Using this knowledge, the CIO can present use cases for ESM using actual workflows and initiatives from across the organization as examples.

The trick here is to understand the overall business goals and how the goals of the individual departments contribute to those overall goals. This especially applies to the CIO. If a CIO can demonstrate how ESM helps link departmental goals to enterprise goals, and makes it easier to accomplish both goals, they can convince other organizational leaders to rally around the idea of ESM.

How to Start Implementing ESM

ESM implementation is the opportunity for CIOs to exhibit their business savvy while delivering a solution that helps the organization work in a more holistic fashion. But there will be those who resist ESM and will need to be convinced. You need three things for a compelling argument.

Make sure the IT house is in order

If IT is not running efficiently or doesn’t have its service management house in order, no one will be convinced that ESM is the right move. Before taking service management out into the enterprise, make sure that IT’s workflows are running like a well-oiled machine and that there are no gaps in services, support, delivery, or communication. The successful use of service management within IT makes for a stronger use case for adopting ESM across the enterprise.

Collaborate with Other Leaders

As we discussed earlier, you have to rally the troops around ESM before it can be properly implemented within your organization. Start by having conversations with other organizational leaders about their 2021 goals, their challenges, and their needs. That’s the best place to start the conversation, because you need other leaders to see the “what’s in it for them”. If you can illustrate how ESM not only helps individual departments meet goals, but also link those achievements to organizational goals, they’ll be more likely to support your case for ESM.

Develop the Business Case

Finally, after you’ve ensured that IT service management practices are in order, and gained support from other department leaders, you’re ready to develop the business case for ESM.

When developing the ESM business case, focus on the five factors of value — improved productivity, competitive differentiation, improved customer satisfaction, decreased cost, and increased revenue. Link the anticipated outcomes from ESM to one or more of these factors, and you increase the chance that you’ll receive full support and funding for ESM.

Looking for more support on implementing ESM initiatives in your enterprise? Book a free consultation! I can help you develop a plan for bringing ESM to your organization.

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The Opportunity of Failed IT Plans

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What went wrong in 2020?

I know, it’s a big question and most people would probably say “Everything.” Or at least, many CIOs would confess that the original strategic plans they had for 2020 were not executed.

There were many initiatives that just failed to get off the ground in 2020 due to COVID-19.

Now that 2020 is winding down — what happens to those initiatives? Should you try to execute on them in 2021? Are they even still valuable to your organization? Will you still have the capital for them? How can you afford them?

Smart CIOs know they can’t carry on as normal. Just because something was on the plan for 2020 doesn’t mean it should continue to be on it for 2021. Yes, strategic projects are still strategic, but it’s time to address whether the strategy has changed. If it has, the CIO has to know how to protect IT’s budget while shifting initiatives.

This is where the opportunity of a failed plan presents itself and where innovative CIOs can reset their priorities, align themselves with the rest of the organization, and ensure budget protection for 2021.

Revisit Your Organization’s Existing Strategic Plan

First, it’s important to understand what impact COVID-19 has had on your organization. This means more than just a workforce that is now working remotely. How did it impact the way your business operates and delivers value to customers? Did business models change? Did you add any new capabilities that are still contributing to ROI?

Now look at your existing IT strategic plan. Does it incorporate the changes made because of the impact of COVID-19?

It’s possible you could have some major changes to make to the IT strategic plan. For example, if your organization has added new revenue streams, then you may need to completely change the strategic plan to incorporate those new streams.

Look for Opportunities in your Value Streams

As you review what has changed in your organizations, you should also be identifying the opportunities for IT inside of this new strategy.

This exercise is best if you know the value streams in your organization (whether they are brand new as a result of COVID or they were already in place). If you don’t know the value streams of your organization, then now is the time to map them along with other members of the executive teams.

Remember, this is a chance for meaningful, impactful change. It’s no longer “business as usual.” We can’t say “Well this is the way it’s always been done” because organizations have proven they are capable of agility and making big changes quickly. When mapping value streams and looking for opportunities, don’t be afraid to open up to possibilities that might have seemed impossible a year ago. After all, most people would have said taking an organization completely remote in 48 hours would have been impossible this time last year but by now, most IT organizations have accomplished exactly that!

Fix any Value Leaks

Now, after you’ve reviewed value streams and are fired up about the new strategic projects you could bring to the organization in 2021, there’s a big question to answer: Where do you find the budget for it?

Some IT organizations were fortunate enough to have larger budgets this year while they enabled remote working — but those checkbooks won’t be as open in 2021.

Here’s what you can do right now to protect your budget in 2021

Look for the value leaks in your organization. Value leakage is a common problem in every organization but few leaders know to look for it. Businesses don’t operate on a consistent basis every single day. Value leaks can occur when changes in business workflows aren’t reflected in technology workflows, or people weren’t trained on new products or features, or when services or products aren’t retired appropriately. Value leaks occur due to poor communications, or when the organization fails to fully understand the costs and risks of any change, no matter how slight it may seem. If no one is monitoring value streams and measuring how value is delivered, then value will start getting dropped along the way.

In the context of protecting the budget for 2021, you can start finding and addressing the value leaks that are happening right now in 2020. When you start to fix the leaks, you can prove to the organization that you’re creating more value. The more value you bring to the table, the more you can justify your future budget and protect the budget for those bigger strategic projects you identify when mapping your value streams.

The Key is the Big Picture

The most important thing any CIO can do to seize the opportunity of failed plans is to not lose sight of the bigger picture. 2020 didn’t go to plan for anyone and every organization experienced shifts that will impact future strategies.

Your strategic projects from 2020 might still make sense in 2021. Or they might not. What’s important now is to look at how the organization delivers value to its customers and the opportunities for IT to enable and co-create that value. Then look at how IT can create even more value by fixing existing value leaks.

I think everyone will say that 2020 changed everything. But only the most innovative CIOs will be able to say that 2020 changed everything in the best way possible.

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Can the CIO Save The Day?

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This year has been a banner year for IT. It’s only because of IT that so many organizations could continue operating in the face of the pandemic. IT has done its job on winning over the rest of the organization and most of the organizations now know they can count on IT. According to the 2020 Harvey Nash/KPMG CIO Survey, 61% of the 4,200 IT leaders surveyed said that the pandemic has permanently increased the influence of the technology leader. So how can the CIO and IT leverage this new-found influence? How can IT become more than the team that keeps the lights on? 

I think that this new influence can help the CIO become the most valuable player on the leadership team because they’re the glue that keeps everything together.

Now, some may argue that the CIO has been thought of only as leading a support team for decades. So they could not in fact be the glue holding an organization together. But that was before the technology boom. Today, technology is a foundational component for every business. From communication to employee experience to the customer journey, technology plays an important role in every piece of every business. As the impact of technology has grown, so must the role of IT. While IT and the CIO used to only solve technology issues, they now must solve business issues because the business needs technology. 

That’s why the CIO has the opportunity that no other executive does. No other executive can impact another department as much as the CIO can.  

This is, of course, a force that can be used for good – or evil. The CIO can be the bottleneck, holding back every initiative due to poor service or inefficient workflows. But they can also be the hero of the organization: playing an integral,difference-making role in every initiative.

John Bruno, Chief Information Officer at Aon, explains that the CIO role can become “an integrator – someone that works across the entire organization.”  

So what can a CIO do begin breaking down the silos and helping other departments?

 

  1. Get out of IT and into other departments.

The biggest problem so many CIOs have is that they can’t see the forest through the trees. Or to put it in more blunt terms, they can’t overcome the IT fire-fights that come up every day to actually get out of IT to see what’s happening in the rest of the organization. It is absolutely imperative that today’s CIOs do this. If you don’t feel that you can see beyond IT issues, then you’re not going to be able to support the organization as you need to because CIOs have to be the integrator. They have to be the ones to connect the dots and it’s impossible to do without collaborating with other executives and understanding what is occurring in their departments. 

What would happen if you as the CIO were able to take 2-3 hours a week to meet with other executives to understand their initiatives – and how IT can help make those initiatives successful? What would it cost you? If your IT organization were to implode because the CIO took 2-3 hours every week to work with other departments rather than help put out IT fires, then your approach to service management needs attention. The right service management workflows and foundation ensure that IT runs smoothly and is able to serve the organization, while the CIO works to innovate other areas of the organization. If you’re struggling to even find the time to work with other departments and trust that your IT team can keep running, it’s time to clean up your service management. Book a consultation with me and we can discuss how to get started.

 

  1. Identify the impact of technology in other department initiatives 

As I said earlier, technology is the thread that ties everything together and as the CIO, you hold the thread. You should be actively looking for ways to enhance other department initiatives with technology. 

In the old days of IT, many CIOs would roll their eyes at the idea of making more work for themselves by collaborating with other departments. But today, the innovative CIO knows that it’s not about making more work for IT. It’s about unlocking opportunities for IT to step up and play a more influential role in the organization. 

That means that CIOs have to get comfortable offering suggestions and solutions to other executives. Imagine what would happen if a CIO offered to support the head of HR in automating and digitizing the employee onboarding process. Imagine HR and IT co-creating that solution together, instead of HR assuming what technology they needed or IT forcing a solution upon HR without even understanding the complexity of the problem. 

Instead of a forced solution where neither side is happy, everyone would walk away with a collaborative outcome that improved the business overall.

And this isn’t just an HR opportunity. The CIO could do this for every other department.  Because you as the CIO are the expert in technology, you can offer your expertise to every area of the organization. 

 

How to Get Started

First, before you start working with any other department, you need to be certain that IT can operate efficiently. That means optimizing workflows and identifying any gaps in your service delivery. You can’t offer value to anyone else without first cleaning up your own department. (And if you need help, that’s my specialty! Book a consultation here.)

Once you’ve done that, begin forming partnerships with other executives. Invite them to ongoing meetings to learn about their initiatives and technology needs. If you approach this partnership as an opportunity for their department to achieve their initiatives faster and with less resistance from IT, then they are going to be onboard with working with you. 

Slowly but surely, you can begin to work with every department in this manner and before you know it, the CIO has not only elevated the status of IT but also the entire organization. 

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