bITa Planet: So the business has to take responsibility here?
Skinner: The business leader has to get it. I wrote the book (IT is About the Strategy) originally for business leaders. Until they understand IT, the technology people don’t have a chance. And I don’t believe many of technology IT leaders will make the transition (from being a technical head of IT to a strategic head of IT). Small businesses plateau at $75 million or $100 million and they can’t grow because they won’t change out leadership. That IT guy got them there, but now he’s standing in the way of the business because he or she usually isn’t strategic and not always able to make that transition. The business leader probably has to make a tough decision: Who got you there probably won’t get you to the next level.
What’s your proposition for an IT strategy?
IT Tactics is about how a strategic approach drives down into tactical maneuvers, and drives that down into performance measurements and job descriptions that make sense for employees. When I did this [at one company], I had low turnover because they understood tactically why they were doing what, at individual level performance metrics that mattered, and everyone knew what they needed to do to perform well, and get raises, and how that tied into tactical and strategic things. A lot of companies expect high turnover in IT, they expect some tactical efforts to work and some not to work. They are not as successful ass they could be, in my opinion.
Let’s take the business process strategy — that is the largest one I talk about. Most IT organizations are not organized properly. They always organize around technologies — server group, network group, telco group. And only in the larger organizations, really large like JP Morgan, do they organize around process.
Almost all small businesses at a certain size need to organize around process. There shouldn’t be a server group; there should be a server engineering process, a server support process, and in breaking out from a process perspective you get responsibility for servers in several places — service desk, second-level support group, and engineering, which is responsible for design and research and configuration of servers. You build performance metrics based on responsibility for some part of the server support process.
My second strategy is technology focused. This is needed a lot when companies have reached a plateau, and things are working well, and there’s a good customer base, but you have problems growing the business. Usually IT is part of the problem — we can’t add new customers or lines of business because our technology group can’t support that. We don’t have the right systems or infrastructure in place. It’s a business model strategy that is very much technology-focused. First, you lay out your business model in a flow chart, from looking for customers, to serving customers and getting them to pay you. Then you lay technology models on top of the business models. If you take a look at the technology model over the business model, with a bit of work you can identify those strategic technology areas that are impediments to the business.
In the book I use an example of mail-order medical supplies. To ship products we needed doctor and patient signatures, which was a very manual effort. It didn’t take much work to say document management was a key inhibitor for the business, and to grow the business we had to solve the document management problem, and make that a strategic area of focus. This was compared to what was done previously, which was spending several million dollars in marketing and customer handling projects that didn’t fit with any strategic plan and were not helping the business. A strategy forces you to focus on the right stuff and lets you go back to the business and stop projects that are not in a strategic area of focus.
Then there’s the business layer strategy. The business layer strategy says stop being good at infrastructure. There’s no reason you need LAN or WAN experts in a small IT department. There’s nothing you can do in infrastructure to give you a competitive edge. Outsource that as much as possible. Build it like a commodity. If a small business leader has to think about network bandwidth speeds, that’s a problem.
How do CIOs who want to succeed as strategists practically embrace these models?
Unless the IT department is really struggling and the business recognizes it, they are not open to discussing it, to planning ahead for the next barrier. But it’s very important for the CIO or IT director to get in the face of the business people and say, ‘Here’s what I think you are trying to do and here’s how I’m going to try to service you.’ The IT person’s job is to push the business into strategic thinking of some sort, or else it feels like the IT person doesn’t have a chance.
This article appears courtsey of bITa Planet.com.