Many CIOs express the desire to be strategic and relevant to the C-suite and yet struggle getting there
Why can’t all businesses create an “Amazon” experience? What is it that makes buying shoes on Zappos almost a religious experience? Many articles, books, stories, and speeches have been delivered telling us all the not-so-secret formula for achieving similar results and enormous business value creation. Companies that pull it off seem to do so in the open and don’t appear overly concerned with competitors copying their formula for success.
What are the barriers stopping you from turning information into a competitive advantage?
The key is realizing that the slick web interface and reliable information at your fingertips is not where the magic happens. We all would love to be in peak physical condition without exercising or eating right. Similarly, many companies desire competitive differentiation without taking care of the infrastructure and generating reliable data with efficient back office operations. Imagine launching a new customer portal that is slow to respond and displays inaccurate pricing.
What is the path to competitive differentiation?
Infrastructure and back office operations will never yield competitive advantages since all companies have servers, email, pay their employees, collect cash, and close the books. To the extent your company does these things poorly you are creating a competitive disadvantage over your peers in the marketplace and are inhibiting your business from achieving the real advantages of market differentiation. You must therefore convince your business to invest in appropriate infrastructure and back office activities that erase your market disadvantages and unlock the potential to disrupt competition as a benefit in the future.
But I want competitive differentiation now and don’t want to wait for the infrastructure and back office operations to be perfect. How do I have it all now?
First, set up a completely separate team focused on infrastructure only and establish meaningful metrics to include response times, help desk ticket management, up times, good change management, and security, among other things. This team is charged with only achieving best-in-class performance of the infrastructure and nothing else. They must stop any “disadvantages” being caused in the business through unreliability of systems. Of the three layers this is the easiest to fix with money and the right people and companies can see the benefits quickly from these investments.
Second, find the people who like to process re-engineer and focus internally on software improvements as well as master data management. There are people who are really good at this and can over time remove competitive disadvantages allowed to exist for years around transacting business. This step of the transition to competitive differentiation takes longer but can be prioritized and completed in phases that contribute to the ability to work on differentiation projects. For example, cleaning up the item master to have accurate pricing based on region and customer discounts would take priority over applying cash faster to GL accounts. Accurate pricing would lead us to being able to sell product online while applying cash faster likely would not. This step is also difficult to accomplish as it involves the business operators and IT as a participant or facilitator of these changes.
Failure to focus on data accuracy slows or stops the transformation of information into a competitive weapon.
Depending on the size of your business, geography, and the organization structure, progress may be very difficult. It is key to get the CEO behind these not-so-obvious nor exciting first two steps as precursors to creating business advantages in the days to follow.
Third, set a separate group of people apart from the first two who are charged with creating the competitive differentiation opportunities using systems as they become stable and reliable. This group becomes the customers of the first two. Infrastructure and back office teams would prioritize and deliver improvements based on our identified areas for creating competitive advantage. As one example, if market information at the fingertips of our sales teams is a top priority, then identify the back office data that will feed into this tool and make sure it’s timely and consistently reliable data. As you find tools needed to provide the information make sure infrastructure teams are included to tune networks, WAN’s, and security so it actually runs easily and reliably. Identify a CRM system to use and now feed it accurate information that gets delivered real-time to your sales staff. As they walk into a customer meeting they are able to easily pull up current orders, past due invoices, notes from the last meeting, late deliveries, sales brochures, sales by segments, and even relevant competitor information on their product offerings. Most importantly, the information they are seeing is trustworthy and can be counted on.
It is vital to align investments in tools with the maturity level of the back office. It makes no sense to invest in a Business Intelligence tool if back office operations are generating bad data on an unreliable infrastructure. Cloud solutions have helped shortcut some of the infrastructure layer investments of the pyramid but have exaggerated the master data management and system integration needs as silos of information get spread around the globe on other people’s computers.
The top of the pyramid is the one that gets the attention of the C-suite who want to create competitive advantage, take market share, and grow the business. As you mature IT to deliver competitively you and your team become a strategic asset and start getting the attention from the top of the business. Educate the executive team on your plan and get their help and endorsement on the needed changes. You can accelerate the transition by carefully coordinating investments in infrastructure and back office efficiency with your plans for competitive differentiation and dividing the work appropriately. Remember this is a journey and if it were easy everyone would already be there.
This post was originally published at https://www.linkedin.com/pulse/what-c-suite-wants-from-chief-information-officer-steve-holt/.