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Growth Through Innovation...
...or how to avoid being outsourced

by Lior Arussy

August 11, 2009

Is your IT organization becoming a commodity? Not if it starts looking for ways to add irreplaceable value to the business and stops viewing itself as merely a manager of systems.
 

Imagine information as a product, and imagine IT managers as sellers of that product. What is the best-selling piece of information? What is the shelf life of information? Would it withstand a competitive environment? Would customers actually be willing to pay for it?

This is the way that IT needs to be viewed and managed. IT organizations that can make critical shifts and transform themselves provide irreplaceable value to businesses by making them adaptive. Those that don't risk becoming commoditized and candidates for outsourcing.

How do you effect this change? It starts with IT measurements. Instead of focusing on on-time service, metrics must measure information usage:

  • Did it grow or decline?

  • Is the information exercising a 50 percent growth in usage?

  • Should some information products be discontinued due to lack of interest?

  • What critical decisions in the organization took advantage of the information?

  • What risk was reduced due to better information usage?

IT should evolve its view and way of measuring itself to reflect business impact rather than maintaining a "plumbing system" and saying, "We deliver the infrastructure; what you do with it is your choice."

Role of SAP NetWeaver

Technology tools such as SAP NetWeaver can play an important role in the evolving IT agenda. The SAP NetWeaver components and overall platform can contribute to the acceleration of the strategy realization by unifying information sources in the company and aggregating information. This will allow IT to respond much faster to evolving business needs and avoid the delays imposed by isolated technology systems.

Helping users to better understand and prioritize the information available to them will increase information usage. Here, SAP NetWeaver's Business Intelligence and Knowledge Management tools provide valuable assistance to users in different organizations and allow them to take better and more intensive advantage of the information gathered in the organization.

Additionally, the portal and mobile delivery mechanisms that SAP NetWeaver offers allow IT to customize the way information is delivered to users based on their behavior and information consumption patterns. Users make better decisions when more relevant information is available to them. For example, an office-based sales forecaster might prefer detailed reports delivered through his laptop's browser, but his sales manager counterpart who spends 50 percent of his time on the road requires only exceptions to be delivered to his handheld device. This level of customization eliminates the "one size fits all" approach (which usually fits no one) and helps to ensure that the information will be used.The variety of capabilities in a platform such as SAP NetWeaver should allow IT professionals to realize the new strategy faster and become more accountable for the information products they deliver.

Keys to Transformation

This changes the position of IT from "the people responsible for plumbing" to "the people who ensure product usage and user satisfaction." Technology executives must view their role through a prism, looking at their product with a new perspective, taking into account information and user acceptance. They must become product (a.k.a. information) sellers, educators, coaches, and mentors of the use of their products. As such, their focus should shift from maintaining networks to ensuring usage and satisfaction of products.

The two key principles of this shift are the focus on product usage and the user experience and satisfaction. IT must engage in understanding how users consume their products and what makes them relevant. Like true product managers, they must ensure that the product is relevant and that the users "buy it" and are satisfied with it. Too often, users take limited advantage of the available capabilities and seldom, if ever, leverage the decision support and innovation aspects of gathered information. This is the worst usage of technology.

This represents a transformation from the popular mode of information production where users are responsible for using it, to a mode where IT is responsible for information usage and is measured by its impact.

New technologies change the foundations of existing companies and give birth to fresh ones. Markets and industries undergo fundamental transformations due to technological advances. Many argue that the changes driven by modern IT are no different than other innovative ideas that transformed the world, such as railroads to aviation and the telegraph to cellular phones. From their origins as tools for a competitive advantage, these technologies quickly dissolved into invisible commodities, thus losing their ability to provide that advantage.

To keep up with IT's changing role, IT professionals must continually adapt their core value proposition to the mainstream business agenda. If they do not adapt, IT professionals risk becoming commoditized.

Merely managing the corporate network is not a way to provide growth through innovation. It is a cost of doing business just like other basic requirements such as buildings and utilities. As such, it is destined to remain a non-core position. By changing the perception that they are managers of tools and infrastructure to the idea that they are "sellers" of information, IT professionals can change the view of who they are and what they do in the organization.

Lior Arussy is the president of Strativity Group, a customer experience research and consulting firm. Arussy is the author of several books including his new book Innovating IT: Transforming IT from Cost Crunchers to Growth Drivers (John Wiley & Sons, 2004), available exclusively at www.amazon.com/innovatingIT.

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