When viewing the business as customer is not enough

To regard the business as a customer — the customer — of the IT department is a sensible practice, with one exception: handling the strategic aspects of information technology requires an approach and attitude beyond what is generally recognized in IT as serving the needs of the business.

The conception and advancement of the specific business applications of IT that would further or enhance business strategies is in essence the role of business IT innovation. IT strategy processes, however, typically fall short of fulfilling that role. One of the reasons is that they tend to focus prematurely and narrowly on catering to the needs of IT customers: individual business-unit and functional-area managers and end users.

Effective business IT innovation requires a clear mandate to identify and pursue those IT investments that strengthen and enable a competitive advantage or ensure, at a minimum, competitive parity. It is a mandate that can originate in only one place: the CEO’s office.

Without this mandate, there is a lack of authority and ownership of that crucial inception and incubation process that leads to recommendations for optimal and strategy-consistent IT investments. It is not the role of the IT investment steering committee to engage in preliminary assessments that might lead to winning IT-based initiatives. At the same time, individual project sponsors tend to be too narrowly focused on their immediate business demands to ensure that their IT requests are indeed the best options to support, complement, or inspire overall strategy and differentiation.

Rather than viewing the entire business organization as a vague customer, in the context of business IT innovation, the board of directors (and, by extension, shareholders), the CEO, and the IT investment steering committee are the only significant customers to whom the leader of this function should be accountable. In all other cases, partnership and equality, not a customer-supplier dynamic, should drive the relationships.

To be sure, once the IT investment is approved and initiated, the circle of customers grows substantially, now including business sponsors, stakeholders, and individual end users. But although business IT innovation will draw upon input from the entire organization, its focus, unlike that of many other IT functions and activities, is not exactly to serve the business community. It is to serve the strategic and competitive needs of the organization. The distinction may seem subtle, yet, I believe, it is significant.

It is by taking the customer-centric approach to IT investment options — by doing what the business asks IT to do — that IT organizations end up with projects that only later are inventoried to determine whether they are aligned with business strategy. Having a business sponsor on board does not automatically validate the IT project from the business strategy perspective. At a minimum, there are opportunity costs to consider: would a different, perhaps as-yet-unidentified IT investment better serve the strategic and competitive needs of the organization?

The purpose of formulating business strategy is rarely described as that of satisfying the needs of individual internal business constituencies. So, too, the purpose of business IT innovation is to meet broader business needs of competitiveness and differentiation — to a large degree by looking outside the organization rather than focusing inwardly. Regardless of which functional area is responsible for business IT innovation, both business and IT should view it as the customer of their insights and ideas, not the other way around.

— Helen Pukszta, Senior Consultant, Cutter Consortium

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Jim Love, Chief Content Officer, IT World Canada

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