Every modern company should have an IT department. Every company should have a smoothly running IT department that adds value to everything the company does. I’m betting that most companies have about 50% of what they need – they’ve got an IT department. What’s missing is a way to transform that IT department in to a savvy IT department. For that matter, what does a savvy IT department look like anyway?
What Do Savvy IT Departments Do?
If the key to the success for an IT department is for it to become “savvy”, then we’re going to need some help here to find out just exactly what that means. The good news is that Dr. Peter Weill up at MIT has just written a book called IT Savvy: What Top Executives Must Know to Go from Pain to Gain. What he says is that a savvy IT department is one that knows how to transform information technology into a strategic asset that the company can use to compete better.
You might be saying to yourself “Isn’t this obvious?” However, it turns out that most IT departments aren’t run this way. Instead they operate in silos, they move slowly, and require lots of funding to just keep their heads above water.
This stands in stark contrast to what Dr. Weill says that savvy IT departments do. He says that they spend the bulk of their time standardizing and digitizing a company’s core processes. What they learn from doing this shows them the way to the next set of projects that they need to be working on.
Once a savvy IT department has been able to create a digital platform that can be used to run the company, the next step is to reach out. This means that they look for ways to digitally interface and connect with other companies and vendors.
Look, change in any form is both difficult and painful. Sure your IT department might not be the most savvy one out there, but does it really matter? Well, yes it does. It turns out that savvy IT departments have been found to be 21% more profitable than non savvy ones.
If that wasn’t enough, it turns out that savvy IT departments also move faster. They are able to get new products and services to market quicker and to produce add-ons to existing solutions.
The reason that they are able to do this is because of what they’ve already done. Dr. Weill calls this the “agility paradox” – once you’ve digitized and standardized your core business processes, then the company will be faster to market and in the end will end up getting more revenue from the new products that they introduce.
It’s All About IT Insights
Savvy IT departments have the ability to look at all of a company’s business processes and determine which ones should be shared across the business (and which ones should not be). Once this decision has been made, integration can occur.
Integration is when IT works to provide access to company data across the company and finds way to standardize the flow of information in order to reduce or eliminate variations in business processes.
Savvy IT departments have this ability. They can make a decision about which processes to integrate and stick with it. That’s what makes them savvy.
What All Of This Means For You
Every IT department has a choice to make: are they a loner or part of the company’s team? In order to be part of the company team, each IT department needs to become a savvy IT department.
In order for your IT department to become a savvy IT department they have to focus on what really counts. This means looking at the firm’s business processes and picking the ones that matter the most. Then those processes need to be standardized and digitized so that the information can be shared across the company.
The secret to becoming a savvy IT company is to stop doing each IT project as a one-off. Instead, each project needs to be viewed as one that has links to the projects that were done before. In this way your IT department can create a reusable platform for the entire company to use and they will have become a savvy IT department.
Question For You: Who do you think is in the best position to decide what the company’s IT platform should look like / incorporate?
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What We’ll Be Talking About Next Time
Darn that 80/20 rule. CIOs realize that they are spending way too much money just keeping the IT systems that they’ve already deployed up and running. If only this task didn’t cost so much: then they could spend that money on bold new initiatives that would benefit the entire company. One of the most expensive parts of any company’s IT infrastructure is all of those desktop systems that every employee is using. Hmm, maybe there’s something that we can do about those…