Business-IT relationship
It is an indispensable binomial in any company. The protagonist couple of many meetings, projects, and documents. And like any couple, their relationship is not always idyllic. In their day to day, they must deal with several and important challenges. Six challenges are described below, accompanied by six solutions.
Challenges of the business-IT relationship
- Lack of focus: Sometimes IT does not have a clear strategy aligned with the business and this prevents IT from focusing on the strategic projects of the company. There are more and more projects and, as if that were not enough, existing projects never end up being closed because their scope grows on the fly. There is also an increase in the budget, which ends up moving too far from its initial figures.
Not all companies transparently define their short-term (say three-year) business strategy, but IT needs it to develop its roadmap. In the end, what is not put in writing is not done. If the business does not set its three-year goals, neither IT nor any other department in the company can align with them. It is not enough for the business to have a strategy in its head; the business must document it for the benefit of the rest of the departments of the company, including IT.
- Poor relationships: It is difficult for IT to maintain a close relationship not only with the executive committee but also with those people responsible for the other administrative areas. However, digital transformation projects are cross-cutting and affect all departments (Operations, HR, Finance, Procurement), which involves making efforts to nurture relationships across the company, not just with top management.
- Business value: It is hard for IT to demonstrate how digital projects can translate into hard cash for the business. IT must work out how to convert project deliverables into real money. If IT develops a project for the sales department, the impact will be obvious, but if it is, for example, a process automation project, the impact on the P&L account is not as tangible or clear.
- Lack of human resources: Technological talent does not abound and there is a high turnover within any workforce, since salaries are very competitive in the sector, and it is easy for competitors to take the best talent. Therefore, it is not easy to maintain IT teams.
- Outsourcing abuse: Within IT, there is a clear tendency towards outsourcing several services that are key to the business. However, it is important to maintain the key knowledge, the “crown jewels”, in-house. If IT outsources the development of an application, but the project manager from the external vendor leaves the company, the business will be left stranded with an application that does not know how to maintain.
- Time mismatches: IT projects consist of several phases: Ideation, kick-off, planning, implementation, handover, and operations (run-the-business or RTB). Today, IT departments tend to spend little time on project ideation and operations.
That must change because the business only sees benefits when IT prepares the handover of the project to any other department and during operations, that is, in the final phase, but not before. This is detrimental to IT because it brings fewer benefits. If IT devotes little time to ideation and then changes arise during later stages, it is more difficult to go back and redo the work.
Solutions
The good thing is that all this has a solution if IT devotes the time and resources needed. A solution is proposed below following the order of the challenges listed above.
- IT involvement: The person responsible for IT must be part of the executive committee of the company. This can really help achieve business objectives and results. There are many companies in which IT reports to other functions, for example, Finance, and this does not add value to projects with greater impact.
It is one more hierarchical layer that hinders processes. Those companies that want to tackle digital transformation successfully must integrate IT into the executive committee.
- Cross-cutting teams: Project teams must be cross-cutting and multidisciplinary and integrate people from all areas involved. This means that, even if someone belongs to the Finance department, in some project they can play a different role.
For example, they can act as an analyst and study the areas in which the project can cause problems for Finance. It is about not sticking to the job description, which enhances creativity and ensures project success.
- Monetization: The key is to establish a clear relationship between the project and the economic benefits it will generate. To do this, it is critical to find a way to translate, for example, process automation into saved or unworked hours. It is easy to calculate the value of one hour of work and multiply. Similarly, when new hires are reduced, it is simple to calculate the hires that are avoided.
In particular, the business must be aware of what artificial intelligence can bring in relation to costs. For example, state-of-the-art machine translation engines reduce personnel costs by increasing translator productivity, as well as the cost of outsourcing requests to translation agencies.
- Talent retention: The success factor is to offer interesting projects. When IT is unclear about what it has to deliver, teams are frustrated because goals change, and days of work are lost. However, if IT has a strategy with 90% of well-defined and aligned projects, it is easy to find the people who want to develop them. And IT knows the skills it needs.
If IT teams adopt the Agile methodology, they are more productive and more satisfied because they focus on attaining objectives, even if they are not clearly related to their job description. Team members can perform varied and stimulating tasks.
- Insourcing: IT departments must try to identify what is important to them and should not be outsourced. Scales should be tipped in favor of value rather than operating costs.
- Time adjustment: IT teams need to spend more time on the ideation phase and move projects forward. This is in line with the Agile approach, whereby the business can start seeing benefits sooner. The big difference is that, with the Agile methodology, the business already perceives benefits in the middle of the project, during the implementation, because the Agile approach requires delivering an MVP or minimum viable product. If IT spends more time designing multiple scenarios and covering all contingencies, it can shorten subsequent phases and better design operations.