Recent developments in information technology (IT) are having profound impacts on all areas of economic activity, creating new opportunities as well as risks for organizations of all types and major paradigm shifts that firms need to adapt to if they are to survive in the increasingly competitive environment.
As a result, the IT function is becoming a key enabler and critical success factor in the achievement of core business goals, but research evidence indicates that relatively few organizations are successfully employing IT in this way. The ability to do so often requires extensive changes to conventional ways of thinking, operations in many business areas, and even in the very structure of the organization itself. Like other major organizational change initiatives, this can be difficult to achieve and there are typically high rates of failure.
Recent major trends in IT include the business use of social media, Big Data, the Internet of Everything (IoE) and Cloud/Everything as a Service (EaaS). In the context of these types of developments, three best practice models for adapting to IT in the current environment can be identified: Strategic IT, the “relationship capital” approach, and the “Art and Science of Transformation®” framework.
A number of critical success factors arise from these models, including: a good awareness and understanding of developments in IT among senior organizational leaders, effective governance mechanisms for aligning IT with the strategic planning system, relationship building as a central focus of business strategy, and an organizational culture that supports new ways of working in the IT enabled environment, with an emphasis on employee empowerment, teamwork, collaboration, and trust.
An Art and Science of Transformation® approach is important to ensure that organizations can achieve the critical success factors and secure the benefits of IT in improving business performance. Assessing cultural change readiness as well as the art- and science-related skills and competencies of employees is an important first step in identifying what needs to be done to realign all aspects of the organization with its IT strategy and goals.
The Changing Role of IT
Recent developments related to, or facilitated by information technology (IT) are having profound impacts on all areas of economic activity, creating new opportunities as well as risks for organizations of all types and major paradigm shifts that firms need to understand and take on board if they are to survive in the increasingly competitive environment.
As a result, the IT function is becoming a key enabler and critical success factor in the achievement of core business goals, but research evidence indicates that relatively few organizations are successfully employing IT in this way. The ability to do so often requires extensive changes to conventional ways of thinking, operations in many business areas, and even in the very structure of the organization itself. Like other major organizational change initiatives, this can be difficult to achieve and there are typically high rates of failure.
Key Developments in IT
Social Media: The massive growth in use of social media means that organizations of all types now need to build a positive image and active presence online and interact via these channels with clients, customers and the general public. Social media also facilitates collaboration within and between organizations by providing easy access to information regardless of a user’s location or the devices they are using.
Big Data: The widespread use of mobile devices and social networks has resulted in a massive increase in data that firms need to capture and make sense of. This digital data has been expanding in complexity as well as volume; a high proportion is unstructured.
Internet of Everything (IoE): IT connectivity and intelligence are increasingly being added to almost every type of everyday object and device; a trend facilitated by the convergence of wireless technologies, micro-electromechanical systems and the Internet.
Cloud/Everything as a Service: Everything as a Service (EaaS or XaaS) is a further development of the software-as-a-service (SaaS) trend of recent years, in which organizations have increasingly outsourced their data storage to vendors offering “cloud”-based services. In the emerging EaaS trend, the cloud is used to provide not just software services but also hardware, processing, and various data and information management services.
Best Practice Models for Adapting to Trends in IT
Strategic IT: In forward looking organizations, the IT function is no longer regarded as a non-core, support area of the business, but as a strategic function that is crucial for the achievement of business goals and is closely integrated with core business planning. Strategic IT involves IT managers and organizational leaders working together to identify and pursue new business opportunities or to realign their current business model in order to remain competitive or effective. For this approach to be effective, oversight of IT must become a top-level governance responsibility and new competencies are required of those in IT positions, at leadership level and in more technical or analytical roles.
The “Relationship Capital” Approach: The ability of organizations to use IT as a key business “enabler” also requires them to develop the types of authentic business relationships that generate value in the form of “relationship capital”. Advances in IT have facilitated and driven the adoption of networked, business structures that enable firms to achieve a competitive advantage through collaborations that generate value and reduce costs.
The “Art and Science of Transformation®”: This model was developed by SSI to address the growing evidence that organizational change requires a holistic, transformational approach incorporating both “art” and “science”. In the framework, we define “science” as the formal tools, techniques and methods employed in project management and implementing new IT systems. In contrast, we define “art” as the softer skills needed to influence and manage the attitudes and behaviours of people, as well as intangible attributes such as “business acumen” that are especially important in strategic approaches to information technology use. The model also acknowledges that an organization’s human resources, culture, systems and processes are closely interrelated. This means that a holistic approach to transformation is essential to remove any barriers to success and ensure that all these organizational components are properly aligned with the desired business strategy or goal, such as a new approach to IT.
Critical Success Factors
Based on the three best practice models identified above, the following critical success factors can be identified for adaptation to developments in IT:
- The organization has clearly defined its fundamental purpose and has clear goals for achieving this.
- Organizational leaders have a good awareness of IT-related trends and developments and are able to identify how these can help them achieve their core business goals.
- Organizational leaders are open to considering new business models or opportunities that enable them to capitalize on changes and trends in the wider IT environment.
- The CIO and other senior IT personnel have good levels of business acumen and are able to identify and communicate the strategic benefits of IT-related initiatives.
- There are effective governance mechanisms for aligning IT with the strategic planning system and with business units.
- IT plays an integrative and facilitating role in the organization.
- The business impacts of IT initiatives are continuously monitored, measured and refined.
- Relationship building is a central focus of business strategy and receives appropriate commitment and resources.
- Organizational leaders actively seek collaboration opportunities and are able to assess the suitability of potential partners taking into account “soft” criteria.
- IT and other organizational systems, such as HR management systems are deliberately designed to facilitate collaborative working and knowledge sharing.
- An effective social media strategy is used to positively manage the organization’s online presence and its interactions with customers or clients.
- When implementing IT-related initiatives, the organization achieves the right balance of “science”, such as technological know-how and project planning/management expertise, and “art”, such as effective leadership and cultural realignment.
- The organizational culture is supportive of the new ways of doing business in the IT enabled environment, with an emphasis on empowerment of employees, teamwork, collaboration, and trust.
- There is a strong emphasis on the importance of people in the transformation process: this includes ensuring that the organization has the “right” human resources to support the IT strategy and initiatives, and a focus on involving and engaging all organizational stakeholders in the transformation.
- Assessing Organizational Readiness for Developments in IT
An Art and Science of Transformation® approach is important to ensure that organizations can achieve the critical success factors and secure the benefits of IT in improving business performance. Adopting a strategic, relationship-focused approach to IT requires changes in organizational systems, processes, cultures, and human resources. Employee attitudes and behaviours, which are strongly influenced by organizational cultures are often the greatest barrier to change. Assessing cultural change readiness as well as the art- and science-related skills and competencies of employees is an important first step in identifying what needs to be done to realign all aspects of the organization with its IT strategy and goals.