Without technology, you wouldn’t have a business. And yet, information technology staffs often do not have an integrated view of how technology enables their company to make money.
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Getting that knowledge and providing it to your staff should be a priority, says Todd Davis, vice president of property systems development and administration for Choice Hotels International, the franchiser of such brands as Comfort Inn, Clarion and Econolodge. When your staff knows where the money comes from and where it goes, they are better able to see opportunities to differentiate the company from the competition.
While it’s true that some IT departments are content in playing the traditional role of service provider, the majority needs to play a larger role in facilitating corporate innovation and growth, says Chris Potts, director of the IT consultancy Dominic Barrow
The key, says Potts, is to get beyond mere IT-business alignment—which implies that IT and the business are separate entities. Instead, IT leaders advise, shoot for a higher degree of IT-business integration through which IT is embedded in business decisions.
To accomplish that integration, everyone in IT has to learn how the business makes money and how to use that information to generate new innovations and revenue opportunities. Doing so helps you to increase IT’s value to the organization. Here are three ways to make that happen.
Think Like a CEO and a CFO
At the top of every CEO’s and CFO’s mind is the fact that for every dollar coming in the front door, a portion is going out the back in the form of costs. Studying that equation can help you discover ways to save and generate revenue.
Potts also advises thinking ahead. For example, only a few hotel chains offer free wireless broadband, but that’s unlikely be a differentiator in three to five years. Ask yourself not just how IT contributes to today’s business model, but how that will change in the future.
Choice Hotels’ Davis makes a point to focus on the importance of the bottom line by bringing in the finance group to talk with his team about how the company earns revenue, where the profit goes and where excess cash may be invested. Such information “helps focus employees’ thought processes around innovation,” he says.
“If you understand areas where we’re growing in, you can potentially come up with new ideas or different ways to do things that will bring a competitive advantage,” he says. These ideas may range from a function on a website to improvements in customer service to changes in internal processes.
Finance education—along with a job-shadowing program that created opportunities for the IT team to observe the interaction between hotel systems, the front desk associates and hotel guests—helped the company get incremental revenue from members of its Choice Privileges loyalty program. Front desk system enhancements improved recognition of Choice Privileges members, who are offered such promotions as the fall special, “Stay 2 times. Earn a free night.” Efforts such as these help drive loyalty and increase stays at Choice-franchised hotels.
Connect IT and Business Operations
At Accenture, all new employees—from entry level to seasoned pros—get extensive orientations to learn about Accenture’s mission, priorities and its business practices. They also learn how IT is organized and run, as well as the ways IT interacts with the business to understand its needs and priorities and then translates these into IT initiatives
The corporate orientation is reinforced periodically through memos from Accenture leaders and executive blogs. Employees are also encouraged to listen to quarterly investor calls which discuss the company’s performance and key plans, as well as attend periodic companywide meetings that cover Accenture’s strategy and competitive position.
Robert Kress, Accenture’s senior director of business operations (who reports to CIO Frank Modruson), says these meetings are crucial for his IT team because they provide context for what is happening within Accenture. Such deep understanding of what makes the business tick has led to money- and time-saving innovations, including one recent project to improve personnel scheduling.
Finding the right people for each engagement at the right time is critical for Accenture’s consultancy business. But this was a problem area: Kress knew, from the data he collected about the total cost of ownership for every application, that he was spending too much on the existing scheduling application. Internal surveys told him end users were unhappy with it. One criticism: “The application was not as intuitive as our customers wanted,” Kress says.
Kress’s group worked closely with HR to develop the new personnel scheduling system, which reduced the time it took to make assignments by one-third. The new process also costs 50 percent less to run. “The fact that we understood key metrics, such as the time it takes to get people scheduled, enabled us to provide innovations,” he says.
The job-shadowing program at Choice Hotels provides hands-on, cross-functional internships to employees throughout the company. The company’s organizational development and learning department enables any corporate group to create a job-shadowing opportunity. Employees can also request that an opportunity be created or accept an opening that is already available. Despite the word shadowing, “this is not just watching someone do their job; these are interactive experiences,” says Davis.
For the duration of the assignment, employees do the work of a front desk or marketing employee, for example. And so, a software developer who is working on an application can get a firsthand understanding of how his application will be used and how it might be improved.
Software development teams bring the knowledge gained through job-shadowing back into the software development cycle, where it sparks ideas on, for instance, how to improve user interfaces for a more streamlined business process flow.
Map IT Functions to Business Processes
When Sreelakshmi Kolli took the job of director of global IT operations for Align Technology two years ago, she was often awakened at night because system administrators could not understand what they should be looking for to fix a user’s problem.
The company, which makes Invisalign clear braces, relies heavily on IT to produce its products; customer-facing applications are tightly integrated with the ERP and manufacturing systems. But the help desk didn’t understand how all of the systems and manufacturing machines were integrated to scan and manufacture a 3D dental impression—a highly intricate process.
If a business user called with a scanning problem, the help desk didn’t necessarily know which part of the process was not working. The same would be true for the system administrator who would see working machines, but no problem with a file transfer application being able to find the right file.
Kolli decided that the solution to better IT support and a good night’s sleep lay in fostering a more integrated view of business processes and IT operations. To start, she sent many of her employees out to the manufacturing sites to learn about the equipment and systems they were servicing from the user’s point of view. But she also wanted to document that business-centric view.
To do this, she had her staff map out the company’s business processes to each application and the machines they run on and show how each connected to the others. The map is a powerful illustration of how the employees who create and service each system contribute to Align’s top line. It also works as a tool to show which systems impact revenue the most and which processes needed infrastructure improvements. Today, the map is used as a training tool for new employees in IT to help understand high-level business process and systems flow.
Kolli, who is currently the director of business performance improvement at Align, now spends her days looking for constraints in the company’s end-to-end business processes in order to create improvements.
“Understanding the relationship between how the business makes money and the work we do everyday helps the engineers appreciate the purpose behind their jobs and have a perspective and an appreciation of the business users’ requests,” says Kolli. “This in turn helps us create better partnerships with the business users.”