Last month I wrote about IT's need to shift from a production-centric culture to a service-centric one. IT organizations that don't make the switch risk losing the support of business units, which have a growing number of production-centric IT choices available to them, including outsourcing, managed services and easy-to-use technology options like software-as-a-service.
My post was prompted by an ebizQ peice written by IT consultant Janne Korhonen, who helpfully provided a list of key differences between production-centric IT and service-centric IT. Example: Cost containment and stability are drivers of production-centric IT, while service-centric IT focuses on value creation and agility.
I touched upon a similar theme about a month before that, sharing Outside the Box blogger Todd Biske's belief that IT must transform itself from a service provider to a trusted adviser. He used the analogy of a broker, who simply carries out requests to buy stocks at a given price, vs. a financial adviser who helps people figure out which investments will provide desired outcomes over the long haul.
Both of those posts emphasized the need for IT to better serve its internal business customers. And that's what most business and IT leaders surveyed by Diamond Management & Technology Consultants see as IT's primary function. Writing on CIO Dashboard, Chris Curran points out that three-quarters of respondents said the CIO's primary innovation role was to improve business processes (50 percent) or IT processes (25 percent). Far fewer respondents said the CIO's role was to create innovation designed to improve customer service, reach new customers or create new products/services.
I don't know how the survey questions were framed. But it occurs to me there's a pretty direct connection between internal process improvements and customer-facing activities. Process improvement in the call center or the billing department will lead to better service and happier customers. Making it easier to collect, store and analyze data may result in insights used to create new products/services or to craft marketing campaigns designed to attract new customers.
Still, as Curran notes, many CIOs would like a more direct role in generating business ideas. He writes:
Most of the conversations I have with CIOs are, however, about how to bring new technology-fueled business ideas to the table. Are these desires just wishful thinking or are they really in-line with the role the CEO and business leaders want IT to take on? I don't know the answer but I suspect that the explicit conversation on IT's role in innovation doesn't happen too often.
I suspect Curran is right about the explicit conversations. Too often I think IT executives wait for cues from business leaders, cues they may or may not get. When I interviewed Jeanne Ross, director of the Center for Information Systems Research (CISR) at MIT and co-author with Peter Weill of "IT Savvy," she told me IT folks tend to broadly defer to the business on process, since they assume (often wrongly) business folks are the real process experts.
Andy Blumenthal, chief technology officer at the Bureau of Alcohol, Tobacco, Firearms and Explosives, made a similar point on his User-Centric Enterprise Architecture blog. In talking to peers at a conference, he found many defer to their business colleagues on broad organizational issues. This is a mistake, he writes, because many people "do not have a 'definitive vision' or know concretely what they want, especially when it comes to how technology can shape the business." His suggestion: IT should seek a more collaborative role with the business, in which the two sides together discuss organizational problems and strategies and come up with feasible solutions.
CIOs who do this may be able to come up with innovative ideas like one suggested by Rick Rhodes, chief deputy for information technologies in the Tax Collector's Office of Polk County, Fla., and one of the executives I had the pleasure of meeting at the Midmarket CIO Forum in Orlando earlier this week. He told me his IT organization is pretty far along the path of hiring itself out to the city of Lakeland, Fla., (and possibly other municipalities) to serve as a lockbox for utility payments.
His organization has the expertise, as well as check processing equipment that's used for perhaps 10 of every 24 hours. So Rhodes proposed tapping the excess processing capacity and his group's expertise to generate additional revenue for the Tax Collector's Office. It's a great example of an IT executive taking the lead and coming up with a new revenue-generating service.