At Ingage Partners, we view technology as a critical functional element to any business’ operations. Unfortunately, we still work with clients that have their IT capabilities “siloed” away from other departments. When technology and core business functions are treated as separate organizations, a business potentially diminishes the practical benefits of technology. If they are combined as one entity, there is a much greater chance that the business will achieve its aligned objectives more effectively.
I recently worked with a mid-sized business client (~$500M annual sales) to identify functional requirements for a new system for processing orders and issuing payments to vendors. The client was replacing a homegrown legacy system that had been in use for almost 20 years. Working with the various teams that used this system daily, it became apparent that neither the users nor the IT team understood the business rules behind the system’s transactions. Two big problems resulted from this situation:
1) The primary users of the legacy system had to spend significant amounts of time daily leveraging workarounds to make the system function;
2) It took multiple working sessions with a broad cross-functional team to identify and start documenting business rules and requirements for the new system.
The “separate” relationship between the business unit and IT at this client led directly to ongoing decreased productivity and incremental work necessary to prepare a new system for launch in the business. Unfortunately, this situation is far too common. Many businesses view IT primarily as the department that ensures associates have laptops and that the network is running. These are important functions, obviously, but perhaps not the most valuable contributions technology can make.
Technology has the ability to enhance virtually all business functions. Businesses owe it to themselves to have well-defined objectives for each function related to technology. Objectives should be tied to Key Business Results (sometimes referred to as OKRs), with rigorous ROI estimates for each objective. This allows businesses to efficiently rank-order potential projects and to budget accordingly. This process is not a one-time event. Rather, it should become an integral part of the business planning cycle…in whatever form that takes in a business.
Once a project is approved, both the IT department and the functional business owner of the project should be held accountable for its successful completion/implementation. This joint accountability ensures that both parts of the organization are “in the boat together” for the project. This aspect may be a significantly different operating paradigm for some businesses but should be insisted upon. Operating “separately” can create opportunities to point fingers and cast blame if a project fails. While strong leadership can overcome this, it becomes much easier if the project team operates as one group with the same mission. Bottom line, it works!
When fully integrated into core business processes, technology can provide a wide range of benefits, including increased productivity, improved transparency, data accuracy, improved employee experience, enhanced compliance, and much more. Achieving that level of integration takes effort and potentially a lot of internal Change Management. The benefits of doing so, however, are well worth the effort. In addition to the practical benefits, an equally important outcome of having IT and core business functions operating together is that it provides the opportunity for associates to build real relationships with a common goal, leading to greater success.