Posts Tagged ‘business processes’

CIOs Know That Analytics Are What Future Competition Is All About

Wednesday, April 20th, 2011
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CIOs Are Learning That Number Crunching Is Critical To Their Company's Success

CIOs Are Learning That Number Crunching Is Critical To Their Company's Success

Companies are all asking themselves one question: what’s it going to take to be successful? It turns out that a lot of the techniques that worked in the past won’t work anymore – lowering prices, etc. Going forward, the only thing that a modern company can complete on is their business processes. It turns out that the CIO plays a very big role in making a company’s processes the best that they can be…

Say Hello To The New Killer App: Analytics

Dr. Thomas Davenport has spent time studying how firms compete. What he has discovered is that the most successful companies have started to use analytics to move ahead of the pack.

Unlike in the past, these successful firms are using analytics across the entire firm – not just in one area. In order to do this, their IT departments are being asked to play a role that they’ve never had to do before. CIOs that are going to be successful in the future have got to understand what is going to be asked of them so that they can provide the company with the analytics support that it’s going to need.

The new use of analytics requires that the IT department be able to support the modeling and optimization that the firm will be doing. This requires building very large warehouses of data and then using it to dive deeper than just calculating average order size or average revenue per employee. Instead, now firms are going to want to know things like who their most profitable customer is, who has the most long-term profit potential, and who is most likely to cancel their account.

4 Sources Of Analytics Success

So what does a CIO need to do in order to create an IT department that will be able to support the company’s growing need for the answers that only analytics can produce? Simple, there are four steps that every CIO must take:

  • Focus On The Right Areas: analytics can be applied to a number of different areas of any company’s operations. However, the CIO needs to ensure that the company directs its analytics focus in the area that will yield the greatest reward for the company. This means picking between focusing on the company’s supply chain, its customer selection / loyalty / service, pricing, human resources, etc.

  • Hire The Right People: The IT department is going to have to reshape itself in order to provide the company with the analytical talent that it is going to need. This means that the CIO is going to have to work with the human resource department in order to teach them what kind of analytical talent you are looking for. Additionally, the staff that you hire need to not only be able to crunch numbers, but they also have to be able to clearly communicate to the rest of the company how they do their work and what the results mean.

  • Create The Right Culture: as the company evolves to use analytics to drive its business, the company’s culture is going to have to change also. This means that there will have to be a new respect for the processes of modeling, testing, and evaluating results that are produced by qualitative analysis. The IT department and the rest of the company will have to learn to make decisions based on facts, not gut feels.

  • Build The Right Technology: As much as having the right technology means having enough computing horsepower to process all of the data that needs to be crunched in a reasonable amount of time, it means more. It has a lot to do with having the right technology that will be needed to store and process the mountains of data that will be needed to feed the analytics engines that the company will now be running both day and night.

    • What All Of This Means For You

    CIOs will play a significant role in their company’s success going forward. Optimizing business process through the use of analytics is going to be required by every company and the IT department is going to be responsible for supporting these analytics staff and tools.

    The company is going to have to change the way that they do business in order to take advantage of the new analytics. These changes are going to impact the company’s focus, its culture, its staff, and its technology.

    The CIO will be required to restructure the IT department. The new focus will be on processing the large quantities of information that have been collected and creating results. CIOs who are able to understand the changes that will be required and implement them will be the ones that will lead their companies to success.

    - Dr. Jim Anderson
    Blue Elephant Consulting –
    Your Source For Real World IT Department Leadership Skills™

    Question For You: Do you think that the analytics experts should be part of the IT department or should they be somewhere else?

    Click here to get automatic updates when The Accidental Successful CIO Blog is updated.
    P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

    What We’ll Be Talking About Next Time

    It turns out that there are 3 different reasons why a CIO can end up making a bad decision. We’re going to take a look at each of these hidden decision making traps and show you how to identify them and, even more importantly, how to avoid them…

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    Posted in analytics | 2 Comments »

    IT Savvy: What Does It Mean And Do You Have It?

    Wednesday, December 1st, 2010
    Image Credit Done Right, The IT Department Can Be A Strong Link In The Company's Chain…

    Done Right, The IT Department Can Be A Strong Link In The Company's Chain…

    Every modern company should have an IT department. Every company should have a smoothly running IT department that adds value to everything the company does. I’m betting that most companies have about 50% of what they need – they’ve got an IT department. What’s missing is a way to transform that IT department in to a savvy IT department. For that matter, what does a savvy IT department look like anyway?

    What Do Savvy IT Departments Do?

    If the key to the success for an IT department is for it to become “savvy”, then we’re going to need some help here to find out just exactly what that means. The good news is that Dr. Peter Weill up at MIT has just written a book called IT Savvy: What Top Executives Must Know to Go from Pain to Gain. What he says is that a savvy IT department is one that knows how to transform information technology into a strategic asset that the company can use to compete better.

    You might be saying to yourself “Isn’t this obvious?” However, it turns out that most IT departments aren’t run this way. Instead they operate in silos, they move slowly, and require lots of funding to just keep their heads above water.

    This stands in stark contrast to what Dr. Weill says that savvy IT departments do. He says that they spend the bulk of their time standardizing and digitizing a company’s core processes. What they learn from doing this shows them the way to the next set of projects that they need to be working on.

    Once a savvy IT department has been able to create a digital platform that can be used to run the company, the next step is to reach out. This means that they look for ways to digitally interface and connect with other companies and vendors.

    Why Change?

    Look, change in any form is both difficult and painful. Sure your IT department might not be the most savvy one out there, but does it really matter? Well, yes it does. It turns out that savvy IT departments have been found to be 21% more profitable than non savvy ones.

    If that wasn’t enough, it turns out that savvy IT departments also move faster. They are able to get new products and services to market quicker and to produce add-ons to existing solutions.

    The reason that they are able to do this is because of what they’ve already done. Dr. Weill calls this the “agility paradox” – once you’ve digitized and standardized your core business processes, then the company will be faster to market and in the end will end up getting more revenue from the new products that they introduce.

    It’s All About IT Insights

    Savvy IT departments have the ability to look at all of a company’s business processes and determine which ones should be shared across the business (and which ones should not be). Once this decision has been made, integration can occur.

    Integration is when IT works to provide access to company data across the company and finds way to standardize the flow of information in order to reduce or eliminate variations in business processes.

    Savvy IT departments have this ability. They can make a decision about which processes to integrate and stick with it. That’s what makes them savvy.

    What All Of This Means For You

    Every IT department has a choice to make: are they a loner or part of the company’s team? In order to be part of the company team, each IT department needs to become a savvy IT department.

    In order for your IT department to become a savvy IT department they have to focus on what really counts. This means looking at the firm’s business processes and picking the ones that matter the most. Then those processes need to be standardized and digitized so that the information can be shared across the company.

    The secret to becoming a savvy IT company is to stop doing each IT project as a one-off. Instead, each project needs to be viewed as one that has links to the projects that were done before. In this way your IT department can create a reusable platform for the entire company to use and they will have become a savvy IT department.

    - Dr. Jim Anderson
    Blue Elephant Consulting –
    Your Source For Real World IT Department Leadership Skills™

    Question For You: Who do you think is in the best position to decide what the company’s IT platform should look like / incorporate?

    Click here to get automatic updates when The Accidental Successful CIO Blog is updated.
    P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

    What We’ll Be Talking About Next Time

    Darn that 80/20 rule. CIOs realize that they are spending way too much money just keeping the IT systems that they’ve already deployed up and running. If only this task didn’t cost so much: then they could spend that money on bold new initiatives that would benefit the entire company. One of the most expensive parts of any company’s IT infrastructure is all of those desktop systems that every employee is using. Hmm, maybe there’s something that we can do about those…

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    Posted in business processes | 1 Comment »

    Just Exactly What Did The Big CIOs Do Last Year?

    Wednesday, March 17th, 2010
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    What A CIO Can Accomplish In A Year Just Might Surprise You…

    What A CIO Can Accomplish In A Year Just Might Surprise You…

    It Was A Tough Year

    To say that last year was a rough year, might be the understatement of the decade. Every business seemed to be taking it on the nose and anytime you opened the paper or turned on the TV, it just seemed as though the bad news kept on coming. What’s interesting for all of you who dream of someday becoming a CIO, is that the best CIOs didn’t allow all of the bad news to discourage them – they still made progress…

    Yes, I believe that we all know what the right thing to do is. However, sticking to our guns when it seems like the rest of the world is falling apart all around us is what separates the good CIOs from the not-so-good ones. What does it take to keep moving forward? Most of the best CIOs all agree that even in bad times an IT department should be an externally directed force that is focused on growth, customers, and creating market-facing leadership

    The Best CIOs Still Made Progress

    Amazingly enough, a global recession can be good for business. It shakes out the weaker companies and primes customers to start buying again once things pick up again. Bob Evans has been talking with some of the CIOs for the biggest global firms and he’s found out that they’ve been quite busy, despite the global recession. Here are some examples:

    • Liu Zhixuan, CIO of China’s Shenzhen Airlines: Liu has been working on what he calls a “service-chain integration” project for the airline. Once it’s in place, this IT solution will offer an end-to-end view of not just the airline’s business processes but it will also allow customers to be segmented. As an additional value to the airline, this project will automatically reset the outcomes of some of business processes based on a customer’s status.
    • Kim Tac Keuk, CIO of LG Electronics: : Since my current cell phone is made by LG, I’m always interested in what they are up to. During the past year Kim has lead their efforts to implement a global single-instance Oracle ERP system. Anyone who has been involved in one of these projects knows what a bear they can be even when they aren’t global in nature. This project started off by requiring an 18-month effort to map, integrate, and optimize 440 business processes across LG’s 83 subsidiaries. What I liked best about this accomplishment is that it gave the IT department intimate knowledge about how the company does business. Kim believes that it is important also because he says that in his company IT teams must be masters of all processes across the enterprise.
    • Tania Nossa head of IT for Alcoa Brazil: : Making Aluminum requires a lot of raw material and energy. Trying to create a successful company to do this is difficult enough even when you aren’t in the middle of the Amazon rainforest. Tania spent last year working to extend and upgrading the company’s connectivity. This might not seem like such a big deal, until you consider that it means running LAN cables down into mines in the Amazon rainforest – then you start to appreciate what he’s been able to accomplish.
    • Alan Matula, CIO of Royal Dutch Shell: : One of the things that many want-to-be CIOs forget is that very little of what a CIO does has anything to do with technology. For example, Alan spent part of his time last year signing over $4B in outsourcing contracts. Clearly he’s going to have a big job in the upcoming year managing and keeping track of each of those contacts. Oh, and during the same year he implemented one of the world’s largest unified communications solutions. That makes for a full year!

    What All Of This Means For You

    It’s all too easy to get distracted by what we read in the newspaper and see on TV. This past year was an excellent example of how bad news can flood our minds and distract us from what we really should be doing.

    As Bob’s research has shown, the best CIOs didn’t allow a global recession to stop them from moving forward. Sure it may have impacted their budgets and slowed their projects down, but they still made progress.

    Learning by example is how one can become a great CIO. Let what these CIOs accomplished this year serve as an example for you on how to keep your eye on the prize as you work towards become a great CIO.

    Do you think these CIOs were correct in launching big projects during a global recession?

    Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

    What We’ll Be Talking About Next Time

    Remember when using offshored resources as a part of an IT department was such a big deal? These days it’s hard to find an IT department that doesn’t have at least some portion of its work done off shore. When you become CIO, offshoring is something that you’re going to have to deal with. It turns out that things aren’t as simple as they used to be…

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    Posted in CIO | 1 Comment »