Inside Logistics

Maximize IT: The new ROI

Revenue, operations and innovation


November 10, 2015
by Kevin Squires

Kevin Squires is Vice President, Business Technology for the Econo-Rack Group of companies (Konstant, RediRack, Econo-Rack, Technirack.)

Kevin Squires is Vice President, Business
Technology for the Econo-Rack Group of companies
(Konstant, RediRack, Econo-Rack, Technirack.)

Running a good IT organization is all about consistency and maintaining a stable, robust platform; “keeping the lights on.”

Making sure servers are running at an optimal level and that downtime is kept at an absolute minimum. Fault tolerance, fail over systems, and a plethora of other tools used to ensure your IT systems are up and running and people are productive. Mean Time Between Failure (MTBF) percentages are all the rage and make up the executive summary slides that prove IT is doing their job—and doing it well.

Right?

Well, operations IS very important and does add inherent value to an organization. Unfortunately, that is the extent of the role that IT plays in a lot of companies.

IT as a competitive weapon

However, in almost all top companies, IT is seen as much, much more. It is a competitive weapon that, if used properly, can be a key contributor to the bottom line, aggressively drive revenue and work towards creating a sustainable competitive advantage. I kid you not.

The main difference is encapsulated in one word:  innovation. It’s using IT to innovate by creating new ways of selling effectively, selling in multiple channels, creating unique customer experiences and ensuring they come first.

Running a good IT organization is all about maintaining a stable and robust platform. Running a great IT organization starts with a great operational IT environment then looks at ways of helping to drive business growth and increase revenue through relentless innovation using technology.

Sound easy?

It can be. But, the critical element to this transition in how IT is viewed by the organization comes down to leadership. You need the right IT leader and you need to have organizational support that views IT as a business contributor and not just someone you call when your email won’t print.

I have seen too many organizations realize they needed to use IT to grow the business through innovation and customer-centric development but fail miserably because they tried to jump right into this new paradigm using the same leaders, processes and approaches that made them a good operational IT shop.

Yes, this can be done, but it is very rare and almost always falls short of what potentially could have been.

Why? Good question. Successful operational IT  leaders are successful for a reason—they have that unique, detail-oriented mindset that is required to ensure the organization’s IT resources are all working in harmony to create a stable platform for employees to do their jobs effectively.

Very important stuff that is focused on the “now.” The same can be said for an innovative IT leader—it requires a certain skill set to be successful—creativity coupled with a strong business acumen that is ultimately aimed at generating revenue. So, simply put, operational IT is about maintaining the known of today, while innovative IT is about discovering the opportunities of tomorrow.

So, which approach is best? That’s easy—you need both. If your network is down and your telephones aren’t working, does it matter how innovative you are at that moment? Nope. Establishing an IT shop that goes beyond the traditional service-based approach seen in most organizations requires a strong operational backbone before it can even get off the ground. Both are important.

In the end, it boils down to leadership. Executive leadership that is capable of viewing IT differently—viewing IT as a “contributor” to the business and treating them as if they were any another profit-generating division with a seat at the big table. And, as I have already mentioned, an IT leader who possesses an innovative mindset. Easy to say, but this kind of IT leader is very hard to come by outside of your large Fortune 500 companies. They are typically snatched up quickly and don’t come cheap.

The focus of IT should be on the operations and innovation. If you do that successfully and with the right leadership, revenue will soon follow.

In today’s market where new, viable competition can spring up almost overnight, innovation is no longer something that only the big companies do. It is something every company must do to survive and grow. So, if your organization only views IT as a way to print emails and share services, then you better start thinking about the new ROI because your competition most likely already is.