IT Needs To Add Value

Even in a downturn, there are things IT can do to create value at companies.

Last week my daughter Allison was home on spring break. Eager to leave behind cold, snowy Michigan for warm, sunny Houston, she e-mailed me the day before she came home. One of the things she mentioned was the airline boarding pass she had just printed out.

Unlike the previous boarding passes she has received, this one included some new things. On it was a list of local Houston events and the weather outlook for the next few days following her arrival. There were also some ads.

Allison wants to get into marketing and immediately saw the beauty of this. The airline took an unused asset (the blank two-thirds of the page) and converted it to something of value--an events list and weather forecast for the traveler and a source of ad revenue for the airline.

I found this use of technology utterly amazing. My amazement wasn't with the technology; that's pretty straightforward and relatively simple. Rather, my amazement had to do with the fact it took the airline so long to apply this simple use of technology to create value. It could have easily been done long ago but wasn't. Perhaps the airline just thought about this, or perhaps it saw a competing airline doing it. The fact remains: they failed to initially capitalize on technology to add value.

I'm not writing this as a slight against the airline, because the truth is we've all had this same failing. I believe the reason is that sometimes we get too wrapped up in the Holy Grail twins: meeting customer requirements and being efficient. These are admirable goals, and we should continue to try to achieve them but sometimes if we focus too tightly on them we may miss opportunities to add value.

Going back to the boarding pass example, I'm sure the information technology department was asked to provide a way for people to print boarding passes from their own PC; so it focused on meeting that objective and, in the interest of efficiency, stopped there. At this point everyone felt good: The requester got what was asked for, and IT was able to move on to other things. Yet it missed the opportunity.

Recognizing these opportunities is important, especially in our current economic situation. However, before we as IT leaders rush off and start telling everyone how they need to run their business, we need to remember we are not here to run those operations. Instead, we are here to act as a support organization and resource. The good news is that within this structure we can still improve the chances that our companies will recognize and seize the opportunity to use technology to add value.

In addition to making suggestions, what we can do is act as a bridge between IT and business. By communicating, demonstrating, explaining and, yes, even evangelizing technology, we can make the business aware and more open to exploring options. The key is realizing that technology makes things possible that only a short time ago could not be done. Although I hate to use a cliché, it really is about changing the paradigm of how we approach things.

By helping your users gain a better understanding of technology you will, over time, expand their thinking about technology and how it can be used in new and different ways. The great thing about this transformation is that it isn't one-sided. I think that you'll find that as you talk and work more closely with your user community, you and your staff will start to learn more about the business and the community's needs and concerns.

Ultimately, as the IT side and the business side learn more about each other, the recognition and implementation of new opportunities will come more easily--and more frequently.

One key factor in doing this is to keep it simple: Don't forget the original intent. Adding local information and ads to a boarding pass printout is adding value. Suggesting that the project be expanded into a new reservation and ticketing system isn't. In this economy, people are looking for quick wins. Although there may be a certain logic to doing transformational projects now, the reality is that most people cannot afford them.

Adding value (and doing it quickly) can be key factors in IT achieving a couple of its other goals: a true partnership with the business and being thought of as an area for investment rather than a cost center to be tightly controlled.

This article is also posted on Forbes.com.  Feel free to join in the discussion either on this site or at Forbes.com

If this topic was of interest, you might also like these:

• Nurturing IT
• Trying Harder In Hard Times
• IT Survival Advice
• Or the posts in the "Strategy & Management"  category.

Comments

[Glenn Whitfield]

Mike,

You're right on! Especially in today's economy, now is the time for IT to step up and show it's real value. It doesn't have to be the greatest technology solution ever - just small steps toward creating value in an organization. I think it very important for IT leaders to step up and make sure they are adding value. I also offered some suggestions here: http://itbusinessalignment.wordpress.com/2008/12/08/enhance-the-value-of-it/

[Marc Sirkin]

Great post Mike. I just spent 2 days in Lisbon listening to everyone and anyone talk about how CIOs must both save money and create value at the same time. But even that's not enough. Your example is good, but perhaps doesn't even go far enough (afer all, are those ads going to add SIGNIFICANT top line revenues?)

The question and discussion that keeps coming up is creating strategic value to both the top line (i.e. significant revenue opportunities created via IT) and taking cost out of the business. The cost issue is a simple way to get started, but you have to push even further by specifically looking at, and understanding the core business.

One of the things I heard this week that I found interesting is the concept of the CIO really being able to speak to the CFO in financial terms and working hard to build that credibilty and trust over time.

Again, great post. You are clearly on the right track. I encourage you to push even further while thinking about how to create value.

Marc

[Mike]

Glenn,
 
Good to hear from you.  Starting small is a good first step.  The important thing is not to only focus on cutting things back but to also figure out how to add value.

[Mike]

Marc,
 
Thanks for commenting.  This type of thing is most certainly not the most significant action.  However, the point is to change the way we approach things.  Before we can truly do significant things we may need to establish a track record of being able to do this and show we are not just interested in spending on big, new systems.

[Paul]

Interesting post Mike,

In the short time I spent working in IT, I found that 'traditional' businesses call for the technology team when they have already made up their minds what they want. As a result, opportunities for technology to add value to processes and relationships (and not just the end product) have already been missed.

The good new is indeed that companies are using technology in much more complete and creative ways to improve our experience (in the case of the enhanced boarding pass, the customer experience of your daughter's air trip). More and more are getting the message thanks to articles like yours highlighting the advantages so clearly and because there is good business in it for them too!

Best Regards

Paul

[Mike]

Paul,
Thanks for the comment.  I think as the IT groups and the business groups learn more about each other the prospect of getting added value from technology (which in many cases you already own) goes way up.
Mike