Opportunities for retail IT departments in 2017

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In the corporate world of now-a-days, there are rarely any processes that do not depend heavily on IT technology. Ranging from purchase systems, CRMs, ERPs and all other decision and relation supporting systems through in store equipment like POSes, up to corporate core functions like data, communications and reporting.

The range of IT responsibilities in a corporation is vast and while IT departments tend to be rather large and crowdy and the annual IT budget growing year-by-year, most of line of business managers say that their corporate IT is a show stopper. None-the-less there are many opportunities to improve that impression.

Driving innovation

With the increasing push from corporate boards and shareholders for innovation, many companies think of and discuss different ways how innovation can be achieved and accelerated. Innovation is a very modern buzz word of now-a-days. But far from a simple hype, many of the world biggest companies invest heavily their resources to stay ahead of their competitors. Driving innovation is a demanding process with many risks and pitfalls.

There are three basic steps that help you to ignite innovation: allocating needed resources, creating and maintaining a spirit driving new ideas and allowing new concepts or ideas that are not “conform” to your company’s current strategy.

IT departments can play a vital role here as many Innovations are aided in their core by IT technology. Especially for retail IT, there are many new windows of opportunities open here … In-store analytics is a new and promising way to explore one’s customer journey in the brick-and-mortar stores.

Clearly articulate the value of tech innovation

This is a vital point for all innovation activities. There are many excellent ideas out in the world with little to none practical use. Even things that worked for one company might not work for another. During the innovation process sooner or later every idea will be presented in front of the board to ask for funding and approval.

It is hard for many IT executives to clearly articulate the value of tech innovation, or even to explain the core idea. Speaking IT jargon and technical language in front of the board is never a good idea as it simply will not be understood. Business executives need to hear their language – costs and profits, risks and opportunities, legal and compliant views as well as impact on customers and competitors.

Making business

Many things sold now-a-days are offering IT related services. Who is better suited then IT to suggest and prepare IT gadgets? Head up displays in cars and even autonomous driving would be impossible without strong IT and business partnership. While connected cars are already reality, automotive data brokering might bring in the near future more revenue than selling cars.

Kiosks enabling customers to design and order customized meals directly in restaurants are new channels to generate revenue and Blockchain might be even the new business for banking.

Using strength of a brick-and-mortar store

Even legacy assets and systems can be a source of competitive advantage, especially when facing new digital and disruptive competition. Brick-and-mortar bound discounts are impossible to duplicate for on-line retailers and generate new traffic to one’s stores.

Agility

In the fast paces business world of today … it is no longer possible for IT departments to work in the old, reliable but slow way they did for the last 20 years. Working on system specifications for 2 months, doing the programming for 6 months, testing with users for another month and resigning the system to what the customer really wants for another 3 months makes up a year. Within this year, business has no solution and probably loses even the need for the system.

IT departments should strive to give the business a minimum viable product within weeks of communicating the need, adding functionality and stability with each iteration on a monthly basis and securing compliance and necessary paperwork at the end.

Even in the IT daily business there is a need for increased agility. As today’s businesses are more and more dependable on a round-the-clock working IT environment, response to major IT outages must be swift and well ahead of agreed service level agreements (SLA).

Educate the board

Many boards see technology as an IT issue. Understanding how to integrate technology innovation into the corporate business model is often left to lower levels of corporate hierarchy, leaving many possible gains and chances out of board’s radar. It is vital for IT execs to continuously educate the board so corporate leaders might become tech-savvy to see the potential of technologies for their business areas and the corporation as a whole.

Attracting top talents

The matter is of high importance to HR and even the whole board as attracting top talents gets harder with each generation. Gen X, Y, Z … each target group of potential employees has its own desires, specifics and quirks. In the modern world of social networking and shared feelings and experiences, employees have it easy to find job offers, salary comparisons and (ex)employee feedback on your vacant positions.

IT departments have always struggled to find and attract top talents. Best of the best were often taken by IT giants, dot.coms and Silicon Valley start-ups and facing the truth … often are corporate IT departments seen only as a costly bunch of weird nerds from the basement … tending to computers and printers. Seldom are they seen as an asset to company growth and even survival.

A common mistake in the corporate world and IT especially is the habit to try to find the fitting people for defined functions … all ignoring the fact that top talents are unique and seldom fit in corporate hierarchy layers and predefined roles of responsibilities. Even the more, growth and evolution of one’s top talents is limited and hindered by corporate HR guidelines, eventually leading to talents leaving the company. IT execs should strive to take a role of HR business partner, assuming responsibility and proactively attract and retain their key talents.


Keeping the lights on is essential IT duty.

Keeping lights on CopyInnovation, targeting pockets of opportunity and keeping the lights on are the three pillars of every successful IT department. While the first two pillars are often discussed in length, keeping the lights on is seen as something with little added value, often reduced to a pure commodity … like electricity or tap water. While I fully understand and agree with the importance of Innovation and targeting pockets of opportunity, one shall never underestimate the importance of core IT functions and services … something we refer to as keeping the lights on.

In many now-a-day companies, most support and business processes rely heavily on IT systems and environment. Procurement department cannot place orders for needed items and goods without a connection to the internet or intranet of their suppliers, manufacturing units can hardly work if their CNC (robotic) machinery is not programmed or when their ERP systems are off-line, billing departments do not issue invoices written by hand, but rather from a SAP-like system, salaries of your sales representatives are calculated based on their performance that is stored in the company’s data warehouse, brick and mortar shops can hardly sell without their POS systems, on-line shopping is worthless without a well maintained web site.

All companies are affected by the state of their IT systems, some more, some less. Online businesses are kept alive with IT systems, manufacturing industry is dependent on their automated machinery, automotive industry can hardly work without just-in-time supplier chain, financial sector is basically build on data stored on their hard drives.

Just to make the picture more plastic, just imagine your own day without your Smartphone. How long can you ‘survive’ without your mails? Another example, when arriving in your office, you learn that the corporate network is down … how will you check your daily reports? Can you access your files stored on a network drive? Can you work on your projects when your time schedules and to-do’s are stored in your project management tool (that is now offline). Making the story short, WHAT can you do without your IT environment working?

Keeping the lights on is a summary of day-to-day work of your ‘common’ IT staff that makes sure that basic processes of your company can run. As soon as this work is neglected (for whatever reason) the company will soon face serious effect, from lower revenue from your distribution channels, through being not able to fulfil customer’s orders … up to not being able to pay your own employees.

Can you believe that some think that ‘Keeping the lights on’ has no added value for a company?


Engaging IT to business – reloaded

IT2BusinessIt was back in October last year when I wrote the original article Engaging IT to business. Through many discussions on LinkedIn or during various events where I participated, I came to the conclusion that my ideas presented in the article were just the beginning. I do not aspire to offer a complete and final concept, but some of ideas presented below might help you in your own voyage on engaging IT to business.

The key element behind the idea of engaging IT to business is the wish of IT managers to become partners to their business peers, of IT departments getting rid of the label of a cost centre and service provider “only” or of CIOs who wish to get a seat in the board.  Getting there is not easy, but I’d like to share a few ideas how to start the road to get there (… and back again).

The ball in on IT’s side. It is important to realise that it is IT that “would like to” be recognized as a partner to business, so it is IT that needs to be proactive and do the first (and several next) step. Opinions of your business peers won’t change all alone or because you wish so. Instead, IT needs to take the ball and work step by step to shift the existing paradigm. Listening to business, proactively seeking gaps to fill, taking the extra mile, generating IT driven revenue and  sharing with business might be right tools to earn “IT’s place in the sun”.

Listen to business. Sounds too simple, but in fact – this is the key to any IT initiative to engage with business. Business has is always in need to help and support, there are always sore points in need of attention or defunct processes in need of mending. Bad news is that very few of those aching issues are visible from the distance or advertised openly. It should be one of CIO’s top priorities to engage business peers in conversations trying to figure out what is bothering them. There are many different ways the CIO can take, staring from joining sales and marketing meetings, through spending a day in a week out of the HQ in the front (sales) lines, up to informal coffee events sponsored by IT. Taking an found issue as a starting point, IT should be able to mitigate pros and cons and prepare a plan how to solve it.

Proactivity is the key. Opportunities to show business that IT is actually a partner and can get things done will rarely appear out of nowhere.  In the contrary, it is IT that needs to take an proactive approach and create such opportunities. Taking a classic example … there is a new business initiative that has really the potential to make a difference, but it requires several changes in existing IT infrastructure, extra funds to buy a new server cluster and extra human resources supporting the whole idea. Considering costs, risk of negative impact to overall system stability and performance, tight time schedule for implementation and general negative perception of changes … IT usually states that this initiative / project cannot be done. But it takes not much more to come with an approach to evaluate and accept the risk of failure, find maybe a less traditional IT infrastructure concept and personal engagement within the IT department to actually say “YES” to business and make the initiative / project happen.

Take the extra mile. Requests from business are usually processed and issues or incidents solved. There difference is in customer experience as any job or task can be done well enough … or to a point of perfection.  IT should strive to take the extra mile as often as possible … not only fulfilling requests from business but rather exceeding their expectations. When asked to provide an analysis, add some extra statistical charts or add data for a larger period of time than requested. When there is a planned system downtime, makes sure that after all the systems  will be back online to check with key users if respective systems are running correctly. Should there be a repeating problem with an application regularly used, do not only solve that bug, but create some manuals or FAQs and offer in-house training to respective users.

 Generating IT driven revenue. Usually IT is supporting business processes and enabling other business units to create revenue. While this task is important, it still puts IT in the role of a service provider. IT can be presented very differently when there will be projects / initiatives sponsored and executed by IT that actually directly generate revenue. In addition to supporting your business to increase your company’s revenue, make and keep a commitment to identify, develop, get required acceptance, execute and support IT projects directly making money … at least once in a year. Staring from new payment methods, through increasing customer loyalty up to new digital products for direct sale … possibilities are endless.    

 Share with business. There are many decision made by IT that are effecting the entire company – main technology framework, BYOD, outsourcing, information security guidelines … .Inviting business managers to join the process of decision making for such projects / initiatives can bring valuable opinions, hints and ideas based on ‘real business’ experience as well as a strong feeling of engagement. Invite your business peers into respective steering committees,  create IT open days, creative IT workshops and informal meetings (Meet your IT procurement guy …). Get the buy-in from your peers to increase the acceptance.


The need for business driven IT performance indicators.

IT like any other business function is using many (key) performance indicators to measure it’s working effectiveness and delivered results. Historically given, many of used performance indicators were of technical nature, perfectly readable and understandable by IT … but far less so by the business.  Just to name a few: average uptime (of whatever system), Incident resolution within Service level agreement, Number of incidents / escalations. While this indicators makes perfect sense for IT department and steering IT operations, one question emerged repeatedly during C=level meetings: “How does this help the business?”

Based on this premise – a new set of IT performance indicators arose, indicators that were designed for business people to understand them. One of such sets is well explained in ITIL v3 as ITIL KPIs Business Relationship Management – Number of Customer Complaints, Number of Customer Satisfaction Surveys, Customer Satisfaction per Service  … .

Inside the IT community many discussions tried to define a set of performance indicators that would bring IT closer to business. Looking at them from IT perspective, they made less sense in from the technical point of view, but once again, the potential of being understood by business (line of business managers) increased. Again a few examples: IT Cost/Revenue ,Availability, Rate of Application Change, Risk, Employee Satisfaction by Kevin Parker.

Taking the approach a step further, IT needs to answer the already mentioned question:  “How does this help the business?” If IT department is announce performance indicators and present them to business, then those numbers must be: 1. Understandable to non-tech personnel, 2. Be related to actual business performance and 3. Express IT contribution to business performance.  While there are some indicators that comply with point one and two – like for example IT Cost / Total revenue, this indicator fails to comply with the point three – meaning to show how IT contributed to business performance.

IT contribution to business is another much discussed point among IT executives. Several discussions are presented here: Creating a Powerful IT Contribution Statement by Dave Aron, CEO of Unisys Provides Four Tips to Align IT And Business Teams by Jacob Morgan, Engaging IT to business by Miroslav Jasso (myself).  If IT can come with measurable criteria how it directly helped to increase company’s income / profit / margin, then a performance indicator can be established that will be understood by business guys, be related with company’s financial performance and show a direct impact IT has on this performance and look like:

IT value to business = measurable direct monetary IT contribution / total income|profit|margin.


Engaging IT to business.

One of the most discussed area now-a-days is how to engage (align) IT with business. The root point here is that IT would like to become a partner to business, rather than staying a service provider. Getting there is not easy, but I’d like to share a few ideas how to start the  road with you:

The ball in on IT’s side. It is important to realise that it is IT that “would like to” be recognized as partner to business, so it is IT that needs to do the first (and several next) step. Business will not change its opinion about IT out of the blue or because IT wishes so, this paradigm shift needs to come from IT.

Proactivity is the key. Opportunities to show business that IT can a partner and actually get things done will rarely present without IT taking proactive approach. When there is an request for IT to aid / support a business initiative, IT should not tell business how it cannot be done … rather find (even less traditional) ways how to solve businesses’ issue.

Take the extra mile. There are always requests from business that can be fulfilled well enough … or excellent. IT should strive to take the extra mile as often as possible … not only fulfilling requests from business but rather exceed their expectations. When asked to provide an analysis, add some extra statistical charts or add date for a larger period of time than requested. When there is a planned system downtime, makes sure that after it will be back online to check with key users if the system is running correctly.

Listen to business. This is the key to any IT initiative to engage with business. Only rarely business managers will come to IT and tell them what they need. Its IT, impersonalised in the position of IT manager / CIO that has to engage business peers in conversation trying to figure out what is that bothers them. Taking the issue as a starting point, IT should be able to mitigate the issue and prepare a plan how to solve it.

Share with business. There are many decision made by IT that are effecting the entire company – main technology framework, BYOD, outsourcing … .Inviting business managers to join the decision making for such points can bring valuable opinions based on ‘real business’ experience as well as a certain feeling of engagement by those business managers towards tool / technologies they’ve helped to decide about.