How can you be a more mindful leader? Consider these 8 practices for bringing more mindfulness to your work day and team - to boost well-being and innovative thinking.
Reinventing IT as a revenue generator: 4 steps that work
IT leaders striving to create new revenue streams should consider these foundational changes
Innovate or die. It’s the reality companies face in the digital era. CIOs have the opportunity to move into the driver's seat and proactively reinvent IT as a revenue generator or be replaced.
Making the shift from operator to innovator and revenue generator is no simple task. There is not a one-size-fits-all approach to address this challenge, but there are foundational changes every CIO can make to start delivering digital transformation and creating new revenue streams.
1. Establish a unified and data-driven organization
Sixty-four percent of the respondents to a 2017 Harvey Nash/KPMG CIO Survey of more than 4,600 CIOs say their CEO wants IT to focus on how to make money rather than save money.
CIOs must move beyond enabling “the business” to becoming the business. Traditional IT associates often struggle to connect their work to the success of the company, which results in a lack of engagement. When they feel they are “the business,” heightened levels of involvement and innovation follow.
Traditional IT key performance indicators and metrics, while valuable to IT operations, rarely paint a picture that truly matters to business leaders. CIOs should identify what is important from a business point of view and focus on insights – what moves the needle with customer satisfaction, user experience, margin/revenue/EBITDA growth, etc. It is crucial to move to a data-driven organization and scale beyond KPIs to business insights where IT is proactively leveraging analytics to identify and unlock new opportunities.
[ See our related story: Digital transformation: Are you using outdated IT metrics? ]
2. Embrace a culture of innovation using design thinking
There is no question that design-driven companies outperform the industry. The Design Value Index (DMI) shows that – over a ten-year period – design-driven companies surpassed the S&P by more than 200 percent. Putting design at the center of the IT organization, so that design thinking is engrained in all areas, will open the doors to revenue-generating innovation.
Design thinking focuses on human-centric design to develop rapid prototypes for solutions to business opportunities. By evolving the traditional IT mentality from “you need this widget” to “let’s solve a business opportunity,” CIOs will start to develop a culture of innovation in IT.
Design thinking will open up opportunities and unleash innovation with leaders from across the company. Teams with this skill are better at leveraging empathy to build personas and storyboards, identifying problem statements, ideating on solutions, and delivering prototypes through a test-and-learn approach. They innovate with a startup mentality.
Culture is difficult to change, but through design thinking and a focus on innovation, it can be achieved with significant results. For instance, at CompuCom, we have utilized design thinking to solve important opportunities with our customers and internally: Examples include “what is the future of employee experience in a digital, connected building,” “the onsite healthcare clinic of the future,” and “how to increase conversion rates in store.”
3. Focus on collaboration
With many advanced collaboration solutions out in the market, it’s baffling to see some IT organizations stuck collaborating the same way they did 15 years ago. Ineffective meetings are killing productivity and creativity. Conference calls where every participant is multitasking; teams working on different versions of the same files – these issues should no longer be holding back teams. Technology – like video conferencing and co-creation capabilities, have solved them.
Collaboration is more than technology, however. Collaboration is how IT associates learn from and influence the business leaders across the company. To truly drive digital transformation and revenue opportunities, the IT team needs a deep level of exposure and knowledge of the various business functions and units. Through scheduled “day-in-the-life” activities, IT associates across roles should shadow associates from across the company. What is working well? Where is there inefficiency, swivel seating or breakpoints? In addition, they should shadow a process end-to-end and not focus on individual productivity, but rather how a process works in whole.
Building business-level knowledge and expertise is difficult, but through a systematic approach to collaboration it can be achieved, which opens the doors to innovation and new business opportunities. Here at CompuCom, virtually all of our meetings are video conferences, and in our new digital headquarters, all our rooms are equipped with advanced video conferencing solutions that immediately connect to the individuals in the rooms, without wires, and without 15 minutes of fumbling around. Our core business is end-user services, and even the leadership team is out regularly on ride alongs with our technicians to customer sites, to understand what is working well and what requires improvement.
4. Run IT as a business, financially as a P&L
IT associates often don’t understand the components of what drives company financial results. That needs to change. As CIOs reinvent IT as a revenue generator, they need to make the shift from cost center to full profit and loss responsibility. Metrics should reflect a P&L, with a focused business management system review with senior IT leadership. Running IT as a business is critical to making the shift to a revenue generator. Here’s a challenge for CIOs to ponder: Can they sustain the cost of IT with the revenue they generate?
CIOs have an outstanding opportunity to change the scope and function of IT for the future and provide much-needed capabilities for driving digital transformation and the opening of new revenue opportunities for their companies. By establishing a unified, data-driven organization that embraces a culture of innovation with design thinking, focuses on collaboration, and runs IT as a business, CIOs will have the foundation necessary to reinvent IT for the digital era.
[ Get money-making wisdom from 15 top CIOs. Download our Harvard Business Review Analytic Services report, Revenue-generating CIOs: Smart strategies to grow the business. ]