The quest for business agility became nearly universal as the U.S. was appearing to emerge from recession. The central idea is that organizations of all sizes need the speed and agility of a startup to respond rapidly to changing conditions.
Now that the U.S. economy is sputtering again, demands for business agility are becoming even more prevalent. The right response at the right time is a key to gaining an edge over your competition. Companies need the ability to quickly sense and respond and they need to weave that ability into their DNA.
But how do you accomplish this level of agility while hunkering down in an uncertain economy? From my experience, a primary means is to leverage your existing IT tools and staff.
IT tools don’t generate sales, profits or agility by themselves, but they’re clearly an enabler of these business objectives. The more time IT spends crafting and creating agile working environments, the more momentum a company’s success gains over time. Fortunately, most proactive IT teams have already driven practices and technologies that enable their organizations to do much more with less.
Specific examples of IT-driven productivity enablers include allowing users to create their own portals and collaboration spaces, deploying single sign-on ID’s to easily access all business applications, and providing instant messaging systems that yank productivity killers out of corporate communications.
Other broader examples include: selective managed services, software-as-a-service (SaaS) and a range of options falling under the broad heading of cloud computing.
Cloud computing in particular may correlate best with the basic goals of business agility. Both share a common objective to respond to changes on demand, in the right way, at the right time and at least cost. And both technologists and business leaders will have to change and move closer together to accomplish their shared objectives.
To me, as a CFO, agility means moving quickly and easily and allowing people to seize opportunities. It’s like adding high octane fuel so your business engine runs faster and gains an edge. But the inconvenient truth is that business leaders can’t become more agile without making IT investments that will support increased agility. And, equally important, IT can’t enhance agility without some changes in how business leaders set expectations and go about their work.
As someone personally committed to increasing business agility, this column examines ways IT can best meet my needs. I also discuss how functional leaders like me must change to more effectively partner with IT.
I define business agility as an environment that enables companies to grow faster than their competitors. Improving agility can add one to three percentage points of operating profit to your bottom line when people are enabled to make hundreds of adjustments each day that reduce costs and increase revenues.
To accomplish my agility goals I need the ability to:
- See change coming - I need smartphones and portals and mobility/collaboration tools that swiftly connect me not only to my internal team, but also to my community of customers and partners.
- Change direction quickly - I need to squeeze more productivity and efficiency from existing systems investments and launch new products and services faster. I cannot wait to make new investments until existing IT investments are more maturely depreciated. And I need to know how much everything costs me without running complex spreadsheets.
- Distribute authority across the organization - I need business leaders to be able to initiate change -- that will inevitably have an IT component -- without having to climb up and down vertical hierarchies to take action.
The bottom line is functional leaders and IT can no longer say they play on the same team, but run around on different fields. Before technical and procedural changes can become more agile, the culture of an organization must also change.
One way we’ve found to accomplish this "re-culturization", if you will, is to embed IT staff in the business areas they serve. What better way for IT to understand the needs of a finance department, for example, than to have them actually work in the finance department? The Us vs. Them dividing line quickly fades when everyone drinks at the same water cooler.
In an agile organization, it’s not enough for IT to just “support” the sales team. IT must become an integral part of the sales team, or the marketing team, or the manufacturing team. They need to participate in sales calls, staff meetings and work sessions to clearly see and prioritize the constant challenges and, more importantly, opportunities that arise. This kind of close collaboration requires at least as much teamwork as technology. In fact, to succeed in IT today, you need to be a good technologist, but you really need to be a great relationship manager … actually, you need to be a phenomenal relationship manager.
That of course means embedded IT team members must also be empowered to make decisions. The way it works at Logicalis is technologists are incented to engage directly with business stakeholders. They are able to make their own decisions because they clearly understand the overall charter of IT projects, the protocols and IT standards we use and, significantly, they have authority to act on their own initiative.
Hands across the hierarchy
There are two sides to every story, of course. So those of us on the business side can’t just toss new technology demands over the wall without truly understanding what we’re asking for. Just as the understanding of business processes is of rising importance to technologists, a deeper understanding of IT dynamics is equally important to business leaders.
One advantage of having IT embedded in business departments is that while technologists learn to see things from our point of view we, in turn, learn to see and appreciate their view. For example, in my own department we urgently needed an application to simplify commission payments that would automatically pull data from our ERP system. Because we knew what we needed and the IT team had educated us on system interface standards, together we found a suitable SaaS application and had it up and running within a month.
That kind of distributed authority can only work when IT and business leaders understand each other at deeper levels than found in most organizations. This allows a trusting partnership where teams have the autonomy to improvise on local circumstances while maintaining protocols of consistent behavior.
There is plenty of uncertainty in the economic headlines today, but one thing is crystal clear: This is no time to wait out the storm. Let your slower competition do that. This is the time for both IT and business leaders to get beyond cordial chats and learn how to work together as one.
As a CFO, I know I will continue to invest critical funds in IT, but the investments I approve will only be those directly supporting fast-paced company objectives. If we have to lean into some corners going forward, I need to know that IT and I are leaning in the same direction.
Greg Baker is the chief financial officer for Logicalis, an international provider of integrated information and communications technology solutions and services, where he oversees finance, accounting, treasury and strategic planning. Prior to joining Logicalis, Mr. Baker held key finance positions with Thomson Reuters, a Tier-1 automotive supplier, private equity firm Talon LLC, and PricewaterhouseCoopers.