Business’s ‘It’s not my problem’ IT problem (with summary)
| Business’s ‘It’s not my problem’ IT problem (with summary) | |
|---|---|
| Published By | Articles by McKinsey |
| Publish Date | March 30, 2023 |
| Authors | Oliver Bossert, Björn Münstermann |
| Topics | Tech for business, Product management |
| Statistics | |
| Article Size | 3000 words |
| Features | Diagrams, Diagnostics Recommendations |
| Diagrams | Yes |
| Downloadable Version | Yes |
| Reviewers | |
| Page Owner | Nikolay Sidelnikov |
| Summary Author | Nikolay Sidelnikov |
Introduction
The article "Business’s ‘It’s not my problem’ IT problem" [1] is published by McKinsey in 2023 and is focused on building the right way of collaboration of business and IT at all levels. Original articles includes practical recommendations, some life examples, and a questionary for company self-check.
Article summary
Establishing a true partnership between IT and business is one of the most important shifts to achieve success in digital transformation. Companies try to do a lot to make this happen, but it requires sufficient training or changes to team dynamics. On the IT side, a lot needs to be done, but in fact, in order to build a truly sustainable collaboration, it is necessary that both business and IT must overcome bad habits and make a real commitment to being partners.
Technology may seem complex, and therefore businesses often try not to communicate directly with IT. All sorts of “go-between” roles are being invented, which should be responsible for communication between business and IT. Unfortunately, the existence of such roles often leads to a decrease in accountability on both sides. Business formulates requirements without understanding how the technology works, and IT implements changes without thinking about what the business ultimately needs. All this reduces time-to-market and does not allow collaboration to be truly effective.
The ultimate goal is to connect the top-level business strategy defined at the board level to technical implementation in IT. The article identifies four levels at which a business must negotiate and monitor the connection between strategy and IT deliverables:
- top management/board level
- business process implementation
- IT governance
- technology platform
Interaction at each of these levels can speed up or slow down the velocity at which new functionality is delivered to users. It is necessary to ensure that all these levels are synchronized in terms of their maturity and effectiveness.
Level 1: Top management
C-suite and the board should have technology as a top priority on their agendas. Key activities offered at this level:
- Prioritize IT at the C-suite level. Business leaders, including the CEO and CFO, must be constantly involved in IT-related decisions. Investing your time and energy is the only way to convey to the organization the belief that IT is truly a priority topic for the company.
- Understand how IT decisions affect the business. In fact, the reluctance of top managers to work closely with IT is often explained by a lack of understanding of technology. Top management feels discomfort and tries to shift IT-related work to other people.
It is necessary to ensure that all management has a good basic understanding of technology. They don't have to know how to write code, but they do have to understand what different technologies can do. For example, in some companies, top managers are sent to suitable courses. When people begin to understand what they are dealing with, they begin to be involved with interest in making decisions related to IT.
Level 2: Business process implementation
When the board makes a tech-related decision, it is primarily up to the business to translate it into a business process that can be implemented. Articles suggests the following ways of building specific capabilities and shifting mindsets at this level.
- Empower product managers. It is important to give more autonomy to product managers, giving them as much business context as possible, avoiding of making them just a "proxy" between business and IT. A good product manager combines both business and technology skills with the operational skills to effectively lead teams.
- Make tech competency a career necessity. It is important to change the situation when business people try to avoid of working with IT because of assuming that it is bad for career. The situation must change. Tech knowledge and experience should become a necessity for anyone wanting to move ahead, regardless of role.
- Co-lead instead of “partnering.” It is important to build a culture that supports this shift. That requires for fundamental changes in incentives, processes, and operations.
Level 3: IT governance
To implement effective operational management, it is recommended to use the following practices:
- Translating IT decisions into joint business objectives. It is necessary to move away from constructing a budget for IT initiatives based on certain average figures for the industry, and to look more at IT projects as investment projects. If a project is framed through the lens of ROI, decisions about project priorities will be much more informed. This practice is suitable for many IT projects, including projects related to technical debt management.
Ideally, the cross-functional team has joint objectives and key results (OKRs) that reflect the business and the IT objectives of the respective areas.
- Communicating in business terms. IT people must explain their goals through the lens of business goals. To do this, they must understand what is really important for the business: value, ROI, customer experience. Businesses must continually educate IT by helping them understand business priorities and discussing how IT can impact those priorities.
Level 4: Technology platform
At this level, a business needs to understand how different systems impact business performance. Business involvement at the decision-making level is beneficial in at least two areas.
The first is the use of digital platforms. Using the right digital platforms can significantly reduce costs when developing new functionality, reuse developments, and significantly reduce operations costs and risks.
Secondly, it is the automation of IT tasks themselves. Despite the fact that task automation is already widely used in many areas of IT, there is still a very large automation potential there, and it is business that can help with the prioritization of these types of tasks.
The article also contains the quick diagnostic with questions that helps a company to identify the maturity of each level.