After reading Panorama’s blog post “The Real Role of the IT Department in an ERP Implementation,” I would firmly agree with this stance if the IT department in the organization remains as an old-fashioned IT function. Scarily, that is still the case for those IT departments who solely focus on keeping the lights on, running infrastructure, acting as the security gatekeeper or manning the help desk; in other words, the ones that put the technology before the business.
I, however, like many transformed IT leaders, am fully business and operationally minded. IT departments can have the greatest reach with multiple touch points throughout an organization’s value chain. Those who have optimized business functions including, but not limited to, R&D, procurement, manufacturing, inventory, sales, distribution, customer service, finance and HR using techniques such as lean and Six Sigma are the new breed. Such focus results in optimized business processes, successful organizational change management and benefits that are realized organization-wide. The real role of such IT departments is to lead an ERP implementation.
The topic of IT departments transforming themselves to become business leaders is already well-documented. The 2012 Gartner CIO Agenda Report has continually commented on the transformation of IT out to the business far beyond the back office systems and data centers. Many commentators are seeing the CIO in dual roles with the new CIO acting as Chief Innovation Officer, one who uses their technological background to optimize the business and the products and services it provides.
Such IT departments and CIO’s do exist and are becoming the norm. They are a testament to the so-called new age IT. These IT departments can lead ERP implementations amongst many other enterprise-wide implementations and greatly contribute to the success of implementations. More importantly, they can increase the value and benefits gained from such investments over the long lifespan of such systems.
So what does this all mean? What differentiates new age IT and what is really being offered or at risk?
- Creating an IT silo by having IT predominately focus on the technology implementation treats the ERP implementation as a one-off exercise. ERP is a life-long journey which also will undergo continuous improvement to support new business initiatives and organizational growth.
- With enterprise-wide interaction, new age IT provides organizational insights at both a macro and micro level. This perspective ensures that the business processes flowing through an organization seamlessly and effectively interoperate.
- On a daily basis, new age IT deals with organizational risks in the form of security, system implementation and upgrades, change management and disaster scenarios. ERP implementation failures are costly and extremely disruptive, and present large risks to organizations. The expertise and experience that the IT department can bring can serve to greatly reduce the risks that contribute to ERP failures.
- IT staff is well-versed in increasing user adoption through its continued involvement and management of technological change. Employee readiness, buy-in and training are key to success.
- New age IT is very agile. The adoption of agile methodologies such as Agile SCRUM means the organization can inspect and adapt to the situation at hand successfully. An ERP implementation is not going to be static and will require a multiplying force such as IT to manage the dynamic events and activities that arise.
- Over the years, the IT industry has greatly matured their processes – especially in the area of change management. The utilization of frameworks such as ITIL and ADKAR places change management as a standard discipline of all new age IT practitioners.
- The adoption of continuous improvement initiatives, lean and Six Sigma by IT has meant that IT investments have been able to provide tangible organizational benefits. New age IT is able to realize such benefits and quantify them better than ever before.
- New age IT brings so much more to the table than technology, including a knowledge of governance, business analysis and project management, all of which are critical to ERP selections and implementations.
So how does an organization create a new age IT department?
- Get the right balance. Ensure there are necessary controls to protect intellectual property and provide operational reliability whilst still maximizing innovation through creativity and flexibility. Resource both the technical components (network, infrastructure, data center, etc.) and business and commercial elements (business efficiency and effectiveness, product and service differentiation).
- Focus on what matters. Many IT departments are evolving as they are enabling themselves to free up resources to focus more on business initiatives rather than just technology initiatives. Focusing on proactive management, improved IT processes or the utilization of cloud-based services for commoditized IT services frees up valuable resources to do this. Business initiatives give people the power to do their real jobs as effectively as possible, and not be a slave to the machine.
- Complement technical skills with business skills. A new age IT department provides sound business skills across the whole value chain. Get out and about, get more face time and be on the ground with all the functions throughout the business.
- Align your priorities and purpose with the business. Unless your company is in the business of providing or selling IT services and products, recognize that it isn’t all about IT. What truly matters are the strategic objectives of the organization, the products and services that the company sells, and the customers that consume them. Think about what is going to make those consumers enjoy the experience more and become loyal customers. Think about such opportunities and how IT can improve the product or service offering to further differentiate your company from its competitors.
- Don’t be a functional silo. Be more than a service provider, partner or enabler and participate throughout the entire organization and its initiatives. Provide expert insights and be a trusted advisor by operating in cross-functional teams and ingraining the business DNA into IT.
Old-fashioned IT departments can put businesses at risk and, as such, do not deserve to lead ERP implementations. In contrast, businesses that already have new age IT are fortunate to have a team that is extremely well-positioned to successfully carry out both ERP initiatives and other enterprise system initiatives. New age IT coupled with organizational readiness, executive buy-in and the right internal and external subject matter experts and resources all are part of the formula for a successful ERP implementation.
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