Recent studies show that IT leaders rarely understand their organization’s needs, and business leaders rarely understand IT functionality. Smart investments in business value dashboards can help any organization bridge these unfortunate gaps in understanding.
All too often, tech innovators assume a direct correlation between innovation and business productivity. The reasoning is that, as technology that facilitates internal communication continues to grow and develop, understanding of a business’s shared goals becomes sharper and easier. Given the proper online channels, it’s presumed that staff members will keep each other informed about their priorities as individual staff members and as members of their department.
However, even the most up-to-date digital infrastructure remains dependent on the productivity of individuals working within different departments, and these individuals don’t always communicate effectively. Job roles are becoming more specialized, meaning that the expertise they entail is becoming more and more specific to that particular role. This is especially problematic for a sector like IT, where there already exists a huge knowledge gap between laypeople and experts.
This is part of the reason why tech innovation is actually making communication between different departments more difficult — especially communication between IT and the rest of the business. A recent survey conducted by Claranet found that only 28% of European IT departments think that they fully understand the needs of the business as a whole, and only 26% believe that the wider business has a complete understanding of the IT department’s role.
“Those IT leaders who aren’t prioritizing developing an understanding between IT and the business are harming their own career prospects and the prospects of their business,” said Claranet CIO Andy Wilton.
IT and business leaders need to seriously consider the implications of these findings, considering how a lack of shared understanding of departmental and business needs may lead to ineffective coordination and a failure to meet either set of goals. Enhancing communication may help organizations stay ahead of both the pace of IT innovation and their competitors.
The Importance of Effective Communication
Claranet’s survey isn’t the only recent research confirming the dearth of effective communication between employees and departments. In a study commissioned by ClearCompany, 86% of employees and executives who participated cited a lack of collaboration or ineffective communication as a cause of failures in the workplace. The McKinsey Global Institute found that employee productivity rises by 20-25% when a company employs social technology to improve communication and collaboration.
The problem, as stated by founder of the Dutch software company Every Angle, Jacques Adriaansen, is that “IT cannot keep pace with the rate of change and business users are not able to specify their information requirements adequately.” As the entire IT world struggles to adopt more innovative technologies and strategies as they’re produced more and more rapidly, business leaders still aren’t sure how to articulate exactly what it is they need from their current IT infrastructure, let alone from new technologies.
Poor communication and collaboration is especially damaging for IT, as a properly functioning IT department must continuously adjust its operations and processes to help the business as a whole. When executives fails to understand just how integral IT is to the success of the business, they can invest resources in the wrong technologies, harming both IT’s performance and its reputation as a business value generator. Without fully understanding the demands of the business, IT can easily overspend and underperform.
What’s worse is that these communication issues are happening at a time when IT operations are becoming ever more tied to business outcomes. A strong online presence is key not only to raising awareness of brands, but increasingly, to the proper delivery of services. Breakdowns in communication can result in IT failures that not only harm your bottom line, but your reputation with consumers.
Bridging the Divide Between IT and Business
Realizing the difficulties that accompany the increased importance of IT operations, many organizations are outsourcing control of IT budgets in order to decrease the risk associated with IT mismanagement. According to Gartner, while only 17% of IT spending is currently managed by those outside the department, this number is expected to increase to 50% by 2020 for organizations who strongly emphasize digital. The research company expects that by 2021, 75% of those companies with traditional IT budgets will fall behind their competitors.
However, changes to how the budget is structured will not change the true underlying problem: the illegibility of advanced metrics for those outside of the IT department. Many organizations operate without a common language that connects IT and the business, so leaders in one department can never fully understand the needs and functions of the other.
One way to solve this problem is by hiring a Chief Analytics Officer. As it’s been argued in the past, a CAO can mediate conversations between the larger business and IT departments through the creation of a common language and the development of an organized and well-tailored analytics program. He can also ensure that business-related technologies like analytics are used by the company in a way that fits into and complements the culture and goals of the business as a whole, rather than contradicting them.
But of course, bringing on a new member of the executive staff isn’t a practical or affordable step for every organization. Whether or not your company is prepared for the organizational shifts or additional costs involved in bringing on a CAO, I’d recommend a business value dashboard to fulfill similar needs.
The Benefits of a Business Value Dashboard
A well-designed business value dashboard incorporates IT and business analytics into an easily readable presentation. With the help of a BVD, IT professionals can translate obscure tech jargon into simple terms of profit and loss. Instead of spending hours in the boardroom trying to explain the significance of various metrics, IT workers can demonstrate exactly how healthy the company’s IT infrastructure is, how vulnerable it is to outages or slowdowns, and how cost-efficient whether or not it’s being run in a cost-efficient manner.
Not only does this allow business leaders to understand IT spend, but it also fosters effective communication between employees in both departments. With everyone on the same page, IT can argue for the necessity of certain budget allowances, and business leaders can identify when spending turns into waste.
While Claranet’s discovery of a communication gap between IT and business operations should be worrisome, organizations can remedy the situation through more cooperative processes and smart technology investments.