Empowering CEOs with Strategic Insights for Success in Information Technology

Unravel the complexities of Information Technology in ‘Demystifying IT’ by Saurajit Kanungo and Bhopi Dhall. This groundbreaking guide empowers CEOs with a clear understanding of IT, fostering strategic decision-making for unparalleled business success.

Elevate your business acumen and gain a competitive edge by delving into the world of IT with ‘Demystifying IT.’ Continue reading to unlock the language of technology and reshape your approach to leadership.

‘Demystifying IT’ serves as a comprehensive guide for CEOs, bridging the gap between leadership and Information Technology. Kanungo and Dhall adeptly break down IT concepts, enabling executives to make informed decisions. The book navigates through key IT principles, demystifying jargon and empowering leaders to leverage technology for strategic advantage.

Kanungo and Dhall’s ‘Demystifying IT’ is a game-changer for CEOs seeking to navigate the IT landscape. The authors successfully translate intricate IT concepts into accessible insights, empowering business leaders to harness the power of technology. The strategic focus and practical approach make this book indispensable for executives aiming to align IT with business objectives. A must-read for those aiming to lead in the digital era, ‘Demystifying IT’ is a roadmap to success in the dynamic realm of Information Technology.

Genres

Information Technology, Business Strategy, Leadership, IT Management, Executive Guides, Corporate Communication, Digital Transformation, Technology Insights, Strategic Decision-Making, Professional Development

Recommendation

Information technology is an indispensable tool. But, as IT consultants Bhopi Dall and Saurajit Kanungo note, business leaders often take an overly narrow or risk-averse view of IT’s role and, thus, fail to leverage its capabilities fully. The answer, they argue, lies in better collaboration between IT and business leaders and a solid road map for pursuing digital projects. The authors discuss how to assess your company’s IT maturity, offer case studies of successful IT ventures – and analysis of failed ones – and provide tips for facilitating greater understanding between IT and corporate executives.

Take-Aways

• Information technology is an indispensable tool in all business areas.
• Avoid two traps that keep firms from fully harnessing their IT capabilities: executives’ ignorance and executives’ fear due to previous IT failures.
• Attempting overly complex IT transformations in a single step can lead to failure.
• Successful IT projects hinge on collaboration between a company’s business and IT departments.
• Business strategists and the CIO should develop an understanding of each other’s domains and work together as an integrated leadership team.
• Business leaders should develop a basic understanding of digitization projects.
• Mature as quickly as you can through the “four stages of IT leverage.”
• Companies often stagnate between the crawl and walk stages of maturity.
• Define an IT strategy and consider new IT, like AI.
• Assess your current use of IT and develop a vision for its optimal use.

Summary

Information technology is an indispensable tool in all business areas.

Today, Information Technology (IT) plays a pivotal role in company operations and customer interactions. Whether you sell fish, furniture or insurance, your business should harness IT intelligently and prioritize technology in its strategies.

“Information technology has become so ubiquitous and so powerful that the potential to use it proactively in every area of business simply cannot be ignored.”

Amazon’s debut as an online bookstore illustrates this concept. Jeff Bezos chose to sell books not because he loved them, but because they were an ideal product for testing and developing his technology-driven vision of an online sales platform. Books ship easily – without spoilage or damage – and people rarely return them. Over time, Amazon’s technological innovations have become its most valuable asset. For example, Amazon Web Services, which originated from the IT infrastructure the company initially built to meet its operational needs, is now Amazon’s most profitable division.

Avoid two traps that keep firms from fully harnessing their IT capabilities: executives’ ignorance and executives’ fear due to previous IT failures.

In many companies, the IT department plays a mere support role, focusing on maintaining the network and resolving technical issues. A company’s financial statements often reflect its narrow view of IT, categorizing the IT budget as overhead, under general and administrative (G&A) expenses. This mind-set treats IT as a utility, like water or electricity. It fails to recognize technology as a crucial investment and a powerful tool that leaders can use to increase revenue, reduce costs across the organization, and introduce and implement innovative business ideas.

“With the ongoing spread of information technology, it’s now fair to say that ‘every company is an IT company’ – or needs to be.”

Avoid two traps that can keep you locked in the “G&A” phase. The first occurs when the executive team and the board have yet to experience IT’s potential. The business continues to perform adequately without major changes, leading to a focus on minor IT updates rather than significant innovation. This approach overlooks the hidden costs of missed opportunities due to being uninformed, as well as the risks of falling behind your competitors or being ill-prepared for disruption.

The second trap happens when executives have experienced a traumatic IT-related failure. Perhaps they once invested heavily in cutting-edge IT, such as a costly enterprise software package, which turned out to be a cost and schedule fiasco. Unsurprisingly, such experiences make leaders hesitant to explore IT opportunities further. Indeed, 70% to 80% of enterprise resource planning (ERP) implementations fail to meet their objectives, as do many ambitious IT projects aimed at digitization.

Attempting overly complex IT transformations in a single step can lead to failure.

A failed project does not always mean a total loss, but, rather, that the project does not meet its objectives. It delivers defective or incomplete functionality, exceeds the budget or falls behind schedule. In some cases, these issues combine, leading to even more severe consequences than failed implementation.

The inherent complexity of even simple systems, with their layers of code and underlying binary language, makes large-scale software integrations especially prone to failure. To solve this problem, use a divide-and-conquer approach: Devise a master plan and break it down into manageable segments, each aimed at delivering specific benefits such as automating a task, assisting in customer retention or adding strategic functions. Complete and test each phase thoroughly before moving to the next, thus allowing for reassessment and adjustments. This approach ensures that each step will contribute to the company’s IT capabilities and overall business objectives.

Successful IT projects hinge on collaboration between a company’s business and IT departments.

Any major digitization project involves numerous complex and evolving components. Such endeavors demand multifaceted and often underappreciated effort. But the intangibility of software and the invisibility of coders’ work often breeds mistrust and creates a disconnect between business leaders and IT.

Executives cannot merely assign tasks and expect the IT team to deliver without deeper engagement. The root cause of failure frequently lies in communication and coordination gaps between IT teams and business leaders. CEOs or their equivalents must encourage – demand, if necessary – thorough collaboration from the start.

“When IT projects fail to deliver expected results, the roots can often be traced to gaps in communication and coordination between the information technology people and the business leaders. They misunderstand each other.”

When IT teams and executives do not communicate and collaborate well, they mutually undermine their ability to achieve corporate goals. Non-specialists may not recognize an IT project’s unique challenges, while IT professionals might feel overwhelmed and sidelined unless they are given a voice in discussing the company’s strategic direction. This lack of coordination results in poorly conceived plans and subsequent operational challenges. Discussions should include everyone responsible for a project and should consider all facets of it in advance – or risk falling behind or failing.

Business strategists and the CIO should develop an understanding of each other’s domains and work together as an integrated leadership team.

Most individuals, left to their own devices, concentrate on their specific roles and expertise. However, this approach can inadvertently constrain top IT personnel who may slip into an order-taking posture and miss contributing to strategic planning and decision-making. This may happen, in part, because they don’t assertively seek involvement, but the lack of perspectives from IT can significantly limit a company’s capacity to reap the full benefit of its technological potential.

“Often the most competent technical person is promoted to CIO. Little thought is given to whether that person is prepared to think and interact in business terms.”

Your company’s CIO, Chief Digital Officer (CDO) and other IT leaders need collaborative skills as well as deep technical knowledge. They must have adequate business acumen and broad knowledge of the company and its industry. Require your IT leaders and their business counterparts – chief-level executives and division heads – to meet monthly – and even more frequently at the beginning of their tenure.

Chief Information Officers should communicate about the company’s challenges, progress and goals to their colleagues at the right level so IT addresses relevant issues before they become problems. When issues arise, CIOs should ask CFOs and other executives for guidance so that the IT and operations teams can solve problems collaboratively. Finally, the CIO or CDO should have the confidence and clout to challenge the CEO and other executives when the requirements they desire clash with IT’s limitations or spark other issues.

Business leaders should develop a basic understanding of digitization projects.

While non-technical leaders don’t need to know how to code like computer scientists, they should view their IT staff members as more than just problem-solvers who deliver their required solutions from a “black box.”

“Knowing the fundamentals of information technology and staying on top of new developments has to be part of the job description for every key executive in a modern company.”

Your IT and business teams must adopt productive communication practices. However, it often takes a tech-savvy CEO to bring IT and business leaders together to see the big picture, coordinate their work and maintain their momentum. Such a CEO can play the pivotal hands-on role of a symphony conductor or, better yet, a movie producer. At the same time, the CEO, assisted by other C-suite executives, must establish a framework that fosters continuous, straightforward collaboration. This approach should focus everyone on increasing the company’s earnings through how they perform in their role.

Mature as quickly as you can through the “four stages of IT leverage.”

As you advance through the four stages of IT leverage – crawl, walk, run, fly – stay focused on your overall objectives and make sure your firm remains aligned with the dynamic nature of its evolving markets:

1. Crawl – About 80% of midsize organizations stay at this least-developed stage of IT maturity. They use IT for basic operations like accounting, internet access and email. Their IT departments mainly provide support, and the IT budget often appears as an overhead expense. These firms may embrace efficiencies, like quicker information retrieval and digital communication, but they don’t make optimal use of IT. They struggle with internal systems, hindering access to crucial information such as inventory levels or project status. These companies risk falling behind their more advanced competitors.
2. Walk – Between 10% and 15% of companies reach this stage, where they leverage IT for growth, especially in sales and marketing. They employ CRM systems to centralize customer information and improve sales strategies. In retail banking, for example, CRMs aid in relationship-building and product promotion.
3. Run – These front-runners – no more than 5% to 10% of companies – use IT to reduce costs and enhance efficiency, leading to significant bottom-line improvements. Their digital marketing campaigns and customer experience strategies are sophisticated and effective. By combining outsourced IT services with a streamlined internal team, they can upgrade their systems continually to maintain a competitive edge.
4. Fly – At this pinnacle of digital maturity, leaders think strategically. They stay on top of technological advances and leverage them for growth. Netflix exemplifies this stage: It began by mailing DVDs to rental customers, but it foresaw the shift to streaming. Its transition to content creation and data-driven audience targeting further showcases its ability to stay ahead of the competition by innovating and proactively adapting to technological changes.

Companies often stagnate between the crawl and walk stages of maturity.

Organizations that can’t begin to leverage IT are akin to a kayaker clinging to a boulder, afraid to let go and paddle through rough waters. This approach is unsustainable. Just as static equilibrium in a market is a myth, companies cannot afford to seek refuge in inaction. They must navigate through challenges, continuously adapting and moving forward.

“The smartest companies are proactive. They play to win instead of trying not to lose.”

In the past, corporate survival mode meant taking a defensive, bare-bones approach – cutting costs, closing branches and shelving growth ambitions to focus on core business and existing customers. This approach still has some elements of value. During a crisis like a recession or a pandemic, being defensive may provide a temporary respite for companies in dire straits. However, this strategy leaves you vulnerable to competitors who continue to advance.

Instead, leading companies take a proactive, ambitious approach to IT and digitization. They focus on winning, not just avoiding defeat, and they take preemptive measures. They expand beyond their current scope, seeking new customers, markets, revenue sources and ways to enhance their existing assets. Their strategies evolve with the times, making the organization itself a moving target and, therefore, less susceptible to competitive threats. Importantly, these companies intertwine their strategies with advances in IT, stay vigilant about potential IT threats and harness new IT opportunities.

Define an IT strategy and consider new IT, like AI.

AI has become affordable and strategic for business use. It can process vast volumes of data. Over time, this improves analysts’ ability to identify statistically significant patterns. Intelligent use of AI enables detailed, individualized customer analysis to enhance your marketing. For example, Lenox, a home security device company, used AI to reduce customer attrition from 17% to 9% annually, boosting its earnings by about one million dollars each quarter. Additionally, its direct-to-customer sales, initially just 4% of its total sales, grew to more than 21% of sales, fueling corporate revenue growth without proportionally increasing debt.

“Information technology changes everything about every business. And it keeps on changing things.”

If you face internal threats, such as unsustainable business or sales models, identify and fix them before they crush your company. Such problem-solving requires new IT strategies. First, divide major projects into manageable, measurable phases. Start with essential, value-adding steps and expand. When you change your sales methods, use AI to develop a deeper understanding of your customers and prospects.

A well-thought-out IT strategy is crucial, but it must align with your strategic business goals. Explore how digital technology can address threats, solve problems and create new opportunities. Every digital initiative must aim to increase earnings. Often this means achieving short-term gains while targeting and planning for long-term advantages.

Assess your current use of IT and develop a vision for its optimal use.

To understand IT’s potential in evolving markets, use other companies as your benchmark. Your crucial goal is to stay apace – or ahead – as industries change and new competitors emerge. Many midsized companies have not yet fully leveraged IT’s commercial advantages. They are stuck at the “crawl” level of maturity. If that’s your firm, improve your position by accelerating internal collaboration on making full use of IT.

“IT has changed, and continues to change, every aspect of every human ecosystem.”

Developing a vision for IT use does not mean becoming your industry’s most IT-intensive company. Approach digitization selectively; focus on customer needs, marketing, sales and costs. Envision a future where IT is a critical enabler of your corporate goals. Obtain full executive buy-in for your vision. Then begin executing it by dividing the IT processes ahead into manageable projects with short-term goals gauged by measurable milestones.

About the Authors

Founder Bhopi Dall and president Saurajit Kanungo work together at CG Infinity, an international IT consulting firm that helps mid-market leaders leverage IT for innovation and competitive advantage.