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Striking the Balance, Innovation versus Operational Excellence

Innovation Executive Forum | Posted on November 13, 2018 by Karen Bader

Sometimes it’s tough to be a CIO.

On one hand, the business wants transformative initiatives that speed-up time-to-market, automate core processes and improve connections with the customer. On the other, they insist that IT continue to “keep the lights on” at maximum efficiency.

The IT leader must be dynamic – steering the organization’s adaptation to the changing marketplace. At the same time, they must be vigilant – safeguarding the organization from risk. Striking the right balance between innovation and operational excellence is among the biggest challenges facing IT leaders today.

At our recent Innovation Executive Forum (IEF) event, we hosted IT executives in Toronto to discuss the ways they “live the strategy” that balances pioneering with pragmatism. We share some of their best insights in the paper below.

Embrace Your Inner Cyrano

Today, many IT departments aspire to be at the forefront of innovation.

But when “operational excellence” is the top priority, institutional resistance can serve as a foil to digital transformation. For many IT leaders, balancing innovation and operational cost – and selling that balance back to the business – is an uphill battle.

One of our guests representing the manufacturing sector explained the mentality sometimes adopted by executives on the business side makes it harder for them to understand the balance of supporting the day-to-day functions while at the same time trying to transform.

Often, institutional knowledge builds up over time. Organizations get stuck on one way of doing things. The result? IT leaders encounter passive resistance to innovation as not everyone embraces change.

“Adoption is one thing. Adaptation is another,” lamented one guest. Getting the organization to change its mindset often proved more difficult than building consensus around a specific tool.

Another attendee in Toronto described their approach:

“I co-sponsor absolutely every initiative with an executive peer.”

In this scenario, the IT leader acts as a Cyrano de Bergerac, selling the vision of digital transformation initiatives through a business-side representative who can sell the operational excellence angle. “Because if it comes from us, it’s a non-belief, right?”

Our guests agreed it’s difficult to be front-and-center as CIO. Instead, the IT leader must be more of a trusted advisor and team player when it comes to technology. It’s also important that the IT leader builds the “private equity” value of IT within the organization.

“No one is going to parade you (the CIO) down the street on their shoulder, but they will parade your executive peer – which is okay.”

Don’t Be Afraid to Get “Ruthless!“

Technology promises to make our lives easier.

But change for its own sake helps nobody. As technology has evolved, the number of tools, capabilities, and solutions has expanded. In recent years, artificial intelligence (AI), internet of things (IoT), machine learning and many more have entered the playing field.

As one guest in Toronto put it, “We keep hitting the ‘More’ button.”

This has helped to solve a lot of business problems. But it’s also left IT departments and their users inundated with options. Many tools and features roll out only to receive poor adoption. In turn, IT has had some uncomfortable conversations with the business about adoption and consumption.

To counteract this effect, some of our guests have adopted a philosophy of ‘ruthless simplification.’ The philosophy calls for rationalizing infrastructure, tools, and processes to identify and isolate those changes that contribute to operational excellence.

This process also applies to simplify the delivery of services to end users. For one attendee in Toronto, the biggest focus is on streamlining and simplifying the end customer experience. To this end, they applied a simple formula.

“User interface (UI) plus user experience (UX) equals customer experience (CX),” he explained. “Developers, they develop based on their own thought processes, not other people’s eyes.”

Without a consistent focus on the end user, new applications may frustrate users and receive poor adoption. When those users are external customers, this becomes a serious problem.

“One of our roles is to maintain that operational excellence in the face of putting in new technology,” explained one IEF member. “Even though we want to drive that.”

“It’s really trying to decide what are those few things that move the needle,” added another attendee. Anything else is excess.

*Gasp* Amnesty for Shadow IT

In the rush to solve business problems, sometimes lines-of-business (LOBs) take technology into their own hands. Often, they fail to communicate with IT or collaborate with the rest of the organization. Instead, they go and buy, what they think is the next “silver bullet.”

The resulting “shadow IT” – technology operating without the endorsement overview of IT – is a major threat to compliance and security. As such, “killing shadow IT” was a major focus of the IT department in the past.

Today, one attendee in Toronto has taken a provocative stance on the issue. “We offer shadow IT-as-a-service,” the member explained.

“Because you know what? They’re going to do it anyway.”

The member reasoned that LOBs would likely select, purchase, and use non-sanctioned cloud solutions regardless of IT warnings. In some cases, the offending parties may not realize IT runs a similar solution for another department. In fact, many shadow IT purchases may stem from good, transformative ideas.

Often, when aligned with the organization’s overall IT concepts and thought processes, these solutions have a positive impact across the organization. As the member put it:

“We’re not the only idea drivers, right?”

Either way, it’s likely that IT is better equipped to run these unsanctioned solutions – and ensure they don’t compromise security. IT must still take the initiative to protect the business from making mistakes and putting critical data at risk.

“So,” explained the member, “I run, every second Tuesday of the month, amnesty – bring your guns (technology) and drop them on my desk.”

Final Thoughts

Below is a recap of some of the key insights from our participants:

  • Balancing digital transformation with operational efficiency is a key challenge for IT
  • Sometimes, the IT leader must turn to peers in the business to sell the vision for change
  • Excellence often requires a ruthless approach to deciding what’s needed – and what’s not
  • Ruthless simplification includes taking a streamlined approach to the customer experience
  • Shadow IT is often perceived as the enemy, but embracing it can lead to transformation

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