How Does IT Develop 'Business Intimacy'?

IT organizations focus on the business needs they understand, not on the ones that matter to business.

                          Alexcullen        When we ask business execs and IT execs the same questions around the importance of technology to business goals, and how well IT does supporting those business goals, we get interesting results. First, business and IT see technology’s value differently: to business, the greatest value is in products and services, and in competitive differentiation, whereas to IT, the greatest value is in improving operational efficiency. But the second result is more interesting:  both business and IT believe IT doesn’t do well supporting the business goals around products and services, or differentiation – but IT believes they do much worse than business believes they do.

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Is this modesty, high expectations by IT, or something else? I believe the answer is that this difference in perceptions is because IT doesn’t know what business is seeking or expecting for these two goals. This is combined with low expectations from business leaders: ‘IT doesn’t do much in this area, so we don’t expect them to do much and are more-or-less OK with what they do.’ 

I’d like to propose a new term that embodies a new relationship between IT and the business it is part of: ‘business intimacy.’  'This term is derived from the concept of ‘Value Discipline’ as described by Michael Tracey and Fred Wiersema in their book “The Discipline of Market Leaders.” They define three ‘Value Disciplines’: Product Leadership, Operational Excellence, and Customer Intimacy.  Operational Excellence is about streamlining operations through process, and managing supply to efficiently meet demand. Low cost is a hallmark. Customer Intimacy is about understanding needs, delivering customized products to meet the needs, and thinking about how to materially improve the client’s business. ‘Business intimacy’ is this concept of customer intimacy, but turned to how IT works to identify opportunities for improving the business.

IT doesn’t follow a ‘business intimacy’ strategy today, but rather one of operational excellence. Where IT organizations try for business intimacy, such as with Relationship Managers, they subvert these functions by making them the interface into their operationally efficient processes, rather than a customer-centric function delivering customized solutions which materially benefit their businesses. And there is good reason for this: Tracey and Wiersema point out that an organization can’t be more than one value discipline without becoming mediocre at them. 

An obvious conclusion from this is that if a CIO wishes to pursue a strategy of business intimacy, they can’t have their current operational excellence organization do this. They have to create a new organization, with new goals and a different culture to do this. This organization must have the ability to source ‘complete solutions’ to business needs – it’s more than just relationship managers. This organization may become the new “Business Technology” organization.

What do you think? Is Business Intimacy a useful way to think about this? Can both Operational excellence and Business Intimacy exist in the same organization? How would you build this Business Intimacy?

Comments

re: How Does IT Develop 'Business Intimacy'?

What is the best way to measure business intimacy?

re: How Does IT Develop 'Business Intimacy'?

It seems to me that if IT organizations functioned properly they would already be doing this. Doesn't adding a Business Intimacy organization just add another mediating step between the solution provider (IT# and the customer #Business)? Almost like an internal reseller. Instead I would expect the IT organization to properly frame, sell, and develop complete solutions.The reality? Not many IT organizations do this well, or at all.Chad

re: How Does IT Develop 'Business Intimacy'?

Business Intimacy as a term won't catch on as a term because it's fraught with too many connotations that can be too easily misapplied. Also, BI is already taken as an acronym. IMO, the idea you envision as Business Intimacy is a role, not an organization, and it wouldn't gel as an organization or discipline within an enterprise. I agree that it's important for CIOs to hold this role (along with others). IMO, CIOs and IT organizations are best hidden seamlessly within the business, and are measurably successful when they can point to business-identified objectives that they have successfully addressed via IT/CIO identified outputs and actions. IE, when business decides to focus the coming year on a goal (take improving ad revenue as an example), IT/CIOs are right there with strategies and tactics and applications that will be applied in specified ways to help meet that goal. Some parts of IT infrastructure may be measurable too.

re: How Does IT Develop 'Business Intimacy'?

how to measure business intimacy? one metric i think is interesting is the SNA (soc net analysis) of communications and connections between IT staff and business staff. ie, how reciprocal is the flow of email/messages between the units; measuring change over time in the desired direction(s). ie, is email more uniformly from IT staff to other business units? primarily within the IT dept? predominantly incoming vs outgoing? classification of kinds of communication help too: are most emails to/from IT support requests/replies? is there an adequate number of communications by/with IT staff on strategy/planning questions? on topics like KM and business value?