In today’s highly connected, always-on world, the role of IT is more important than ever before—and it’s changing the face of organizations of every size, across all industries. Because of its importance in all businesses, it’s crucial that CIOs remember that technology is generally not an organization’s core competency. Consider the following five organizations and industries and their main functions:
Government: Protecting, engaging, and serving communities and citizens
Healthcare: Providing access to quality services and preventing disease
Retail: Selling merchandise to consumers
Banking: Providing financial services and solutions
Manufacturing: Converting raw materials into finished goods
In each of these examples, IT is critical in achieving the end goal, but it’s not the core competency; rather, it’s there to support and improve the core competency.
To truly earn a spot in the C-Suite, CIOs need to stop thinking of IT as the be-all and end-all of the company, and instead view the department as a contributing force within the organization that delivers business value by performing some, or all, of the following functions:
Differentiating from competitors
Improving customer/client service
It’s important to note that all of these offer financial value, which is where CEOs and CFOs tend to set their sights.
Five Ways IT Can Add Business Value to an Organization
Differentiating from Competitors
Technology can often differentiate one organization from another, enabling them to more effectively compete and providing an advantage when selling products and services. It can also keep them on the cutting edge, as those that fail to evolve may go the way of the dinosaur. In fact, 88% of the Fortune 500 firms that existed in 1955 no longer exist today.
For example, a manufacturer adopting Internet of Things technology may be able to improve product quality and earn themselves new business; a healthcare provider may embrace the cloud, enabling staff to communicate with patients before, during, and after a procedure or visit; and a bank may utilize an app to allow mobile check deposits, attracting new customers through convenience.
Improving Customer/Client Service
Studies show that it costs five times as much to attract a new customer or client than it does to keep an existing one. Unfortunately, in the quest to land the next big deal, many companies may forget about those they’ve already got in their pocket—which is a major source of revenue.
One of the best ways to maintain existing clients is to continuously improve service and satisfaction levels. This could take on many forms, such as:
Providing mobile access to accounts for ease of use.
Using AI, such as chatbots, to provide quick and easy answers on messaging platforms.
Managing customer relationships with sophisticated data-gathering tools, such as customer relationship management software.
Breaking from the IT silo to provide information across all customer and client touchpoints to create a more seamless experience.
Technology has the power to greatly improve an organization’s productivity, and there are countless testimonies on how it has helped organizations achieve more for less. Migrating to the cloud is one way organizations are boosting their productivity. Deployment duration times are reduced, so employees can spend less time waiting, and more time working. Plus, a reputable cloud provider can offer greater uptime; if servers go down, employees may not even notice—or will only be sidelined for a minute or two.
The cloud also increases collaboration, which positively impacts productivity. It gives employees access to files and documents from anywhere, at any time (with an internet connection). This allows remote employees to work seamlessly with others, in real time, whether at home, on the road, or overseas. Plus, collaboration technologies through the cloud have been shown to increase productivity by as much as 400 percent!
While technology may sometimes have an upfront cost, it can quickly pay off in the long-run. Consider how teleconferencing can eliminate expensive travel costs, allowing for communication around the globe without leaving the office; or how business-to-business integration can reduce overhead costs and eliminate human handling, such as sorting and circulation of mail, clerical document preparation, and data entry. Now think about savings in terms of the cloud.
The cloud reduces or eliminates CFO-hated capital expenses (CAPEX) by using a provider’s servers, software, power, cooling, and more. Organizations save due to economies of scale, splitting the cost with thousands or millions of other users. When it’s time to scale up, new equipment does not need to be purchased; just a conversation with the provider to request an increase. If an organization is on a consumption-based billing plan, they’ll just pay a little more each month for the extra capacity; on a level billing plan, payments will remain the same until it’s time to reconcile at the end of a 12-month period. Additionally, a cloud provider can typically have an organization up and running again mere seconds or minutes following an incident; an inexperienced internal IT team, however, could take hours to do the same. Read our story, Top 5 Dangers of IT Downtime for Your Company, for more.
The four sections above go hand-in-hand with helping to increase revenue. But perhaps the biggest way technology can increase revenue is through increased interaction with other departments. IT’s reach is company-wide, touching marketing, accounting, human resources, purchasing, production, R&D, and more. By embracing new technology or cloud computing, the IT team can turn their time and attention from managing technology to developing new innovations or processes that financially benefit all facets of an organization.
To get the C-Suite’s buy-in when it comes to adopting new technology or increasing the IT budget, every recommendation a CIO makes should always offer business value in one way or another to justify the expense. When it doesn’t, new ideas are likely to be shut out, and budgets are likely to tighten up. By making sure any new initiative taps into one of these five benefits, CIOs stand a better chance of getting the results—and the respect—they want.