IT-Enabled Business Innovation: A Missing Link?


Power Information technology is enabling business innovation through new types of product and service, transformed business models and improved lives for customers, consumers, shareholders, employees and citizens.

For example, when Sam Walton famously recognized the competitive advantage Walmart could gain by ‘turning inventory to information’ he was experiencing (and then acting upon) an insight that would innovate supply chain management for big box retailers and, ultimately, for retailing in general. When Max Hopper‘s team at American Airlines recognized (and then acted upon) the power of yield management as a means of dynamically pricing airline seats based upon supply and demand, he created a competitive advantage that put promising low-cost airlines such as People Express out of business. When Jeff Bezos recognized (and then acted upon) the opportunities in reinventing online retailing for an exceptional customer experience, he created a new buiness that today captures $75 Billion per year of retail business and continues to innovate products and services.

These are examples of “big” IT-enabled innovation, but smaller examples appear all the time. Domino’s Pizza reversed its slumping performance in large part by making online ordering a cornerstone of its business through its web-based tools such as voice ordering, Pizza Tracker, 3-D Pizza Builder, and Pizza Hero tools.

Stories such as this appear frequently — though not as frequently as one might hope!

What Limits IT-Enabled Innovation?

With the emergence of all sorts of innovation enablers, such as the “Internet of Things“, inexpensive ways to identify and locate objects, people and places, powerful analytical capabilities, wearable technology, agile methods, smart phone apps, and so on, why does it seem that most businesses, government agencies and organizations of all sorts are stuck in the last century? Why does IT-enabled innovation always seem to refer to “over there?”

I’ve been fortunate in my career to be involved in IT Management research and learn from many talented academics and practitioners. One multi-company research study into IT-enabled innovation about ten years ago highlighted three key success factors:

  1. A clear and compelling ‘innovation intent.’
  2. An effective channel and structures that bring together business need/opportunities with IT capability/possibilities.
  3. An effective process for filtering, refining, testing and deploying innovation opportunities.

Business Relationship Management — A Missing Link for IT-Enabled Innovation?

The skilled and properly positioned Business Relationship Manager (BRM) can help inject the success factors identified above.  For example:

  1. As ‘demand shapers’ the BRM helps stimulate the business appetite for innovation. The skilled BRM uses techniques such as Value Network Analysis, Scenario Planning, Appreciative Inquiry, Competitive Intelligence, Bibliometric Analysis, and Capability Gap Analysis to help establish innovation intent.
  2. As ‘demand surfacers’ the BRM discovers innovation opportunities using techniques such as Design Thinking, Brainstorming, Knowledge Café, Synectics, Why-Why Diagrams, Behavioral Prototyping, Mind Mapping and Storyboarding.
  3. With their focus on business transition and value realization, the BRM helps deploy innovation opportunities using techniques such as Design Structure Matrix, Force Field Analysis, How-How Diagrams, Stakeholder Mapping and Analysis, Organizational Change Management, Business Experiments, Rapid Prototyping and Agile Development.

So, if you are in a BRM role, become knowledgeable in Design Thinking (see my 3-part post on Design Thinking here, here and here) and the disciplines and techniques of business innovation. Understand how innovation can create business value in your context. Of course, this means truly understanding your business partner’s business model, business processes, marketplace, competitive strategies, and market forces. It also means knowing the key stakeholders and influence leaders — where is innovation thinking taking place in your organization? How well connected are you with the innovation thought leaders? How are you learning about innovation in your industry? How are you keeping up with IT-enabled innovation?

So much to do — so little time — no time to waste!

 

Image courtesy of Business 2 Community

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Value-based Business Relationship Management: Part 3


valueThis is the third and final post in series about business value realization and the role of Business Relationship Management.

In the first post I described what it means to realize business value and how business value can be influenced through the Business Relationship Management (BRM) role. In the second post, I classified BRM activities into Relationship-centric and Process-centric activities and discussed the results of my BRM Time Allocation Research which found that the top 3 activities where BRMs were actually spending their time were Business Support, Project Support and Communication, noting that the top two are Process-centric, and that BRMs spend over 50% of their time on Process-centric activities. I compared this with BRMs stated ideal time allocation, which would have the top 3 activities as Demand Shaping, Communication and IT Leadership, and in total, would have only 34% of their time on Process-centric activities.  I went on to discuss why differentiating Process-centric and Relationship-centric Activities is important, with the punchline:

Don’t squander expensive and scarce BRM time (and the valued time of their business partners) on activities that don’t depend upon “relationship capital”!

In this post I will drill deeper into BRM time allocation and business value realization.

Key Takeaways from the BRM Time Allocation Research

  • The BRM role is most effective when it focuses on the Customer Intimate Value Discipline for which it is optimized. Activities that are associated with the Operational Excellence discipline are better handled by IT Operations and Infrastructure, Service Management, Business Support, etc. In fact, when the BRM steps into these operational activities, they may be masking and compensating for deficiencies in needed and expected “Operationally Excellent” capabilities. Of course, the BRM must be involved in operational and infrastructural capabilities, but this should not represent the bulk of their time allocation.
  • BRMs often move into their role from more operationally focused roles. With their operational experience, they sometimes fall back into their operational core competencies as their “comfort zone” and then protest that they don’t have the time to be more strategic. BRMs coming from an operational background must fight the tendency to step back into process-centric activities, and to keep their focus on the more relationship-centric outcomes that the BRM role was designed to serve.
  • BRMs should collaborate with their business partners and IT key stakeholders in determining their most important activities and the expected time allocation for those activities. Clarity of the BRM role and expectations are critical factors in BRM success.

A Diagnostic Approach to Re-balancing Time Allocation

There can be significant value in a thoughtful analysis of where you spend your BRM time against an ‘idealized’ time allocation, and then taking deliberate actions to shift your time allocation towards a more ideal pattern. In fact, involving your business partner in this analysis can, in of itself, be revealing as to your partner’s needs and expectations, and relationship-building in working with your business partner in making the shift to a more value-focused time allocation. After all, it is not just your time you are optimizing — it also impacts your business partner’s effective use of their time. So, rule 1:

Engage your business partner in your time allocation analysis and reallocation.

Here’s a simple 8-step approach — don’t take it too literally — customize it to fit your situation.

  1. Review the BRM Relationship Activity Classification schema I presented in Part 1 of this series of posts. Customize these to fit your context and environment.
  2. Track you time by Activity for one month. Do this during what you believe is a “typical” month (e.g., don’t do this during a month that is budgeting-intensive or otherwise atypical.)
  3. Normalize the data for any seasonal, cyclical or special factors that you could not eliminate in your choice of which month to track.
  4. Rank order your activities by business value as determined by your business partner. This will, of course, be inherently subjective. In practice, it will be all but impossible to link realized business value with your activities during a given month, but simply engaging your business partner in a dialog about what activities were the most value to them can be highly illuminating and, again, inherently relationship building.
  5. Rank order your activities by time expenditure — what percentage of your time was spend on each activity?
  6. Review the biggest gaps between those activities that your business partner believes are most valuable and your time allocation. Why are you spending time on those activities that are seen to create the least value? How can you eliminate or at least reduce time you are spending on these low value activities? Of course, there will be some activities that your business partner will rate as low value that you cannot eliminate — administration or performance management of others, for example. But you may be able to find ways to reduce the amount of time you spend on these, or at least to help your business partner understand why these activities may actually be valuable to them.
  7. Validate your findings and conclusions with your Business Partner, and reconfirm the changes you plan to make to how you spend you time. Be careful — you are setting expectations, so make sure these are realistic and that you will be able to live by them.
  8. Execute your plan and monitor your time allocation against that plan. Periodically, repeat the exercise — say every 6 months or so — again, engaging your business partner in the analysis.

 

Value-based Business Relationship Management: Part 2


This is the second in a short series of posts I will be writing about business value realization and the role of IT, and in particular, the role of Business Relationship Management.

In the first post in this series, I described what it means to realize business value and how business value can be influenced through the Business Relationship Management (BRM) role. I then examined the types of activities in which a BRM engages, and classified BRM activities into two types — Relationship-centric activities that depend upon the ‘customer-intimate’ nature of the BRM-business relationship — things that could not be achieved effectively without that relationship, and Process-centric activities that depend upon robust processes, such as Project Management, Program Management, Service Management and those associated with process frameworks such as ITIL and COBIT.

How Do BRMs Allocate their Time?

I recently conducted a research project on BRM time allocation — I wanted to find out where BRMs spend their time, and where they believe they should be spending their time. Here is an analysis of preliminary data collected in late September, 2014 from 40 BRMs globally, over 75% of whom have over 1 year experience in their role, and 1/3rd have more than 3 years experience. I have emphasized the Relationship-centric activities with bold type/Apple Casual font and Process-centric activities with italic type/Arial font. To the left is the reporting of current BRM time allocation and to the right is the ideal BRM time allocation as reported by the BRMs.

BRM Time Allocation Bar Chart

Key Observations

The top 3 activities by time allocation among BRMs in this sample are Business Support, Project Support and Communication. Note that the top two are Process-centric, and that BRMs spend over 50% of their time on Process-centric activities. Compare this with their ideal time allocation, which would have the top 3 activities as Demand Shaping, Communication and IT Leadership, and in total, would have only 34% of their time on Process-centric activities.

Process-centric vs. Relationship-centric Activities – Why Is This Important?

The BRM role should emphasize Relationship-centric activities. It is essentially about the Customer Intimate value discipline — one of the three value disciplines articulated by Michael Treacy and Fred Wiersema in the seminal 1997 book, “The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market.” The primary purposes of the BRM role are to strengthen the Business-IT relationship and through that relationship, shape and influence business demand and optimize solution usage in order to elevate the business value realized from information and IT,

By contrast, activities such as Business Support, Project Support, Service Management, etc. are best suited to organizations optimized for the Operational Excellence value discipline, where the emphasis is on robust processes and continuous improvement rather than strong relationships. Any time spent by BRMs on these activities not only detracts from the Relationship-centric activities, but may actually mask dysfunctionalities elsewhere in the IT organization.

The lesson? Don’t squander expensive and scarce BRM time (and the valued time of their business partners) on activities that don’t depend upon “relationship capital”!

In the next post in this series, I will drill deeper into BRM time allocation and its relationship with business value realization.

Note: My next on-line BRMP Certification course is being held across 3 Tuesdays—November 4, 11 and 18 . For details, please click here.

 

Value-based Business Relationship Management: Part 1


agile-post-116-managing-scope-changesThis is the first in a short series of posts I will be writing about business value realization and the role of IT, and in particular, the role of Business Relationship Management.

Much of my 40+ year career in information technology, management consulting and multi-company research has focused on the relationship between Information Technology (IT) and realized business value. And when I say realized business value, I mean:

  • The executive management team fully recognizes IT value contributions, and invests in IT infrastructure and capabilities with confidence about the return they will experience on those investments.
  • They recognize that the value is real and integral to business success, even though not all that value will show up directly in traditional accounting systems. They understand that not all business value is visible through Generally Accepted Accounting Practices (GAAP).
  • They understand that business value is often a function of multiple initiatives, sometimes connected via a program management structure, but other times seemingly unrelated, with complex and often opaque cause and effect relationships.
  • They appreciate that IT infrastructure investments typically do not create realized business value in of themselves, but enable other investments that do create value. They treat them as options from an investment and value management perspective.
  • Most importantly, the executive team understands, embraces and actively engages in the management of IT value realization. They share a vision of, and a passion for business-IT convergence.

Value Through Relationships

In most organizations, IT activities typically ‘belong’ to an organization of IT professionals, while business value is realized in the “business of the business.” (I don’t recall who first used the term “business of the business” but I find it apt.) Yes, I know that many IT professionals protest that they are “part of the business.” While this is a noble position to take, and an appropriate aspiration, it is generally not the reality seen by those in line profit and loss positions.

We are seeing the emergence and formalization of the Business Relationship Management (BRM) role — a hybrid of Business Line Professional and IT Professional — with the emphasis on Business. Primarily intended as a means of bridging the gap (in some case, the chasm!) between IT organizations and their business partners, and better linking IT costs with business value, the BRM role comes in many variations. From a relatively tactical and operational focus to one more strategically and business value focused.

From my experience, the BRM role is more sustainable and has a greater positive impact on business value realization when it is strategically focused. That said, if IT supply maturity is low (unreliable IT services, poor customer experience with IT), then the tactical and operationally-focused BRM provides an essential foundation on which to build the more value-based roles and capabilities.

Relationships Through Activities

We all have many types of relationships, from casual and informal (FaceBook friends and LinkedIn connections, for example) to intimate and formal (spouses, employer-employee, for example). These relationships are instantiated and developed through activities — posting status to a social media site, celebrating an anniversary, asking for a raise, etc.

In the case of the BRM and her business relationships, activities can be categorized into two major types:

  1. Relationship-centric Activities — activities that depend upon the ‘customer-intimate’ nature of the BRM-business relationship — things that could not be achieved effectively without that relationship.
  2. Process-centric Activities — activities that depend upon robust processes, such as Project Management, Program Management, Service Management and those associated with process frameworks such as ITIL and COBIT.

Relationship Activity Classifications

Relationship-centric Activities

  • Demand Shaping — Identifying, surfacing and assessing possibilities for using IT services and capabilities. Includes strategy formulation, business/technology research, consulting, and raising business savvy about business value realization through technology.
  • Communication — Proactively informing key stakeholders about things they need to know, and being informed by key stakeholders about things IT needs to know.
  • IT Leadership — IT Leadership team meetings, leading or participating in key internal IT initiatives (e.g., process improvement, transformation).
  • Vendor Management — Working with external vendors and service providers.
  • Education and Training — Time spent in formal training (not in training others).

Process-centric Activities

  • Business Support — Responding to requests, supporting day-to-day needs associated with “running the business” and the IT capabilities that support it. These activities tend to be reactive and largely unplanned, and while necessary, often create little new business value. They exist due to IT Service Management weaknesses.
  • Service Management — A key input to Service Management regarding service strategy, design, delivery, operations, or improvement.
  • Project Support — Activities associated with specific business-IT projects (funded initiatives).  Effective Project Management processes should reduce the amount of Project Support needed from BRMs.
  • Administration and Professional Development — Activities such resource management, time recording, professional development of others (supervision, coaching, training others, performance management).

From Activities to Time Allocation

I recently conducted a small research project on BRM time allocation — I wanted to find out where BRMs spend their time, and where they believe they should be spending their time.

My next post will examine the preliminary data collected in late September, 2014  from 40 BRMs globally, over 75% of whom have over 1 year experience in their role, and 1/3rd have more than 3 years experience.

Note: My next on-line BRMP Certification course is being held across 3 Tuesdays—November 4, 11 and 18 . For details, please click here.

 

How Do You Optimize IT Capabilities for Business Value?


Value Disciplines

In their groundbreaking book, The Discipline of Market Leaders, published in 1997, co-authors Michael Treacy and Fred Wiersema argued that companies that have taken leadership positions in their industries have typically done so by focusing their strategy on one of three value disciplines, and optimizing their business operating models accordingly. They don’t ignore the other two value disciplines — they must meet industry standards in all three disciplines. But they lead in, and optimize for one value discipline, be it operational excellence, customer intimacy, or product leadership.

If we think of an internal IT organization in business terms, it becomes clear that IT infrastructure and operations are optimized for Operational Excellence, and that enterprise architecture and solutions delivery should be optimized for Product Leadership. This begs the question, what of Customer Intimacy?

How Can an IT Organization Achieve Customer Intimacy?

Many years ago (and even today in some companies) business leaders achieved Customer Intimacy with their IT capabilities by establishing their own, dedicated IT organizations. Over the years, as IT became an increasingly large chunk of business budgets, IT organizations transformed to gain advantages of scale by consolidating their IT capabilities into centralized shared service organizations. These tended to be optimized for Operational Excellence, consistent with the “lowest price and hassle-free service” promise associated with the business case for centralization.

For many such centralized, shared service IT capabilities, however, the Customer Intimacy value discipline was subsumed under the pressure to take out cost and be operationally excellent. The business customer of the IT organization could have anything they wanted, as long as it was consistent with the enterprise IT infrastructure and drew from the portfolio of standard enterprise solutions. In other words, as long as one size fits all! As business leaders stepped up to the competitive plate, trying to get ever closer to their customers, their IT organizations, in the name of defensible cost structures, were moving further away from their customers!

Enter the Business Relationship Manager!

In today’s leading IT organizations, the Customer Intimacy value discipline is being restored through the emerging role of Business Relationship Manager (BRM) — charged with driving business value from information and IT by getting close to their internal (and external) customers and, to paraphrase Treacy and Wiersema, by “delivering what specific customers want” and by “anticipating needs.”

All well and good — as long as IT infrastructure and operations live up to the Operational Excellence value discipline. When Operational Excellence is lacking, internal customers are typically reluctant to engage their BRMs in strategic exploration while basic operational issues (metaphorically, “lights on and training running on time”) are disrupting business operations. So, what is the BRM to do?

Plug the Holes, or Call for Improvement?

With many BRMs transitioning into their role from other IT disciplines, including Service Management and Project Management, there is often a strong temptation to step up to the plate and compensate for the deficiencies in Operational Excellence. There are several traps inherent in this strategy:

  1. When the BRM steps into an Operational Excellence role, they are taking time and energy away from their Customer Intimacy role — they tend to become part of the problem their role was established to address.
  2. When the business partner sees their BRM in an Operational Excellence role, the BRM may have a hard time either establishing or sustaining a relationship based upon strategic insight.
  3. By ‘masking’ the operational issues, the BRM is essentially ‘colluding with dysfunctional behavior’, potentially weakening the forces for operational improvement.

A Better BRM Approach for Addressing Operational Issues

Rather than falling into the ‘collusion’ trap, an effective BRM leverages their influence and persuasion skills and their competencies in organizational change management by stepping to the role of Change Agent for improved IT operations and infrastructure. They fearlessly call out process issues by:

  1. Gathering and presenting data that highlights process issues and their implications — always focused on the process, rather than the people.
  2. Offering to help fix the process issues — volunteering their business customer perspective, facilitation, process management, organizational change management, or whatever competencies they can bring to the table.
  3. Creating synergistic “foxholes” with their IT colleagues by establishing (or reinforcing) shared goals, common enemies (such as poor process, rework, dissatisfied business customers) and mutual dependencies.

Know and Lead With Your Customer Intimacy Value Discipline

When you get sucked into operational issues, you may find yourself in a role that is inconsistent with your main mission — it might feel good, heroic even — but it’s not what the BRM role is really about. Operational issues should be solved in those organizational entities that are optimized for Operational Excellence — IT infrastructure and operations.

 

Note: You can learn more about the techniques discussed here — and much more in my next on-line BRMP Certification course. This is being held across 3 Tuesdays—November 4, 11 and 18 . For details, please click here.

 

How Can Business Relationship Managers Redirect Their Efforts for Increased Business Value?


Time-is-Money2_reneequim.com_This post is for those with a substantial Business Relationship Management (BRM) role — i.e., at least 50% of their job is BRM.

I am part way though a research project that is examining where BRMs are spending their time, and where they think they should be spending it. (If you would like to be part of this research, and receive a free copy of the research report “BRM Time Allocation Patterns and Ways to Improve Them” please respond to the survey. The survey will stay open until October 1, 2014.)

I will be reviewing the research in an upcoming free webinar entitled, “A Day in the Life of an Effective Business Relationship Manager” to be held on October 3, at 11am ET. For details, please click here.

Preliminary Results – BRMs Want to Change Their Time Allocation!

Of all roles, the BRM seems to be most prone to being dragged into directions that are not seen to be valuable. There are several reasons for this:

  1. “Urgency” always seems to trump “valuable.” If you have not contracted with your key stakeholders around how the role can and should work in order to deliver the highest business value, then your day will be largely spent dealing with operational and largely tactical issues. You might feel like a hero at the end of the week, but you business partners and key IT stakeholders will likely not see you that way.
  2. Without explicit outcomes defined, any activity seems worthwhile. We easily confuse “busyness” with “effectiveness.”  In the heat of the moment, these things can feel the same — but they are not!
  3. Under stress, we fall back on our core competencies. If we were successful project managers before we were BRM’s, getting “dragged into” project management activities is an easy trap to fall into. I wish I’d had $10 for each BRM that has told me, “I don’t have time to be strategic — the tactical demands consume all my effort and energy!” Deeper assessment and reflection usually reveals that the lack of time to be strategic is self-inflicted — worn as a ‘badge of courage’ to display how important one is to ‘keeping the lights on and the trains running on time!’
  4. BRMs sometimes feel compelled to ‘collude with dysfunctional behavior.’ For example, Service Management might be poorly implemented, with a result that services are not clearly defined, service levels are erratic, and there is insufficient transparency into how the services work and the customer experience those services create. Rather than act as change agents to upgrade Service Management discipline, the BRM steps in to ‘mask’ the poor customer experience, or respond to service failures. This ‘enabling’ behavior might feel good to the BRM, but tends to make things worse over the longer term — and limits the time available for the BRM to take on the more valuable activities.

So, What Can BRMs Do About Changing their Time Allocation?

The first thing they must do is to classify and be aware of where there time is going, and compare that with where they and their key stakeholders believe the time should be going. This will be the key focus for my “A Day in the Life of an Effective Business Relationship Manager” webinar to be held on October 3, at 11am ET (for details, please click here) so I’ll leave this as a teaser for now.

Calls To Action

  1. Please participate in the research, and get yourself on a track to higher performance effectiveness — respond to the survey
  2. Please join me for the webinar — and be part of the change you would like to see – sign up for the webinar

 

Image courtesy of At Your Service Concierge

Does This Mean the End of the Business Relationship Manager?


endoftheworldToday, it seems that the Business Relationship Manager (BRM) role is gaining prominence, recognition and momentum.  I witness this daily through the incredible interest in and membership of Business Relationship Management Institute and through the lens of no less that 4 LinkedIn groups dedicated to the BRM role.  I also see it directly through requests for BRM training and certification, and for demand for consulting in the BRM space.

All This is Great — But What of the Future of BRM?

To gain insight into the future of the BRM role, we need to think about the past, the current state and the two ‘megatrend’ forces acting on the BRM role:

  1. The BRM role is a result of the need for an efficient, effective, value-driven ‘bridge’ between a service supplier (often an internal IT organization) and its business customers/clients.  After 50 years or so where the IT organization and its business customers lived either side of a virtual brick wall, the BRM acts as a window in the wall through which IT-speak and business-speak are translated one into the other, with the result that business demand for IT services and supply of those services is aligned based upon potential business value realization.
  2. The so-called “consumerization of IT” and the availability of cloud-based services for Software, Infrastructure and Platforms (SaaS, IaaS, PaaS) are another force that is breaking down business-IT barriers.

These forces were in many ways predicted by author and futurist Alvin Toffler, who wrote about the cleavage between production and consumption that in many ways fueled the industrial revolution, and that the technologies of the “Third Wave” would heal that breach with a rise of “prosumerism”– the combining of production (the IT organization) and consumption (the business customer of the IT organization.)  I’ve referred in previous posts to this shift in the IT provider-consumer relationship as “convergence” of business and IT.

Is the BRM Role Permanent or Temporary?

If you think through these three forces, you might be drawn to the conclusion that the BRM is a temporary role–one that over time, in conjunction with forces such as cloud computing and the consumerization of IT, tends to eliminate the need for itself.  Of course, predicting the future is always a dangerous proposition, but I personally believe that the most successful BRM’s will approach the role as though it is temporary, following a “teach them to fish” philosophy, rather than “catch fish for them.”  From my experience, when a role such as BRM is approached in this way, it tends to stay relevant and valued for a very long time.

Mutual Understanding Results in Business-IT Alignment

When there is excellent mutual understanding among the key stakeholders, businesses and their IT organizations become aligned. But the forces acting on both the business and the IT organization impact the dynamics of mutual understanding and over time it is all but impossible to keep business and IT aligned.

Empowerment Results in Business-IT Convergence

When the business is empowered with information and IT through a robust infrastructure coupled with the knowledge and skills needed to drive value from IT capabilities, the type of alignment thus gained is not only lasting, it actually strengthens and deepens over time. The BRM is key to ensuring that the information and IT infrastructure is fully appropriate and properly leveraged, and that the necessary knowledge and skills are in place.

The Moral?

Approach your BRM role as temporary–and it will be forever valued!

 

Image courtesy of A New World Society