In the past several years, IT-led teams have found numerous new ways to streamline business processes in order to improve operating efficiency and reduce costs. Now corporate leaders are expounding a new role for IT: enabling revenue generation for the business.
Through the use of the right performance metrics, IT capabilities can be structured to support both revenue generation and cost reduction. A flexible structure called Service-Oriented Architecture (SOA) will be the basis.
What does this mean and how can it happen? There are five primary areas in which IT will become indispensable.
- Customer Relationships
- Technology will enhance the customer experience
- Technology will boost the number of dollars spent by customers
- Customer Knowledge
- Technology will enable the company to understand who their customers are
- Technology will track the needs and desires of the potential customers
- Product Development
- Technology will improve product development by decreasing time spent
- Technology will aid in the origination of new product or service ideas
- Product and Service Sales
- Technology will facilitate the launch of new products and services
- Technology will become part of the means of advertising and selling through new channels
- Partner Development
- Technology will help identify possible partnerships to enhance products or services or the delivery of products or services
- Technology will be the means of enabling those partnerships
Many companies are still structured with an IT team as totally separate from other teams such as the product development team or sales team. In the future, successful and growing companies will integrate IT staff within each business unit. And company executives will need to work closely with the IT team if revenue generation and cost cutting are to occur.
One of the biggest changes in the IT team in the future will be in the personnel. Many company executives feel it is important to have senior IT managers who have both business and IT experience. Further, they want the majority of their IT employees to have previous experience in business functions as well as IT. In turn, this could elevate the CIO to a Board position.
IT success will be measured most frequently by looking at its contribution to revenue growth. However, in today’s changing markets, another major test of IT’s success will have to do with its ability to help the company become agile in adapting to changing needs. And, as always, in order to realize profits, or greater profits, the company must measure its IT’s success through cost reduction.
