Digital transformation and commercial excellence come with complexities, but that doesn’t have to deter your organization from making important changes. Israel Rodrigo, Business Consultant at Vendavo, explains the importance of alignment in change initiatives, the shift from IT to business-led technology projects, and the inevitable power struggles and politics that can arise.
Over more than a decade in digital transformation, I’ve spent a lot of time working with various organizations to shape their future in commercial excellence. Most teams agree that change is necessary, but they often have different views on the desired outcomes, essential tasks, ownership, and clear goals.
This can lead to conflicts and reveal hidden agendas.
Technology is becoming more accessible, so business partners – not IT departments – are now leading technology initiatives, especially in pricing projects. This shift can sometimes bring power struggles and politics into play, adding another layer of difficulty to achieving project success.
Does this sound familiar to anyone?
Let’s explore business-led IT and its impact on growth and profits.
Struggling with change management in your organization? We created the Business Process Improvement Guide to help.
The Role of IT in Business-Led IT Initiatives
Historically, IT-led projects have consumed a lot of time and resources but delivered little tangible value to business owners. It’s been rare to hear business owners rave about the benefits of an ERP implementation on their jobs or bottom line.
Pricing and commercial projects are unique, and scalability, alignment, and relevance of pricing policies can suffer without business functions leading them. They can even harm the business as much as not having a robust ERP would.
So, where does this disconnect start?
Here are a few main reasons for the misunderstanding and misalignment between IT and business functions:
- Lack of alignment between IT and business agendas
IT often misses the benefits of business-led tech projects, even though business owners are in the best position to use tech to reach their goals.
- Business owners overstepping
IT often finds that business partners are using duplicate technologies and ignoring factors like integration, scalability, and suitability, which wastes time and resources.
- Business owners often overlook risks
Business owners, excited about their tech projects, might miss potential negative impacts. On the other hand, IT is often seen as too cautious and skeptical about these projects.
- IT budgets not designed to support business-led IT
Business-led IT needs support from IT teams at various stages, but traditional IT budgets assume IT handles everything from the start, including operations and maintenance.
Understanding these challenges is key to bridging the gap between IT and business functions. It’s important to also look at business-led tech initiatives from an IT perspective, showing how IT can support and enhance these projects for better alignment and success.
The Role of a Business-Led Technology Initiative, from an IT Lens
CIOs are recognizing that business-led IT spending is a healthy practice that should be encouraged and supported. But how can you regain business alignment while focusing on the value driven to the organization?
In large organizations, you need clear boundaries between IT and business functions to prevent overstepping and misunderstandings. Clear boundaries ensure each side can use its expertise without interfering with the other, avoiding conflicts and inefficiencies.
For example, I heard about a company that planned to build multiple solutions for the same problem to mitigate risk, only to cancel one halfway through the project. To avoid such situations, it’s crucial to define a proper transformation strategy and roadmap.
Here’s a practical checklist for a successful rollout:
- Assess the current state
Identify all customer touchpoints, from sales opportunities to order processing, discount policies, and claim handling.
- Define capability mapping
Create a realistic map based on the value delivered to the organization, including customer-triggered value streams and stakeholder interactions.
- Include organizational mapping
Use business architecture to create a cross-functional blueprint, recognizing that processes based on business value may not align with specific business units or geographies.
- Incorporate business workflows
Extend business architecture mapping to include current and future IT architecture, highlighting software solutions that automate features and capabilities.
- Challenge the status quo
Use the gap between your current and future state designs as an opportunity to address issues and improve scalability.
- Build a pricing transformation roadmap
Prioritize based on business value, simplifying the process once all business needs are identified.
- Establish an IT deployment foundation
Map underlying systems and processes, focusing on standardized processes and legacy system transformation, always anchored on business value.
Understanding these steps is key to bridging the gap between IT and business functions. Now, let’s explore how to ensure the right level of collaboration between IT and business teams to drive successful outcomes.
Ensuring the Right Level of Collaboration
Here are some recommendations for how IT should work with the business to ensure the right level of collaboration, energy, and drive:
- Rethink the relationship
As business owners take the lead on tech decisions, IT should focus more on adding value rather than following rules. IT roles are evolving into advisors and coaches, working closely with frontline employees, customers, and partners. IT staff need strong communication, negotiation, and teaching skills to collaborate effectively.
- Redefine IT’s role
IT should be involved from the start, but often joins after business leaders have already tested solutions. The one-stop-shop model no longer works. IT needs to balance resources across different approaches and provide early advice, even if they tend to be cautious.
- Align efforts with business goals
IT should help business partners make smarter tech decisions by aligning services with business value outcomes. This means shifting from a “veto” mentality to actively providing advice.
- Shift risk responsibility
As business leaders make more tech decisions, they must also take on more responsibility for the associated risks, which were previously handled by functions like Legal, Audit, and IT.
- Change the IT mindset
CIOs must foster a new IT climate that is risk-tolerant, collaborative, adaptive, and focused on business value outcomes. Without this shift, IT risks being seen as an obstacle rather than a helpful solution.
By embracing these recommendations, IT and business teams can work together more effectively. The right partner can help put you on the right path and identify all the ways your organization can work toward – and achieve – lasting growth and profitability.
How Vendavo Can Help
Vendavo has been powering the profit transformations of global manufacturers and distributors for more than 25 years. A successful profit transformation requires unified pricing, selling, and rebate management – and that’s what Vendavo does best.
Ready to start your profit transformation? Reach out today to request a demo or speak with an expert about your business needs.