In recent years, digital transformation has emerged as a vital imperative—and recent months have only added a new level of urgency around these initiatives. In fact, I’d argue those organizations that have been leading the way in this transformation are not only much better equipped to adapt to the fundamentally altered, pandemic-disrupted landscape we find ourselves in now—but to establish a strong competitive position that persists in the long term.
When it comes to the execution of digital strategies, internal technology teams are either leading the way or key supporters. Given the critical role these teams play, it's more important than ever that IT investments are fully and optimally aligned with key business objectives. However, that’s simply not the case in a vast majority of organizations.
A recent survey of more than 200 business executives conducted by the Harvard Business Review Analytics Services looked at connecting IT to business outcomes. The findings are available in a report entitled “BizOps: Connecting IT to Business Outcomes.” Seventy-seven percent of respondents said the disconnect between IT and business units results in significant costs. For most organizations, this disconnect has been a problem for a long time, but it’s one that will only grow more damaging moving forward if left unaddressed.
In today’s climate, the urgency around optimized decision making also continues to escalate. With so much disruption in markets, consumer habits, supply chains, and more, decisions need to be made faster, and entire organizations need to respond more quickly.
In response to new pandemic-shaped realities, leadership teams need to rethink employee services and customer engagement models. In making these fundamental changes, faulty decisions can be excessively costly, leading to poorly aligned initiatives and efforts, wasted resources and expenses, and worse.
In many organizations, teams lack formal, rigorous processes for managing data for decision making. The reality is that there is plenty of data available. Some would argue too much data. The challenge lies in harnessing that data to gain actionable insights and then trusting those insights to lead decisions. What specific data to collect and how to track and report on business value remain a mystery in many organizations?
Like many of us, business leaders will default to what their “guts” tell them, whether there’s data to back up those instincts. This reality is only going to get more problematic. Leaders continue to make decisions for the wrong reasons, for example, approving the budget request that’s made by the most vocal executive rather than supporting the initiative that has the most potential. Further, if leaders aren’t relying on hard data, they remain vulnerable to questioning and second-guessing, which can distract staff and derail progress.
The above trends are escalating the demand for BizOps. While BizOps clearly is a combination of the words “business” and “operations,” it’s something different than “business operations.” Business operations teams are focused on such areas as cross-functional management, running day-to-day operations, strategic planning, and more.
BizOps, on the other hand, is a framework for data-driven decision making. IDC analysts define BizOps as follows: “BizOps, a data-driven decision-support mechanism that connects business and technology functions together to drive business outcomes.”
Through BizOps, business and IT teams can more consistently ensure digital services are aligned with key objectives. It can also help teams establish digital infrastructures and software that provide the operational characteristics—such as scalability, responsiveness, and agility—that the business requires.
The promise of this approach has started to gain widespread recognition. The Harvard Business Review Analytics Services survey referenced above found that 86% of executives indicated that BizOps would be beneficial to their organizations. Plus, 89% of executives also said that BizOps could significantly improve decision making by enhancing collaboration between IT and business teams.
Steps to maximizing the advantages of bizops
To employ BizOps, teams need to create data-driven decision-support mechanisms that connect business and technology functions, with an eye toward achieving business outcomes. Following are several of the essential steps to most fully harnessing BizOps.
Aggregate and correlate data available
The first step is to bring together data from various areas and make it usable for decision-makers. This means aggregating and correlating data from across the enterprise, including data found in ERP systems, IT infrastructure tools, DevOps automation, e-commerce platforms, and more. In addition, it means going beyond the enterprise and gathering intelligence from partners, social channels, and the public domain.
To effectively harness data from this diverse assortment of sources, teams need to establish a data model that captures the relationships across value streams. This requires cross-functional teams to collaborate on defining these value streams and their relevant data, starting with OKRs. With a unified data model, teams can analyze relevant data from their domain, but within the context of strategic business initiatives.
Leverage hard data rather than subjective, manual reporting
As workflows, services, and products become increasingly digitized, the volume of data available continues to expand rapidly. Leaders should focus on harnessing this data rather than continuing to rely on the "roll-up" status reporting and workflows that tended to characterize traditional management approaches.
Establish business-centric KPIs
Traditional IT outputs were internally focused. For example, a server team would work on improving metrics for a specific type of server, focusing on aspects like uptime, CPU utilization, and so on. Through BizOps, teams must begin to correlate IT metrics with business outcomes, such as customer satisfaction, shopping cart abandonment rates, average revenue per user, and so on. In this effort, it can be helpful to start with the business’ top-level quarterly objectives and work back from those.
In establishing metrics, teams can look at business value across three key domains:
- Value creation: Teams can focus on how a new or improved service ultimately delivers incremental gains in business value. For example, a new service can open up opportunities for growth in existing customer accounts or potential market expansion.
- Risk mitigation: Teams can focus on how their investments and efforts are reducing business risk. This can include incorporating more robust security mechanisms that reduce exposure to breaches, and it can also relate to how the reduction of service downtime in an internal system can reduce the risk of teams missing critical deadlines.
- Resource optimization: Enhanced resource optimization can lead to improvements across a number of areas. This can include cost savings, but it can also pertain to efforts that result in more effective prioritization of limited resources, the ability to free up resources and assign them to higher priority efforts, and more.
By leveraging BizOps, organizations can gain enhanced business and IT alignment. More than ever, this alignment is key to ensuring investments and efforts are applied to achieve maximum business impact. Ultimately, this alignment is essential in enabling the larger organization to meet key digital transformation objectives. Further, through the real-time, data-driven insights that BizOps yields, leaders can share intelligence with other executives, better communicate value, and build trust and support.