“Few customers buy our products, and those who do often return them angrily.” This quote from Scott Adams in The Dilbert Principle may sound cynical, but it’s sharp and smart — and it’s something Gartner agrees with. One of the significant challenges in IT management is that many managers lack sufficient knowledge about the business, its needs, and processes. All over the world, IT managers work with people who choose IT just to criticize it.
So, give yourself a chance. Aim to know your “customers” better than they know themselves — even if that sounds like a tall order.
How to Know Your Customers Better
To get to know your customers (and your business) better, focus on understanding the following:
- Business Model: Understand the organization’s business model, including its customers, markets, and financial history.
- Key Business Processes: Identify the critical business processes, especially those that rely on technology or will do so in the future.
- Key Personnel: Know the background, skills, and qualifications of key business personnel.
- Organizational Structure: Familiarize yourself with the organizational structure and the underlying logic behind it.
- Technology in Use: Recognize the technologies employed by the business, particularly in production and support units, and identify any technology infrastructure outside the IT domain.
You might have come across some of this information during your job interview. Beyond that, a cautious person would also review the organization’s non-confidential files. As Peter Hind suggests in his article “Finding the Right Job,” you should also seek insights from the previous manager about the business, its organization, technology, processes, and people.
Pitfalls of Not Knowing the Business
If you don’t understand your business well, you might encounter some or all of the following issues:
- Serious Judgment Errors:
- Endorsing or supporting wrong investments in information technology.
- Failing to allocate the right people and resources to support the appropriate business units.
- Investing beyond the financial or cultural capacity of the organization.
2. Misunderstanding Organizational Hierarchies: This can lead to overreacting to the needs of some individuals while ignoring the input of key personnel.
3. Misreading the Organizational Structure: You might make promises you can’t keep, a common trap for newcomers.
Understanding the business offers clear benefits, including avoiding the above pitfalls. Here are some of the advantages:
- Informed Investment Decisions: Knowing the products and markets allows you to assess IT investment opportunities effectively. You can determine whether the organization’s budget is invested in high-return areas or if it’s being misallocated.
- Avoiding Waste: Understanding and preferably documenting business processes can help you prevent investments in unproductive processes.
- Cultural Awareness: Familiarity with the organization’s structure and culture helps you understand the cultural behaviors, risk appetite, and the nature of both formal and informal management paths. This knowledge allows you to identify sub-organizations and business units you might not have been aware of.
- Technological Insight: Knowing the types of technologies in use and who’s responsible for them lets you recognize potential systems and infrastructure outside of IT’s control. In some engineering-based organizations, there might be units that resemble central IT but operate as rivals.
Without a deep understanding of the business, delivering effective services is almost impossible. Unfortunately, many IT managers don’t take concrete steps to understand these critical aspects of the business. They expect to continue their work based on intuition and hope to remain in their roles, but IT managers must thoroughly understand the entire business.
From the moment you apply for the IT management position, you should focus on increasing your knowledge of the business and IT’s role within it. If you’re new to the organization, this work should begin before you step into the role. One way to do this is by reviewing the organization’s information, such as annual reports, brochures, non-confidential files, and other records available through the company registrar.
Another valuable resource is former employees and suppliers. Ask them about the organization you’re joining. You’ll gain a lot of information, but remember, not all of it will match what’s in official publications.
If an IT manager is promoted from within the organization, it’s expected that they know all the relevant business information. Unfortunately, many IT units operate separately from the rest of the organization, with an inward-focused culture that goes against sound management practices. So, it’s a mistake to assume that years of working in an organization mean you know it well.
Corporate Entity
Investigate your organization’s business as thoroughly as possible and document your findings. After this research, you should be able to confidently answer the following questions:
- How many employees are in each department? Has this number changed significantly over the past five years?
- What products and services does the organization offer?
- Which products or services are the most profitable? Have there been changes in their profitability?
- What is the organization’s overall vision, mission, values, and goals?
Business Processes
The best way to understand your organization’s business is by documenting its business processes. Your employees can do this for you and deliver the results. This exercise will give you valuable insights into the quality and accuracy of the work being done and how well technology is being applied. It will also help you identify short-term projects with high profitability potential.
Make sure you can confidently answer the following questions:
- What are the organization’s key business processes?
- What triggers and halts these processes?
- What are the key steps in each process?
- What skills and qualifications are required to carry out each process?
- Which department is responsible for each process?
As an IT manager, you should insist that these processes are documented in detail so that you can use this information when needed. Your team should also be familiar with these processes, as they are key to understanding the business and ensuring the correct deployment of IT resources. These processes are also a useful source for identifying profitable investment opportunities and ensuring the long-term success of the business.
Organizational Structure
Understanding the organizational structure involves more than just looking at an organizational chart. While charts can provide a formal view of the structure, they can be outdated and might not reflect the true dynamics within the organization. They may also omit key players like consultants, temporary employees, and affiliates. It’s crucial to understand who holds real power and responsibility within the organization.
To grasp the organizational structure more effectively, ask yourself these questions:
- Are consultants and temporary employees integrated into the organizational chart?
- Which employees are members of the executive committee?
- What is the level of expertise among key employees?
- Who has significant authority, and how involved are they in decision-making?
- What is the turnover rate among employees, and how does it compare to industry standards?
- What is the organization’s culture, especially regarding IT?
- Which key employees have IT knowledge?
Organizational Culture
Organizational culture greatly influences how business is conducted and can vary widely. Here are some cultural aspects to consider:
- Entrepreneurial vs. Conservative: Does the organization encourage risk-taking and innovation, or is it more focused on risk aversion?
- Informal vs. Formal: Are processes flexible and open, or are they rigid and rule-bound?
- Decisive vs. Reflective: Does the organization prioritize quick decision-making, or does it value careful analysis?
- Result-oriented vs. Process-oriented: Is the focus on achieving targets, or is there more emphasis on following established processes?
Understanding these cultural dimensions will help you navigate the organization more effectively and align your IT strategies with the broader business culture.
Key Personalities
During your research into the organization’s history, you’ll likely come across key personalities. Here are some details you should know about them:
- Key Individuals Outside IT: Identify key people you’ll be working with outside the IT department. Understand their personalities, interests, past IT experiences, and their preferred and disliked projects.
- Ask Questions Early: Don’t wait to gain this knowledge through experience — it can be costly. It’s better to ask the right questions from the start.
Getting to know these important individuals is crucial. Don’t rely solely on others’ opinions; gather the necessary information yourself.
Detailed Checklist
Here’s a comprehensive checklist to ensure you have all the necessary information:
- Business Knowledge:
- Understand the business environment, available budgets, existing business plans, customers, and markets.
2. Customer Segments:
- Identify the different types of customers and their socio-economic backgrounds, key products and services, and essential customer interactions. Understand current markets and potential future markets.
3. Key Business Processes:
- Gain insight into processes like management, product development, marketing, production, financial operations, support, archiving, records management, procurement, contract management, and IT operations.
4. Organizational Structure:
- Familiarize yourself with both official and unofficial organizational charts, key personnel, and the organization’s culture.
By focusing on these areas, you’ll equip yourself with the knowledge necessary to manage IT effectively within your organization. Knowing the business inside and out isn’t just helpful — it’s essential for your success as an IT manager.