The Secret to Becoming a Top-Notch CIO: Using the Organizational Value Chain to Redefine the Bottom Line
When 20th Century Nobel Laureate Ilya Prigogine said “The future is uncertain” he must have been talking about 2020 and our global status quo.
In fact, to say times are uncertain would be to put it mildly. Natural disasters, depleting natural resources, wildlife crises, and killer viruses are just a few among a growing list of world issues reaching epidemic proportions. To help characterise and define these times, theorists and strategists have begun to amalgamate military terminology and call this a VUCA World (volatility, uncertainty, complexity, and ambiguity).
For many businesses these times can feel like certain death. Competition is high, opportunities are fewer, and the bottom line is always at risk. The only silver lining is technology and its growing list of products and services that can provide the right amount of tools to help you stay ahead of the game. This is where the onus of redefining a business falls into the hands of CXO/CIOs. Being at the helm of your firm’s change-agent department means this challenge is exactly up your street.
A Strategic CIO Dashboard
To be able to drive change however, you need the time to sit back and look at the picture from a macro level. Many tools and processes available for enterprise data and analytics are packed with the micro details that don’t offer a big picture and the insight that comes with it.
Using our 5-step system, we’ve made it easy to create a Strategic CIO Dashboard, which can be developed as a simple series of Excel sheets or as a customized product. The dashboard will be a breath of fresh air to your CIO analytics, enabling you to see your organization’s processes and data from an entirely different perspective, which in turn will help you to use technology to improve your organization’s performance.
Let’s get started.
5 Steps to Develop a Strategic CIO Dashboard
- Draw Your Organization’s Value Chain
We suggest a variation of Porter’s famous value chain to fit into the specifics of your organizational activities. This helps you to understand where various levels of value come from, be it the bottom line or the number of satisfied customers.
- Map the Processes of all Departments in the Value Chain
Determine the activities and sub-activities related to day-to-day operations of your business and processes in each department of your organization. This will enable you to understand where the time and money are being spent from both micro and macro levels.
- Mark the Contribution of Each Process to the Organization’s Value
Once you map out the activities of each process, you can then discover the contribution of these activities, as a percentage of the value generated to the organization’s revenue.
- Identify which of the Seven Wastes currently occur in the processes
Calculating the expected vs. actual effort put into each activity is essential to understanding where you are wasting resources. To do this, we recommend identifying the wastes based on the Seven Wastes (or “muda” in Japanese) developed by Toyota’s Chief Engineer Taiichi Ohno. The 7 wastes are Overproduction, Waiting, Transporting, Inappropriate Processing, Unnecessary Inventory, Unnecessary or Excess Motion, and Defects. A recent 8th waste was added to this list: Underutilization of Employees.
- Place your IT solutions & Existing Solutions on the Map
Once you have identified the wastes, it becomes your IT department’s turn to get down to work, identifying existing It systems and creating necessary new IT solutions to overcome each problem and enhance value within the organization, including the development of software, automations, dashboards, reports, etc. Here it’s important to define what processes must remain entirely manual and where IT systems can be integrated.
Another key to the successful application of IT is knowing what does not need fixing just because an IT alternative may exist. The better way to go about this would be to identify areas with simultaneous high value and high waste. Depending on your industry and which area of high value + high wastage you want to reduce, a range of technology solutions is available to you, such as:
- Robotic Process Automation (RPA)
- Systems integration
- Development or implementation of new systems
- Interface internal systems to vendors, customers, and partners
- Mobile solutions to increase connectivity within the business
- IoT to wirelessly connect everything else
Here’s what your final dashboard might look like, with block sizes representing the contribution of each activity to your organization and colour-coded with a red, amber, or green (RAG) status showing areas where waste can be reduced.
Bonus: Balanced Scorecard
Once you’re done creating your CIO Dashboard using these five steps, you’ll discover a bonus aspect to the analytics: it can generate a Balanced Scorecard view which can be presented to your CEO. Developed in 1990 by Robert Kaplan from the Harvard Business School and David Norton, the founder of an IT consulting firm, the Balanced Scorecard ensures that one area of your business doesn’t suffer as a result of changes made to improve another.
Combining business processes and metrics with IT tools is the key to being a great CIO. Here at Pyxle, we believe in combining the right elements to achieve optimal fit-for-purpose for your business, which is exactly what the 5-Step System does. If you need help to strategize and develop this dashboard so that it’s tailored to your organizational needs, drop us a line.
When Prigogine talked about the uncertainty of the future, his quote didn’t end there. He continued to tell us, “But this uncertainty is at the very heart of human creativity.” It is at the worst of times that the best of ideas come to life. Under pressure and in volatile circumstances, innovation finds a home inside the ideas of this generation’s change-agents: technologists and CIOs.
Using this Strategic CIO Dashboard, you can drive innovation, reduce waste, and create value in your organization more effectively. We wish you the very best in your digital transformation journey.