Analytical decision-making is an approach where a leader or manager only makes important business decisions with solid data or information in hand. This style contrasts with more intuitive leadership styles where managers make many decisions using intuition or opinion. Is it possible to amalgamate both styles and make all decisions based on concrete information?
2 Types of decisions around your IT Department
IT Decisions – All technical decisions are usually about IT management such as, the choice of technology standards, IT operations, technical expertise the organization will need and the process of implementing new systems. IT Staff is responsible for IT Management decision including asset life cycles, infrastructure upgrades provide support for corporate teams.
IT Impact on Business Decisions: Decisions about IT impact on business is usually not left with IT department. The choices that determine the IT impact on a company’s business, is usually part of business leadership role. A recent research at Harvard Business Review shows that the companies that manage their IT investments most successfully generate returns that are as much as 40% higher than those of their competitors. While a number of factors distinguish these top-performing companies, the most important is that senior business executives take a leadership role in a handful of key IT decisions. By contrast, when senior leaders abdicate responsibility for those decisions to IT executives, disaster often ensues
3 Common approaches to an IT Department & Decision process
CFO/Controller Approach: IT, like finance, is ultimately a corporate service provider. IT functions are typically big spenders and to keep IT spending under control, traditionally, it made sense to keep IT under finance department. However, understanding impact of IT in soft cost (Revenue, Payroll, Profit Margin) during decision making process is usually not the focus of finance department and it’s ignored. And various research, on top performing companies show that this is common factor in low performing organizations.
“Finance executives are generally not hired to be thought leaders in the innovation and product-development areas. By placing the IT department under finance, the message is loud and clear: Technology is purely an operational concern, and the main focus of technology is cost cutting” -- Ruth McCambridge
Outsource (Service Provider): Outsourcing IT practice has been moved from a niche technology management tool to a mainstream and a strategic weapon for many firms. Due to the ever-growing gap between supply and demand of technical talent, the business leaders are attracted to the vast pool of technical labor available outside of their organization. However, leaving business and technical decision to service provider without senior leadership involvement in technology strategy decision: impact of IT and communication issues are two biggest potential drawbacks.
IT Department in house (Non-executives): Having an in-house IT team is an attractive option because they perceive more dedicated attention and faster results. However, decisions around business strategy, IT impact on business, approval process and an agreement/dis-agreement of other staffs could be very time-consuming activities. A weakness of this decision-making process is that it generally increases the amount of time it takes to make decisions and decision-makers struggle with deadlines and a sense of urgency with decisions.
Balanced Approach: Business leaders today need to deal with both IT decisions (Analytical) and also impact of IT on business decisions (leadership) ie. Strategy, process. Modern technology innovations and advancements allow businesses to form all analytical and business strategy decision based on facts and data to minimize your potential for a wrong decision. It enables business leaders to look to hard evidence in analyzing target markets and business strategies as opposed to making assumptions or guesses on what works.
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