My connections with CIOs of all type of organizations have one thing in common- their battle with articulating the active strategic capabilities driven اختبار قدرات تجريبي by it. The discourse around IT remains restricted to in business aspects (like efficiency) and does not adequately talk about the strategic aspects (business capabilities). Though many without effort feel and say It is strategic but they battle to clearly define what the strategic aspect is?
The impact of It can be felt at the quality of a process or a small grouping of processes or at the organizational levels. This impact can be in business as in terms of making them extremely effective (e. grams. cost saving or faster turnaround). The impact can also be felt in terms of strategic terms by supporting or creating business capabilities to compete.
I know believe, this articulation is really important if It has to provide better value and CIOs desire to play a more impressive role. Through this article, I would like to define what a capability is and how CIO can articulate the issue with full confidence.
What is a Capability?
In bookish terms, capability is understood to be the ability or capacity of an organization to name, create, integrate, and leverage organizational resources towards meeting organizational objectives.
In practical terms, capability is a cohesive mix of people (knowledge, skills, attitude, motivation), processes (the sequence of related activities, tangible or intangible), organizational know how (the technology, SOPs, experience) and resources (physical, financial, human and social). It’s unique to an organization i. e. it cannot be easily imitated by the competitors and it provides unique value to the customers. If competitors can do it or customers have no need for it, it cannot be mentioned as a capability.
Capabilities are information-based, tangible or intangible processes that are firm specific and are developed over time through complex connections among the business’s resources. They can abstractly be regarded as ‘intermediate goods’ generated by the firm to provide enhanced productivity of its resources, as well as strategic flexibility and protection for its final service or product. Capabilities use developing, carrying, and changing information through the business’s human capital. Capabilities can also be mentioned as ‘invisible assets. ha
It is often not easy to understand, define and explain a capability as it exists underneath an organizational working. It is not easy to verbalize what capabilities a corporation possesses, but it may be a good exercise to try to do so.
Understanding business capabilities would require one to look deep into the organizational ways of working and what is unique about the organization from a competitive perspective. Some of the organizational ways of working become natural to the participants so because of this would require appropriate level of insights to see them.
Business capabilities have the following three characteristics:
- They are complex configurations of men and women, process, practices, purpose and it
- They are when compared with what the competitors can do (or can not do) and
- They always are directed at meeting clients’ needs (directly or indirectly)
Capabilities can have a home in functions, sectors or specific areas of a business or they may be at the overall organizational level.
A few examples of capability occasionally includes the following-
- Capacity to create organization change in respond to the external changes
- Capacity to build new businesses/ handle merging and acquisitions
- Capacity to expand the market through effective and efficient funnel development
- Capacity to contain cost and then compete on price
- Capacity to identify, bridegroom and create business leaders
- Capacity to assemble teams per the project demands
How It can create capability?
Two broad ways in which It can benefit create capabilities.
One, it can accelerate the ability creation process for those capabilities, how the organization is trying to build. Example- a corporation was struggling to create an effective supply archipelago solution. Their majority of business moves through 80+ distributors and enabling them would certainly help them do more so because of this the company to grow. IT provided the solution by extending their company ERP to the suppliers, who now can manage their businesses better in terms of inventory, ordering, financial getting back together and payments. The IT drive (which experienced the typical initial resistance) helped them focus more on the business to drive business growth. In this example, the IT abilities were suitably leveraged to create the capabilities business wanted. A completely integrated supply archipelago, much ahead of other competitors provides company the ability to manage costs, charge reasonably limited as well as enhance their market share.
Two, it can get to be the inventor of new capabilities. In this type, the business is not consciously working towards creating the ability but it acts as the prompt. Example- a news agency was working with legacy IT structure to disseminate news to its subscribers. With the need to upgrade the IT structure coming from the ability of the agency to service its customers, the new CIO transformed the IT structure from legacy to IP based. The speed and accuracy, which are the required objectives, were met by the new IT structure. However, the new IT structure created more than that. It broke the organizational silos between multiple agent (who gathers the news) and editorial (who edits and feed to the customer) teams, thus bringing a culture of collaboration. Likely the need was latent, but no one knew how to address it. The new capabilities of the IT structure helped the business create a new organizational capability, that of increased collaboration between the teams and the ability to create objective news. This helped the business create newer services and products for their customers, without investing a large amount so because of this making productive use of their existing resources.