Demand Shaping in the Digital Age

In the digital age, there are more ideas out there on how to use IT than companies can possibly implement. They must find ways to select the most strategic business change opportunities, while readjusting and reprioritizing project delivery efforts to optimize speed to market for the right initiatives.

To do this, IT leaders must engage the rest of the business in demand shaping: ongoing negotiation and learning about a company’s most valuable and achievable business change opportunities through which leaders develop a prioritized list of IT-enabled business capabilities. According to MIT CISR research, demand shaping conversations—which must involve IT and the rest of the business—can facilitate senior executive understanding of IT. This is important because we discovered that high levels of senior executive understanding are associated with significantly higher quality IT portfolios, and ultimately with industry-adjusted net profitability.

Interestingly, demand shaping tools have been around for a long time. Most organizations have some combination of business relationship management, roadmapping, agile methods, strategic program management, operating cost transparency, and post-implementation value assessment in place today. What’s different now is how we’re using them to change IT conversations.

For example, business relationship managers traditionally focus on the question: “What projects do you want?” However, these individuals usually have formal responsibility to both an IT leader and a business leader, understand the customer’s business processes and goals, and can provide technology guidance to ensure maximum return on IT investment. They can change the conversation by asking, “What capabilities does our enterprise need to meet customers’ desires?”

Post-implementation value assessments can also facilitate new conversations. These audits typically measure application usage or adoption, customer satisfaction, and resulting business impacts—both costs and benefits. So instead of asking why a project was late or over budget, companies can use post-implementation value assessments to learn whether the project achieved its business case and how the company can generate more value from the system moving forward.

To see more examples of how the conversation is changed with these tools, read the October 2014 MIT CISR research briefing, “Demand Shaping: Changing the Conversation About IT,” with free registration on the MIT CISR website (access limited to members of MIT CISR sponsor organizations until January 14, 2015).

Who is involved in demand shaping conversations at your organization? How are you using these tools to facilitate IT understanding?

Barbara Wixom is a principal research scientist at the MIT Center for Information Systems Research (CISR).