Who is a COO in IT

Who is a COO in IT

Sooner or later, every CEO decides to get out of the operating system and focus on strategy. Who will replace him? This is usually the COO.

In IT, the story is the same. In general. But there are specifics imposed by the industry. This applies to solved tasks, and powers, and knowledge.

What kind of beast is this, COO in IT, I invite you to read!


Greeting! My name is Ilya Pracht, I am an experienced manager in IT, and also a manager of the COO course at OTUS. I have been a COO myself, mentored COOs, helped business owners find the right COOs for themselves. And it must be said, the industry imposes its own specificity on this role. Especially in consulting and outsourcing.

And to understand who is a COO in IT, I decided to write this article. Chased!

The role of the COO

Who is COO (Chief Operating Officer)? Simply put, a person who is responsible for the entire operating system in a company. That is, not for strategy, not for development, but for the functioning of what is, in the most effective way.

And what is an operating company? Depends on the company, but in any case, it’s a big part of it. So, the COO is responsible for most of what happens in the company. This is most often the second person, after the CEO.

Well, the appearance of a COO in the company is most often a step caused by the CEO’s desire to break away from the operating system and focus on the company’s development.

The area of ​​responsibility of the COO can be well defined where production is separated from sales by a rigid fence. For example, some factory. Or a product IT company that is closer to us. There, production is a mechanism that receives resources as an input and produces products as an output. And how will all this be sold, what are the requirements for the product, etc. he doesn’t care, it’s just input to him.

It doesn’t work that way in consulting or service business. Every product there is a project and it is unique. And the boundaries of the COO’s responsibility begin to blur almost to the size of the entire company. Here you will find sales, marketing, HR, and back office. Everything affects operational results. The COO must ensure financial efficiency, achieve acceptable EBITDA (revenues minus costs of production and operating system, excluding depreciation). And in outsourcing or consulting, EBITDA will be affected by almost every department.

Types of COOs

There are 2 types of COOs.

The first – it’s straight leaders, with a huge set of powers to which the entire company is subject, except for the CEO and perhaps a few more departments. This position is called Executive Director. He is responsible for everything and controls everything. Except, again, strategy. The COO receives clear instructions on what to do, and then does it, and has everything for it.

Others – It is rather coordinators. A true COO, in the Western interpretation of this role, is our COO. Responsible for the efficiency of operational work, but in a matrix interpretation. They have no direct subordinates, or a couple of service units. They set goals and OKRs for all directors and influence results through this. They help implement changes, optimize processes and finances, but do not make any significant decisions on their own. Only recommend.

Both the first and second COO models are quite common. I can’t even say unequivocally which ones are more. But there is one pattern: the larger the company, the less authority the COO will have. After all, in developed companies, management is also strong. And here precisely more help is needed in coordination and interaction between managers than in their management. But in small companies, where most of the powers are in the hands of the CEO, the first type of full-fledged managers is more common.

Tasks of the COO

Basically, the COO has 4 main tasks:

  1. Coordinate the joint work of all departments

  2. To achieve operational efficiency

  3. Monitor performance and finances

  4. Resolve escalations and operational issues

Let’s dig a little deeper and analyze these tasks in more detail.

Coordination of joint work. The COO gets the company’s strategy and goals. And then his task is to achieve the fulfillment of these goals. Accordingly, the goals are decomposed into subdivisions, responsible persons are appointed. And then the COO coordinates and facilitates this process, monitors progress and makes adjustments to plans if necessary.

Operational efficiency. One of the most important blocks of the COO’s work is about processes. Definition of processes, construction, tuning of existing processes. All so that the operating room takes as little effort and resources as possible from the team, spends as little money as possible on itself.

Control of indicators and finances. COO works with data: metrics, KPIs, financial indicators. All this is collected together, displayed on special dashboards, highlighting problems or crises. The COO’s job is to see and react to problems long before they fully manifest in order to reduce any losses. Everything can be transferred to money here.

Resolution of problems and escalations. In any well-established system, edge cases occur – situations that were not foreseen or included in the main process. And when no one can solve the problem at their level, it escalates to the COO, and he gets involved himself. Usually, this is a question at the junction of areas of responsibility: between marketing and sales, between sales and production, between front office and back office.

Competencies of the COO

Based on everything that we have analyzed, you can make a certain list of competencies that a COO needs. Therefore, the COO must know and be able to:

  • Operational management – principles of organization building, value chain, building and optimizing processes, metrics and KPIs, etc

  • Implementation of changes and project management – The lion’s share of the COO’s work is changing something. And any big change should be properly implemented as a project

  • Automation and digital transformation – There is not always a direct special role of CDTO transformation director for large companies. But if there is none, this function will also fall on the COO

  • financial management – the ability to count money, build financial models, achieve the same acceptable level of EBITDA

  • Strategy – It would seem like a paradox, I wrote a little above that the COO is not responsible for the strategy. Everything does not answer that way. But he is responsible for its implementation. And for this, you need to at least be able to decompose goals, cascade strategies.

  • Communications – The COO talks a lot with everyone. Even the COO of the first type, a full-fledged manager, cannot build the entire company on one totalitarianism, he has to take into account the opinion of colleagues and negotiate. And the COO coordinator, and in general, only does what he looks for compromises with everyone. This is the way

From the point of view of basic skills and abilities, that’s it. Another most important competence will be understanding of the subject area. The field in which the company operates. Otherwise, it is difficult to understand what can be optimized or discarded, and without which the company simply cannot continue to exist.

COO in IT

The role of the COO in IT is not very different. Everything described above applies to her.

The main feature is a complex field. And that’s why the COO is usually made up of leaders from within IT. It is very difficult to break into this profession from somewhere outside.

The second aspect is resources. Almost everyone here is human. And where there are people and their interaction, there is a huge space for optimizing everything and everything. And the field is not plowed for COO work.

Well and The third nuance is a lot of automation. More than anywhere else. Virtually every step is subject to automation, so the COO must be well versed in this, again, have a good understanding of IT.

Here he is, the COO in IT. The role is complex, interesting, with great powers and opportunities, but also with great responsibility. Most often, COOs here become heads of project offices, CPOs, CTOs, or directors of departments that have many different and complex processes (for example, marketing or HR).

PS

I hope I managed to decipher what the role is – COO in IT. After all, we will prepare such COOs at ours new course COO to OTUS.

And in order to understand the issue even more deeply, we will conduct open class on August 14 on the same topic – “Who is the COO in IT”. Register and come!


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