If you are a Chief Information Officer or a similar upper management executive in the IT organization, you know that a massive tidal shift is currently underway. For the past few years, we have felt the current pulling, but now that Digital Business Transformation and growth through technological innovation is on every CEOs mindest, the time has come to implement the changes rather than wait and see! Today, we want to take a closer look at how this change has impacted IT as a department and the role of the CIO in particular.
Not so long ago, the Information Technology department was looked at as a necessary evil that one could put up with as long as it didn’t cause any trouble. In many ways, IT was considered to be something that companies had ‘to spend money on’ rather than invest in. It was run as cost-effectively as possible and everyone was happy if it kept the business operation running smoothly (that is where the expression “Keeping the lights on” comes from) without causing major disruptions.
Until very recently, innovation wasn’t in the forefront of a company’s requirements for IT. Therefore, change was driven by efficiency and cost-reduction goals, and quite frankly it is understandable. The team had to deal with massive dinosaur legacy apps whose roots ran deep through the heart of the organization: its finance system, its supply chain or enterprise resource planning system, or its customer relationship management. Ripping them out to modernize these meant huge potential risks, costs, and resources. So most companies chose to drag these along as long as possible, patching and fixing as they went.
However, the operating conditions have changed. Innovative companies — utilizing the Cloud, mobile technologies, Big Data, and Internet of Things like never before — are disrupting well-established players in already penetrated markets by providing ingenious new customer experiences or creating new market opportunities by inventing new go-to-market methods. One thing these innovators have in common is that they are agile. They are nimble on their feet and assimilate any trends or changes in the market faster and better than their competition. And they use technology as their vehicle to deliver these cutting-edge experiences.
With these new technologies come faster upgrade cycles which require you to manage your entire estate in a more agile, Evergreen state. But they also are more non-tech oriented — for example, the public cloud hides most of the technology in a neat, contained box. While there are downsides to being more end user friendly, e.g., more dispersed apps (application sprawl) and IT management (Shadow IT), there are also tremendous benefits.
While IT was only accessible to technology-savvy personnel until now, more and more upper management in IT is hired from a management background to fulfill IT’s new mandate: support the business and enable them to drive the Digital Business Innovation.
For most established enterprises, this change is easier said than done as many CIOs are still stuck in the “Keeping the lights on” mode. Chief Information Officers used to be highly technical people who managed their IT departments like a silo — IT was expected to run by itself and help out other departments as needed.
However, those companies will fall farther and farther behind as newer, more agile companies take advantage of disruptive technology. Or in the words of Peter Sondergaard, Gartner Research SVP,:
“Those who pursue innovation will weather the storm and come out ahead.”
To allow his or her company to forge ahead and avoid being left behind by the more fierce and innovative competition, the CIO needs to become a trusted business advisor to the company — providing not only opportunities for further cost reductions or technical solutions to business problems, but to advise the board on ways to leverage new technology to create new products, new methodologies, and faster turnarounds to push their company forward.
Therefore, the role of IT must change from simply “Keeping the lights on” to being the central service provider and facilitator that enables innovation and disruptions. Of course, along with that, the role and responsibilities of the CIO and the expectation of the organization towards the person filling this role must adapt as well.
One of the best examples for this is cyber security, which is one of the top priorities of business leaders worldwide. This is not only because a data breach costs an enterprise on average $3.62 million but also because it damages customer trust. Now, if a CIO can create an IT architecture that not only detects but also proactively prevents any suspicious and potentially malicious activities, the CEO could leverage this to gain additional customer loyalty.
Another example is IT automation. By implementing smart workflow-based solutions that enable you to eliminate 75% of your IT help desk tickets, improve your employees’ overall productivity by proactively increasing their device’s health score, or even streamline your application packaging and testing, you can eliminate resource-hungry manual tasks and streamline lengthy, bottle-neck prone business processes. This will allow you and your team to focus on newer innovations and projects that will propel the company ahead of competitors.