Organisations that regard the IT department as a ‘service’ function may miss the opportunities technology can offer in driving real business value. This tangible value can take many forms – it can help businesses reduce costs, improve agility, foster innovation, open up new business opportunities and support growth and profitability.
In organisations where IT departments largely own, run and maintain in-house systems, business leaders may feel that treating IT as a service function is the best approach. In these situations, businesses often incorporate IT departments under a centralised ‘shared services’ division, alongside enterprise-wide service functions such as human resources, finance and accounting, administration support, legal and so on. This structure reinforces the perception that IT is a ‘service’ in the eyes of the organisation as a whole.
This approach stands in stark contrast to the reality of today’s rapidly changing world of enterprise IT. In this increasingly connected and globalised environment, factors such as the democratisation of technology, cloud computing, mobility, analytics, big data, cognitive computing and massive cost reductions in publicly available compute and storage are all redefining the intrinsic IT value proposition for businesses.
Maximise business value or minimise IT cost?
In many instances, there’s a compelling business case for transforming IT from a reactive service centre that responds to everyday demands into a high-value, proactive and strategic enabler for the entire organisation.
Enterprises with traditional expectations of IT often develop business strategies first and then expect IT to respond and adapt. In these situations, it’s very easy for the business to miss the potential for technology to drive business value. This is especially relevant for industries disrupted by technology-induced change. Just ask Polaroid or Kodak.
Put another way, if you constrain the bulk of your current IT department’s primary efforts (and cost) to ‘keeping the lights on’, you may struggle to add business value.
Conversely, if the majority of your IT department’s resources and activities are associated with creating and protecting business value, then you should expect IT to actively contribute to the evolution of your business strategies and plans at every stage.
This shifts the mandate for IT to becoming a challenger and shaper of business strategies and plans, rather than just a recipient of instructions. You can achieve this shift by:
- Involving your CIO at the earliest stages in the development of your business strategies.
- Inviting the CIO to stress-test business strategies, plans and tactics by assessing whether technology has the potential to influence outcomes.
- Incubating technology-led business innovation by using rapidly configurable cloud technologies according to lean startup principles.
Integration is still a central focus for IT
One of the ongoing challenges IT functions face is the integration of disparate technologies and systems. How does the advent of new, readily accessible technologies such as cloud, mobility and big data, for example, affect this integration effort?
The reality is that the IT function has always been brokering and integrating a range of technology services for and on behalf of the business – it’s just that, historically, much of this was done on internally owned and managed technologies.
With the advent of cloud and other ‘on demand’ consumption-based IT services, the need for integration does not disappear – it may just be masked. In some instances, the cost, effort and complexity of architecting and managing the integration of a range of cloud, hosted and internally managed technologies can be substantial.
Enabling integration at the business level
Backed by a company-wide perspective on where, when and how technology could be optimally used to drive business value, the CIO should be a true peer to the business and, as such, freely engage with all executives and important stakeholders. This is unlikely to occur if the business constrains the CIO and IT function to operate within a separate organisational silo, separate from the rest of the organisation.
While integration may occur at the technology level, organisations can only derive real business value when effective integration also occurs at the business level – and in a carefully coordinated manner. It is precisely for this reason that organisations should not downplay the importance of the CIO’s role.
Only when an enterprise recognises the chief information officer as the chief integration officer – for both the technology and business layers – can it exploit and realise the full upside potential of its IT capabilities.