David Olivencia
Within the past few years a revolution has been taking place in the corporate technology landscape. The rise of social, mobile, analytics and cloud (SMAC) has provided exciting new opportunities for companies to innovate and become more competitive.
It has also disrupted many traditional IT shops that have been slow to embrace these changes.
Business functions across the enterprise, especially marketing departments, are demanding more from IT than just maintaining computers and keeping the lights on. They’re demanding the innovative new technology that has emerged in the last decade to help them become more nimble than their competitors.
How can IT executives meet these needs?
Let’s take a look at how the IT department’s role has shifted, and what areas you should focus on to enable your company to become a nimble, competitive, technology-enabled player in your industry.
The following are three critical areas I believe technology leaders should look at.
1. Leverage the “Service Oriented” Approach
IT departments traditionally focused on buying hardware and software products, and leveraged on-site consulting services to implement and manage business process improvement. IT managers tried to accurately estimate the demand to meet peak workload, but typically found inefficient hardware asset utilization.
Now there is a shift to looking at these business functions as services which are purchased in the cloud and are paid by how much is utilized. This service-oriented approach increases efficiency, lowers costs and increases flexibility.
Cloud hosting services, whether in the private or public cloud, have become the hottest item for IT departments, providing a welcome switch from the capital goods purchasing model to an efficient pay-as-you-go subscription model.
And instead of paying lump sum pricing for on-premise enterprise applications, software is also moving to a subscription as-a-service model.
This collection of services should become a growing part of your “IT portfolio.”
Additionally, through advances in technology your IT portfolio can now be global (hardware and hardware maintenance can be located anywhere in order to leverage the cost-advantages of specific geographic locations). IT service providers from all over the world can become part of your virtual team, providing services for your company 24 hours a day.
The sun may literally never set on your IT department.
The winning IT organizations of the future are the ones that can successfully integrate external services instead of collecting hardware and software. They will focus on how these services drive measurable business results and competitive advantage for their organizations.
2. Leverage IT As Your Company’s New Competitive Weapon
In the CIO.com article The CIO’s Top Priorities for 2015, the top recommendation was that “The CIO role will transform from a technology leader to a business leader.”
Historically, the CIO was rarely, if ever, invited to a board of directors’ meeting. But with increasing cyber-security concerns, the disruptive impact of new technology developments on strategy, and how technology has leveled the playing field between competitors, the board is increasingly requesting the CIO’s valued input. CIOs are becoming a more integral part of the senior executive team.
Consequently your IT department should transform into a proactive, entrepreneurial component of your business. You can now help your firm shape strategy with the smart use of new technologies in order to become more competitive, and possibly even disrupt your industry.
Consider Amazon. Founded in 1994, it’s now one the top US retailers, largely through the strategic use of technology.
At its core, Amazon is a retailer. But consider how the business is run: it leverages state-of-the-art e-commerce technology, recommendation systems, dynamic pricing mechanisms, and big data processing. It has leveraged technology to disrupt the retail industry.
3. CIOs: Leverage Your Communication Skills
Along with the IT department becoming a strategic player in the business, CIO’s role must change in another crucial way: they must become a communicator.
Hewlett Packard CIO Ramón Baez talks about the changing role of the CIO and how his new job is to communicate the value of IT to the business. It’s no longer just moving from project to project, it’s about how to drive business outcomes and the impact the department will have on the business.
And that really summarizes the role of the CIO in business today. A vital component of their job is communication. They need to communicate technical realities and possibilities to the business leadership team, and infuse business acumen and a culture of driving business results into the technical team.
What the Future Holds
The changes in the last decade have been breathtaking. Companies such as Netflix, AirBNB and Uber have risen from tiny startups to major players in a few short years. At the same time, MIT Technology Review noted that technology is wiping out older companies faster than ever.
And there are more changes on the way. Will your company survive – and thrive – over the next few decades, or will you be caught like a deer in the headlights?
To thrive, your IT department must leverage a services oriented approach, drive competitive advantage, and leverage communications leadership to drive measurable business results.
