IT's New Directions: Let Go of the Back Office

The role of IT in your company has been one of the most hot-button topics over the past year. We’ve spent some time discussing it here on this blog, but today I want to bring in a new perspective. An article by Galen Gruman from InfoWorld titled “The Straight Talk on IT’s New Directions” argues that all the new technology today means that executives cannot return to their pre-recession IT priorities. Even though everyone is all about cutting costs these days, and IT spend as a proportion of the budget is increasing, those who try to cut back on IT and don’t view it as a strategic tool will find themselves in trouble.


 

Let go of the back office 

“The simple truth is that the focus on the back office – IT’s traditional domain – is over. Companies are tired of paying for what they view as plumbing,” according to Gruman. In other words, you don’t need the kind of complex technology being offered today to make sure your back office and infrastructure are working – they should be working already, and you should have enough competence in-house to run it. If you don’t, then outsource it to India or Latin America.   

Of course, this is not to say that your infrastructure and back office functions are not important, but the fact is that they’re increasingly seen as base functions in the engine room. As Gruman says, the focus today is not on how the engine is built, but on what it can do to propel the ship forward. IT must be viewed much more creatively, and you need to look at the ways it can add a higher value component to your business. 

New ways to optimize 

Data analytics is first among those new components. Until recently, analytics have been focused inward – on how the company and its various outsourced or supply chain projects are running. But now execs are trying to leverage data analytics to understand their customer base, and this is where IT can make a big difference. As Gruman says, “The knowledge IT has accumulated in the past two decades dealing with data is essential to navigating the huge info pools, complex relationships, and high rate of change at the center of these problems.” Executives actually don’t understand much about how to optimize this area, in spite of all the hype about market trends and knowing what customers want. 

Another aspect of staying in touch with customers is social media – and IT can make a huge contribution here too. Late last year I spoke with several small startup companies in Latin America that were developing social media marketing applications and dashboards from which companies can simultaneously manage all their social media efforts – this kind of IT innovation is what’s needed, and many of those products are selling very well. 

So in short, let go of the back office, and move IT up to the front office.